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Saturday, August 2, 2014

Cheque bounce - Stop payment - civil disputes - No offence in the absence of proof of hand loan - Hand loan - No calculations for arriving for total sum for which the cheque was issued - Non- enquiry about the sufficient funds in the account of accused - complainant is a worker - accused is a employee - suppression of actual deal - Trial court dismissed the case - High court reversed it - Apex court held that when the actual saving of complainant for annum is of Rs.10,000/- only and when is a worker under the complainant , it not believable that he gave hand loan about 4 years back to the employer by borrowing amount from Bank - in absence of rebuttal in cross examination of DW 2 mediator - clearly shows the cheque was stopped due to civil disputes = CRIMINAL APPEAL NO. 1522 OF 2014 ARISING OUT OF SPECIAL LEAVE PETITION (CRL.) NO. 278 OF 2013 RAMDAS S/O KHELUNAIK … APPELLANT VERSUS KRISHNANAND S/O VISHNU NAIK … RESPONDENT = 2014 July. Part – http://judis.nic.in/supremecourt/filename=41784

Cheque bounce - Stop payment - civil disputes - No offence in the absence of proof of hand loan -  Hand loan - No calculations for arriving for total sum for which the cheque was issued - Non- enquiry about the sufficient funds in the account of accused - complainant is a worker - accused is a employee - suppression of actual deal - Trial court dismissed the case - High court reversed it - Apex court held that when the actual saving of complainant for annum is of Rs.10,000/- only and when is a worker under the complainant , it not believable that he gave hand loan about 4 years back to the employer by borrowing amount from Bank - in absence of rebuttal in cross examination  of DW 2  mediator - clearly shows the cheque was stopped due to civil disputes =

whereby the High
Court set aside the Judgment and Order of the J.M.F.C. (II-Court),
Karwar acquitting the appellant herein of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881 (for short
‘the Act’). =


The case of the complainant
was that he had given a hand loan of Rs.1,50,000/- to the accused-
appellant and three and half years thereafter he had again given
Rs.25,000/- as hand loan, thus in all, the accused-appellant owed him
Rs. 1,75,000/- and to discharge this liability the cheque for
Rs.5,00,000/- was drawn, but the same stood dishonoured at the
instructions of the accused-appellant. =

Cheque for Rs.5,00,000/- issued by the appellant in favour of the
respondent was dishonoured by the Bank when it was presented for
realization by the respondent, as the appellant had instructed the
Bank to stop the payment. 
After receiving such information from the
Bank, the respondent served a legal notice calling upon the appellant
to pay the Cheque amount. 
Upon failure of the respondent to obey
the legal notice warranting him to pay the Cheque amount of
Rs.5,00,000/-, the respondent filed Complaint Case against the
appellant for the offence punishable under Section 138 of the Act=

Whereas, the case of the
appellant before the Trial Court was that he had entered into an
agreement with the complainant to purchase 3 acres of land
belonging to the complainant for a total consideration of
Rs.10,00,000/- and for that purpose, an advance of Rs.30,000/- in
cash was paid and the Cheque in question for Rs.5,00,000/- was
handed over to the complainant in presence of B.S. Pai (DW 2).
When the complainant failed to execute the sale agreement and not
even willing to return the advance amount of Rs.30,000/- and the
Cheque of Rs.5,00,000/-, he had to instruct the Bank to stop payment
against the said Cheque. =
Apex court held that

We find from the record that 
admittedly, the accused appellant
deals with sale and purchase of landed properties and 
the
respondent-complainant works as a Lorry Driver under him with a
salary of Rs.2,500/- p.m. and Rs.20/- per day towards miscellaneous
expenses (bhatta).
Admittedly, the Cheque in question was for
Rs.5,00,000/- and all the way the stand of the complainant was that
he had given a hand loan of Rs.1,75,000/- to the accused-appellant.
We find no material on record in support of the claim of the
complainant giving hand loan to the accused-appellant
There was
also no calculation of account or stipulation of any interest on the
alleged loan amount to show as to how the amount of Rs.5,00,000/-
was figured, in return of a hand loan of Rs.1,75,000/-, if at all taken by
the appellant from the complainant.  
It is also not on record whether
there was sufficient balance amount or not in the bank account of the
accused when the Cheque was dishonoured by the Bank.
The
complainant himself stated in the cross-examination that after the
Cheque was returned without payment, he has not made any enquiry
with the Bank as to whether sufficient funds were available or not in
the account of the accused.  
In the absence of any authenticated and
supporting evidence, we can not believe that the complainant-respondent
who is employed under the appellant -accused, has raised an amount of Rs.
1,75,000/- that too by obtaining loan of Rs.1,50,000/-  from Bank, only to give
a hand loan to his employer.
As the complaint himself admitted that his net savings
in a year comes to about  Rs.10,000/- ,it is not trustworthy that he was in a position to
extend hand loan of such big amount to the appellant
10. Whereas, the evidence of Mr. B.S. Pai (D.W. 2)
fully
corroborates the version of the appellant. 
He deposed that the talks
of sale/purchase of 3 acres of land were held between the parties in
his presence.
The appellant agreed to purchase 3 acres of land
belonging to the complainant and the appellant had paid an amount
of Rs.30,000/- as advance and handed over a Cheque for
Rs.5,00,000/- . 
It is also noteworthy that the complainant has not
rebutted the evidence of D.W. 2 in the cross examination
Further, the
firm and unshaken evidence of Mr. D.R. Bhat,
a member of the
Karwar Bar Association (D.W. 6) also corroborates the sale purchase
deal between the parties.
 It is evident from the record that DW 6 has
clearly and categorically deposed that the appellant stated to him
about four years back that he had entered into an agreement with the
complainant in presence of B.S. Pai (DW 2) to purchase 3 acres of
land belonging to the complainant and also paid Rs.30,000/- in cash
as advance money and issued a Cheque for Rs.5,00,000/-.
Looking
at the corroborative evidence adduced by the defence witnesses and
more particularly, in the absence of any material evidence in support
of the claim of the respondent-complainant, we cannot uphold the
impugned judgment.
11. For all the aforesaid reasons, the appeal deserves to be
allowed and is accordingly allowed. 

2014 July. Part – http://judis.nic.in/supremecourt/filename=41784

RANJANA PRAKASH DESAI, N.V. RAMANA
Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1522 OF 2014
ARISING OUT OF
SPECIAL LEAVE PETITION (CRL.) NO. 278 OF 2013
RAMDAS S/O KHELUNAIK … APPELLANT
VERSUS
KRISHNANAND S/O VISHNU NAIK … RESPONDENT
JUDGMENT
N.V. RAMANA, J.
Leave granted.
2. This appeal by special leave arises out of Judgment dated 22nd
August, 2012 passed by the High Court of Karnataka, Circuit Bench
at Dharwad, in Criminal Appeal No. 832 of 2007 whereby the High
Court set aside the Judgment and Order of the J.M.F.C. (II-Court),
Karwar acquitting the appellant herein of the offence punishable
under Section 138 of the Negotiable Instruments Act, 1881 (for short
‘the Act’).
3. The facts leading to this appeal, in a nutshell, are that a
Cheque for Rs.5,00,000/- issued by the appellant in favour of the
respondent was dishonoured by the Bank when it was presented for
realization by the respondent, as the appellant had instructed the
Bank to stop the payment. After receiving such information from the
Bank, the respondent served a legal notice calling upon the appellant
to pay the Cheque amount. Upon failure of the respondent to obey
the legal notice warranting him to pay the Cheque amount of
Rs.5,00,000/-, the respondent filed Complaint Case against the
appellant for the offence punishable under Section 138 of the Act.
The Judicial Magistrate (First Class), Karwar took cognizance of the
offence, recorded statement of the complainant under oath,
registered the case and summoned the accused-appellant. The
appellant pleaded not guilty and claimed trial.
4. Before the Trial Court, the complainant-respondent solely led
his own evidence as P.W. 1., whereas the appellant-accused in his
defence led evidence of six witnesses. The case of the complainant
was that he had given a hand loan of Rs.1,50,000/- to the accused-
appellant and three and half years thereafter he had again given
Rs.25,000/- as hand loan, thus in all, the accused-appellant owed him
Rs. 1,75,000/- and to discharge this liability the cheque for
Rs.5,00,000/- was drawn, but the same stood dishonoured at the
instructions of the accused-appellant. Whereas, the case of the
appellant before the Trial Court was that he had entered into an
agreement with the complainant to purchase 3 acres of land
belonging to the complainant for a total consideration of
Rs.10,00,000/- and for that purpose, an advance of Rs.30,000/- in
cash was paid and the Cheque in question for Rs.5,00,000/- was
handed over to the complainant in presence of B.S. Pai (DW 2).
When the complainant failed to execute the sale agreement and not
even willing to return the advance amount of Rs.30,000/- and the
Cheque of Rs.5,00,000/-, he had to instruct the Bank to stop payment
against the said Cheque.
5. The Trial Court, taking note of financial condition of the
complainant who was working under the accused, observed that the
complainant has failed to lead any evidence to corroborate his
version that the Cheque issued by the appellant was to discharge the
liability towards the complainant. Keeping in mind the corroborative
and unshaken defence version, the Trial Court found fault with the
complainant-respondent and observed that instead of executing an
agreement to sell and instead of repaying the advance money and
returning the Cheque, a false complaint was filed by the complainant/respondent
against the accused/appellant. The trial court, therefore, dismissed the complaint
and acquitted the accused/appellant of the offence. 
6.Against the judgment of the Trial Court dismissing the
Complaint and acquitting the accused, the complainant preferred
Criminal Appeal before the High Court. The High Court while allowing
the appeal, set aside the judgment of the Trial Court and sentenced
the appellant-accused to pay a fine of Rs.8,50,000/- within a period of
eight weeks, failing which, to suffer simple imprisonment for a period
of six months. Aggrieved by the reversal of his acquittal, the
appellant-accused filed the present appeal.
7. Learned counsel for the appellant-accused contended that the
Cheque in question was in fact issued as part payment of the agreed
sale/purchase of 3 acres of land belonging to the complainant for a
total consideration of Rs.10,00,000/-, out of which an initial amount of
Rs.30,000/- was also paid by the appellant in cash and the
complainant was supposed to execute a written sale agreement. As
the complainant had not come forward for giving finality to the
commitment by execution of written Sale Agreement and even denied
to return the advance payment of Rs.30,000/- and the Cheque in
question, the appellant had no option but to request his banker to not
honour the Cheque. The complainant mischievously cooked up the
story of giving hand loan to the appellant which the Trial Court had
rightly disbelieved and dismissed the complaint. Although the
complainant-respondent miserably failed to establish the fabricated
story of giving hand loan to the appellant with any reliable evidence,
the High Court took an erroneous view and wrongly set aside the
judgment of the Trial Court and sentenced the appellant under
Section 138 of the Act. Learned counsel, therefore, submitted that the
impugned order is not justified and the same deserves to be set
aside.
8. On the other hand ,  learned counsel for the respondent-complainant
submitted that there is no error in the impugned judgment and
the High Court has rightly allowed the appeal of the complainant.
The complainant had raised a sum of Rs.1,50,000/- by
obtaining loan from Akshya Bank to extend hand loan to the accused-
appellant and 3½ years thereafter, a further sum of Rs.25,000/- was
also given and the Cheque for Rs.5,00,000/- was meant for the total
repayment of the advanced amount of Rs.1,75,000/-. He further
submitted that there was no transaction of sale/purchase of land
between the parties and the accused wanted to avoid repayment of
the hand loan, in the process of which he instructed the banker not to
pass the Cheque. The High Court has, therefore, correctly dealt with
the matter and rightly sentenced the accused who, knowing fully the
eventuality of the offence, committed the same deliberately. Hence
the learned counsel prayed that the appeal lacks merit and the same
deserves to be dismissed
9. We have heard rival contentions of the learned counsel at
length. We find from the record that admittedly, the accused appellant
deals with sale and purchase of landed properties and the
respondent-complainant works as a Lorry Driver under him with a
salary of Rs.2,500/- p.m. and Rs.20/- per day towards miscellaneous
expenses (bhatta). Admittedly, the Cheque in question was for
Rs.5,00,000/- and all the way the stand of the complainant was that
he had given a hand loan of Rs.1,75,000/- to the accused-appellant.
We find no material on record in support of the claim of the
complainant giving hand loan to the accused-appellant. There was
also no calculation of account or stipulation of any interest on the
alleged loan amount to show as to how the amount of Rs.5,00,000/-
was figured, in return of a hand loan of Rs.1,75,000/-, if at all taken by
the appellant from the complainant.  It is also not on record whether
there was sufficient balance amount or not in the bank account of the
accused when the Cheque was dishonoured by the Bank.The
complainant himself stated in the cross-examination that after the
Cheque was returned without payment, he has not made any enquiry
with the Bank as to whether sufficient funds were available or not in
the account of the accused.  In the absence of any authenticated and
supporting evidence, we can not believe that the complainant-respondent
who is employed under the appellant -accused, has raised an amount of Rs.
1,75,000/- that too by obtaining loan of Rs.1,50,000/-  from Bank, only to give 
a hand loan to his employer. As the complaint himself admitted that his net savings
in a year comes to about  Rs.10,000/- ,it is not trustworthy that he was in a position to
extend hand loan of such big amount to the appellant
10. Whereas, the evidence of Mr. B.S. Pai (D.W. 2) fully
corroborates the version of the appellant. He deposed that the talks
of sale/purchase of 3 acres of land were held between the parties in
his presence. The appellant agreed to purchase 3 acres of land
belonging to the complainant and the appellant had paid an amount
of Rs.30,000/- as advance and handed over a Cheque for
Rs.5,00,000/- . It is also noteworthy that the complainant has not
rebutted the evidence of D.W. 2 in the cross examination. Further, the
firm and unshaken evidence of Mr. D.R. Bhat, a member of the
Karwar Bar Association (D.W. 6) also corroborates the sale purchase
deal between the parties. It is evident from the record that DW 6 has
clearly and categorically deposed that the appellant stated to him
about four years back that he had entered into an agreement with the
complainant in presence of B.S. Pai (DW 2) to purchase 3 acres of
land belonging to the complainant and also paid Rs.30,000/- in cash
as advance money and issued a Cheque for Rs.5,00,000/-. Looking
at the corroborative evidence adduced by the defence witnesses and
more particularly, in the absence of any material evidence in support
of the claim of the respondent-complainant, we cannot uphold the
impugned judgment. 
11. For all the aforesaid reasons, the appeal deserves to be
allowed and is accordingly allowed. The impugned judgment of the
8Page 9
High Court is set aside and the judgment of the Trial Court is
restored. The appellant is at liberty to withdraw the amount of
Rs.1,75,000/- with accrued interest if any, deposited by him before
the Trial Court in accordance with this Court’s order dated 30th
November, 2012.
….……………………………….J.
(RANJANA PRAKASH DESAI)
.....………………………………J.
 (N.V. RAMANA)
NEW DELHI
JULY 23, 2014

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