TRIYAMBAK S.HEGDE vs. SRIPAD

                                                      REPORTABLE    IN THE SUPREME COURT OF INDIA    CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NOS.849­850 OF 2011 Triyambak S. Hegde   .…Appellant(s) Versus Sripad        ….Respondent(s) J U D G M E N T A.S. Bopanna,J. 1. The   appellant   is   before   this   Court   assailing   the common   order   dated   01.12.2009   in   Criminal   Revision Petition   No.1282/2006   connected   with   Criminal   Revision Petition   No.1481/2006   passed   by   the   High   Court   of Karnataka. Through the said order the learned Single Judge has allowed Criminal Revision Petition No.1282/2006 filed by   the   respondent   herein.   The   Criminal   Revision   Petition Signature Not Verified Digitally signed by R Natarajan Date: 2021.09.23 16:33:11 IST Reason: No.1481/2006   filed   by   the   appellant   herein   has   been Page 1 of 23 dismissed. Consequently, the conviction of the respondent, ordered by the learned Judicial Magistrate and affirmed by the learned Session Judge is set aside.    The case of the appellant is that the respondent who 2. was known to him for the past few years approached the appellant and informed that due to his financial difficulty he intends to sell the house situate in Sirsi town. The appellant agreed to purchase the same for the negotiated total sale consideration of Rs.4,00,000/­ (Rupees four lakhs only). An agreement dated 06.06.1996 was executed by the respondent while   receiving   the   advance   amount   of   Rs.3,50,000/­ (Rupees   three   lakhs   fifty   thousand   only).   Subsequently, when the appellant made certain enquiries, he learnt that the house stood in the name of the father of the respondent and the respondent did not have the authority to sell the same. In that view, the appellant demanded the return of Rs. 3,50,000/­ (Rupees three lakhs fifty thousand only) which he had paid as the advance amount. The respondent instead of paying the entire amount, issued a cheque dated 17.05.1998 for   the   sum   of   Rs.   1,50,000/­   (Rupees   one   lakh   fifty thousand   only)   being   part   of   the   amount.   The   appellant Page 2 of 23 presented the cheque for realisation on 20.05.1998 when it came to be dishonoured with the endorsement ‘insufficient funds’.  The appellant therefore got issued a notice informing 3. the respondent about the cheque being dishonoured and also demanding payment of the cheque amount. The respondent, though received the notice, failed to respond to the same. In that view, the appellant filed a complaint under Section 200 of   the   Criminal   Procedure   Code   (for   short   ‘CrPC’)   on 14.07.1998   in   the   Court   of   the   Judicial   Magistrate,   First Class   (for   short   ‘JMFC’)   at   Sirsi   which   was   registered   as Criminal Case No.790/2000. Through the said complaint the appellant   sought   prosecution   of   the   respondent   under Section   138   of   the   Negotiable   Instruments   Act,   1881   (for short   ‘N.I.   Act’).   The   learned   JMFC   after   providing opportunity   to   both   the   parties   convicted   the   respondent through   the   judgment   dated   09.06.2005   for   the   offence punishable under Section 138 of the N.I. Act; sentenced the respondent to undergo simple imprisonment for six months and to pay  the  fine  of  Rs. 2,00,000/­ (Rupees  two  lakhs only). In default of payment of the fine amount, the accused Page 3 of 23 was ordered to undergo simple imprisonment for a further period   of   three   months.   Out   of   the   fine   amount,   Rs. 1,95,000/­ (Rupees one lakh ninety­five thousand only) was ordered to be paid to the appellant as compensation.  The respondent herein claiming to be aggrieved by the 4. said judgment dated 09.06.2005 passed by the JMFC, filed an   appeal   before   the   District   &   Sessions   Judge,   Uttara Kannada,   Karwar   in   Criminal   Appeal   No.57/2005.   The appellant   herein   also   filed   an   appeal   in   Criminal   Appeal No.65/2005 before the District and Sessions Judge seeking that the sentence imposed on the respondent by the Learned JMFC be enhanced, as the compensation of Rs. 1,95,000/­ (Rupees one lakh ninety­five thousand only) ordered to be paid to the appellant is insufficient. The learned Sessions Judge having re­examined the matter and on reassessing the evidence   dismissed   both   the   appeals   through   separate judgments both dated 22.04.2006. The respondent herein, in that  view,  filed the   Revision  Petition in  Criminal  Revision Petition   No.1282/2006   and   the   appellant   herein   filed   the connected Revision Petition No.1481/2006 before the High Court. The learned Single Judge, as noted has allowed the Page 4 of 23 Revision Petition filed by the respondent herein and set aside the conviction order passed by the learned JMFC, which had been confirmed by the learned Sessions Judge. It is in that background, these appeals have arisen for consideration.  We have heard Mr. Rajesh Inamdar, learned counsel 5. for the appellant, Mr. G.V. Chandrasekar, learned counsel for the respondent and perused the appeal papers.  Before   the   learned   Magistrate,   the   appellant   had 6. examined himself as PW1 and got marked the documents at Exhibits P1 to P6. The deposition of the appellant as PW1 indicated that the appellant and the respondent were known to each other for about 7 to 8 years prior to the transaction in question. In that view, in the year 1996 the respondent approached the appellant, explained his financial difficulties and due to his financial need, offered to sell the property situate in Sirsi. In that light, the price was finalised at Rs. 4,00,000/­(Rupees   four   lakhs   only)   and   on   executing   an agreement   dated   06.06.1996   (Exhibit   P­6),   the   advance amount of Rs. 3,50,000/­(Rupees three lakhs fifty thousand only) was paid.  The balance amount of Rs. 50,000/­ (Rupees Page 5 of 23 fifty thousand only) was to be paid at the time of registration and the transaction was to be completed within six months. It   is   alleged   that   the   respondent   kept   on   postponing   the registration on one pretext or the other. Therefore, on an enquiry the appellant learnt that the property was in fact in the name of the father of the respondent and the respondent was not the absolute owner. Since the respondent was not authorised   to   sell,   the   appellant   proceeded   to   cancel   the agreement and demanded to pay back the advance amount. In that view, the cheque dated 17.05.1998 (Exhibit P­2) was drawn   by   the   respondent   for   the   sum   of   Rs.   1,50,000/­ (Rupees one lakh fifty thousand only) which was towards part of the advance amount paid by him. The cheque on being presented was however dishonoured. The memo issued by the bank was marked as Exhibit P­3. The notice issued by the appellant and the postal receipt was marked as Exhibits P­4 and P­5. The respondent did not choose to tender any rebuttal evidence in the Court of JMFC, though he disputed the incriminating circumstances which were put to him while recording the statement under Section 313 of the CrPC.  Page 6 of 23 In that background, the learned JMFC on taking note 7. that the signature on the agreement dated Exhibit P­6, more particularly on the cheque at Exhibit P­2 being admitted, it raised presumption under Section 118 and 139 of the N.I. Act,  which had   not been rebutted.  Therefore,  the  learned JMFC   convicted   the   respondent.   As   noted,   the   learned Sessions   Judge   on   re­appreciating   the   evidence   had confirmed   the   conviction   and   sentence.   The   respondent however put forth the contention in the Revision Petition only at the time of argument, that the appellant did not pay the amount but his signature had been secured on the cheque (Exhibit   P­2)   and   the   agreement   (P­6)   under   peculiar circumstances. It was contended on his behalf that he was a party to a case in the Court of the Civil Judge, Sirsi wherein he had engaged the services of an advocate by name Mr. Rama Joshi. It was his further case that Mr. Vishwanath Hegde who is the junior of Mr. Rama Joshi happens to be the relative of the appellant herein. He, thus being in a dominant position had obtained the signature.  Page 7 of 23 The   learned   Single   Judge   having   accepted   the   said 8. contention which was raised in the Revision for the first­time during arguments proceeded to hold that the appellant had not discharged the burden of proving that he had paid Rs. 3,50,000/­ (Rupees three lakhs fifty thousand only) to the respondent and that the cheque had been issued towards payment of a part of the same. The learned Single Judge was also of the opinion that the agreement at Exhibit P­6 cannot be believed, as well.  Mr. Rajesh Inamdar, the learned counsel appearing on 9. behalf of the appellant has contended that the signature on the documents at Exhibit P­6 and the cheque at Exhibit P­2 is   not   disputed   by   the   respondent.   In   that   view,   it   is contended that the learned JMFC was justified in raising a presumption   against   the   respondent   and   convicting   him since there was no rebuttal evidence or contrary material whatsoever. It is contended that the document at Exhibit P­6 was relied to indicate that there was a transaction entered into between the parties towards which the payment was made but the manner in which the High Court has adverted Page 8 of 23 to the said document is beyond the scope of the requirement in a proceeding under Section 138 of the N.I. Act. In that circumstance, it is contended that the learned Single Judge has proceeded at a tangent and has set aside the concurrent judgments of the  courts below, though limited scope was available in a Revision Petition.  Mr. G.V. Chandrasekar, the learned counsel for the 10. respondent   submitted   that   the   trial   court   and   the   lower appellate   court   has   not   examined   the   case   in   its   correct perspective. Instead, merely because the signature on the cheque was admitted the courts jumped to the conclusion by raising   a   presumption,   though   there   was   no   evidence   on record to show that the appellant possessed the funds and the same had been actually paid by him to the respondent to constitute legally recoverable debt. It is contended that the High Court was justified in examining and concluding with regard   to   the   circumstance   under   which   the   cheque   had been signed and, in that light, had set aside the conviction. The   order   therefore   does   not   call   for   interference   is   his contention. Page 9 of 23 From the facts arising in this case and the nature of 11. the   rival   contentions,   the   record   would   disclose   that   the signature on the documents at Exhibits P­6 and P­2 is not disputed. Exhibit P­2 is the dishonoured cheque based on which the complaint was filed. From the evidence tendered before the JMFC, it is clear that the respondent has not disputed the signature on the cheque. If that be the position, as noted  by  the   courts  below  a  presumption  would   arise under Section 139 in favour of the appellant who was the holder of the cheque. Section 139 of the N.I. Act reads as hereunder: ­ ­   It   shall   be “139.   Presumption   in   favour   of   holder presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. ” Insofar as the payment of the amount by the appellant 12. in the context of the cheque having been signed by the respondent,   the   presumption   for   passing   of   the consideration would arise as provided under Section 118(a) of N.I. Act which reads as hereunder: ­ “118.   Presumptions   as   to   negotiable   instruments   – Until the contrary is proved, the following presumptions shall be made: ­ Page 10 of 23 (a) of   consideration   –   that   every   negotiable instrument   was   made   or   drawn   for consideration,   and   that   every   such instrument,   when   it   has   been   accepted, indorsed,   negotiated   or   transferred,   was accepted, indorsed, negotiated or transferred for consideration. ” 13.    The above noted provisions are explicit to the effect that such presumption would remain, until the contrary is proved. The learned counsel for the appellant in that regard has relied on the decision of this court in   K. Bhaskaran vs. Sankaran Vaidhyan Balan & Anr. (1999) 7 SCC 510 wherein it is held as hereunder: ­

The learned counsel for the respondent has however 14. referred to the decision of this Court in   Basalingappa vs. (2019)   5   SCC   418   wherein   it   is   held   as Mudibasappa hereunder: ­ Page 11 of 23 “25.  We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by this Court in following manner:   Once   the   execution   of   cheque   is 25.1. admitted  Section   139  of   the   Act   mandates   a presumption that the cheque was for the discharge of any debt or other liability. 25.2.   The   presumption   under  Section   139  is   a rebuttable   presumption   and   the   onus   is   on   the accused   to   raise   the   probable   defence.   The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3.   To rebut the presumption, it is open for the accused   to   rely   on   evidence   led   by   him   or   the accused can also rely on the materials submitted by  the   complainant   in  order   to  raise   a  probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4.   That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5.  It is not necessary for the accused to come in the witness box to support his defence. Page 12 of 23 26.  Applying the preposition of law as noted above, in   facts   of   the   present   case,   it   is   clear   that signature on the cheque having been admitted, a presumption shall be raised under Section 139 that the   cheque   was   issued   in   discharge   of   debt   or liability. The question  to be looked  into  is  as  to whether any probable defence was raised by the accused. In cross­examination of PW1, when the specific question was put that cheque was issued in relation to loan of Rs.25,000 taken by the accused, PW1 said that he does not remember. PW1 in his evidence admitted that he retired in 1997 on which date he received monetary benefit of Rs.8 lakhs, which  was encashed by  the  complainant. It  was also brought in the evidence in the evidence that in the year 2010, the complainant entered into a sale agreement   for   which   he   paid   an   amount   of Rs.4,50,000   to   Balana   Gouda   towards   sale consideration.   Payment   of   Rs.4,50,000   being admitted in the year 2010 and further payment of loan of Rs.50,000 with regard to which Complaint No.119 of 2012 was filed by the complainant, copy of which complaint was also filed as Ext. D­2, there was   burden   on   the   complainant   to   prove   his financial capacity. In the year 2010­2011, as per own case of the complainant, he made payment of Rs.18 lakhs. During his cross­examination, when financial capacity to pay Rs. 6 lakhs to the accused was   questioned,   there   was   no   satisfactory   reply given by the complainant. The evidence on record, thus,   is   a   probable   defence   on   behalf   of   the accused,   which   shifted   the   burden   on   the complainant   to   prove   his   financial   capacity   and other facts.” Page 13 of 23 15.    In that light, it is contended that the very materials produced by the appellant and the answers relating to lack of   knowledge   of   property   details   by   PW­1   in   his   cross­ examination would indicate that the transaction is doubtful and no evidence is tendered to indicate that the amount was paid. In such event, it was not necessary for the respondent to tender rebuttal evidence but the case put forth would be sufficient to indicate that the respondent has successfully rebutted the presumption.        On the position of law, the provisions referred to in 16. Section 118 and 139 of N.I. Act as also the enunciation of law as made by this Court needs no reiteration as there is no ambiguity whatsoever. In,  Basalingappa vs. Mudibasappa (supra) relied on by the learned counsel for the respondent, though on facts the ultimate conclusion therein was against raising   presumption,   the   facts   and   circumstances   are entirely different as the transaction between the parties as claimed in the said case is peculiar to the facts of that case where the consideration claimed to have been paid did not find   favour   with   the   Court   keeping   in   view   the   various Page 14 of 23 transactions and extent of amount involved. However, the legal position relating to presumption arising under Section 118 and 139 of N.I. Act on signature being admitted has been   reiterated.   Hence,   whether   there   is   rebuttal   or   not would depend on the facts and circumstances of each case. 17. In the instant facts, as noted, the case put forth was that there was a transaction between the parties where the respondent had agreed to sell the house towards which an advance amount of Rs.3,50,000/­ (Rupees three lakhs fifty  thousand  only) was  paid.  The cheque   issued  by  the respondent   was   towards   part   repayment   of   the   advance amount since the appellant realized that the respondent did not have proper title to the property and the transaction could not be carried forward. Since the signature on the agreement   (Exhibit   P­6)   and   more   particularly   the dishonored   cheque   (Exhibit   P­2)   was   not   disputed,   the presumption   as   provided   in   law   had   arisen.   Such presumption would remain till it is rebutted. The question however is as to whether, either from the material available on record or the nature of contentions put forth it could be Page 15 of 23 gathered that the presumption had been rebutted by the respondent. As noted by the High Court, the contention of the respondent was that the relative of the appellant was the junior in the office of his advocate, Mr. Rama Joshi, who represented the respondent in a civil case. In that light, it was further contended that due to such dominant position, the respondent was made to sign on the agreement and the cheque though the money had not been paid. The said story was urged for the first time before the High Court. There is no such suggestion or admission to that effect as contended by   the   learned   counsel   for   the   respondent.   In   fact,   the suggestion   made   to   PW1   in   his   cross­examination   is   to contend that the cousin of the appellant was an advocate and as to whether he had consulted him before entering into the agreement, to which PW1 has answered that he did not find the need to do so. The admission that his cousin is an advocate   does   not   lead   to   the   conclusion   that   he   had admitted that he was in a dominant position. 18.   The Learned Single Judge however while accepting the said   story   has   referred   to   certain   discrepancies   in   the Page 16 of 23 agreement (Exhibit P­6) relating to the details of the property and the appellant having admitted with regard to not having visited the property or having knowledge of the location of the property. Such consideration, in our opinion, was not germane   and   was   beyond   the   scope   of   the   nature   of litigation. The validity of the agreement in the manner as has been examined by the learned Single Judge may have arisen if   the   same   was   raised   as   an   issue   and   had   arisen   for consideration   in   a   suit   for   specific   performance   of   the agreement. The  decision in   K. Chinnaswamy Reddy vs. State of Andhra Pradesh and Anr.   AIR 1962 SC 1788 relied on by the learned counsel for the respondent would not be of assistance in the present facts. Firstly, in the said decision   this   Court   has   expressed   the   limited   power available   to   the   High   Court   in   Revision   Petition.   Even otherwise, we have disapproved the manner in which the learned Single Judge has proceeded to examine the matter on contentions which were not raised as a foundation before the   Trial   Court.   In   the   instant   case,   the   said   agreement (Exhibit P­6) had been relied upon only to the limited extent to indicate that there was a transaction between the parties Page 17 of 23 due to which the amount to be repaid had been advanced. To that extent the document had been proved in evidence and such evidence had not been discredited in the cross­ examination.  Further,   though   the   respondent   had   put   forth   the 19.   contention that a relative of the appellant was the junior of his   advocate   and   he   has   used   his   dominant   position   to secure the signature on the cheque, there is absolutely no explanation   whatsoever   to   indicate   the   reason   for   which such necessity arose for him to secure the signatures of the respondent, if there was no transaction whatsoever between the parties. That apart, the said story even to be examined was put forth for the first time before the High Court. As is evident from the records the notice issued by the appellant intimating the dishonorment of the cheque and demanding payment, though received by the respondent has not been replied. In such situation, the first opportunity available to put forth such contention if true was not availed. Even in the proceedings before the learned JMFC, the respondent has   not   put   forth   such   explanation   in   the   statement Page 18 of 23 recorded under Section 313 of CrPC nor has the respondent chosen to examine himself or any witness in this regard. The said contention had not been raised even in the appeal filed before the learned Sessions Judge. Further, the story as put forth apart from being an 20. afterthought,  ex facie  appears to be contrary to the records since the contention on behalf of the respondent is that the dominant position of the junior advocate in the office of Mr. Rama   Joshi   was   used   to   secure   the   signature   when   the respondent had engaged the said advocates in an earlier civil case. From the cause title in the present case, in Criminal Case   No.790/2000   before   the   JMFC,   it   is   seen   that   Mr. Rama Joshi is the same learned advocate who had defended the respondent in this litigation. If what was being stated was the true fact, the respondent would have brought the same to the notice of the said advocate and in such situation would not have engaged the same advocate against whose junior he had a grievance and engage him to represent the case relating to dishonor  cheque which was  of the  same subject matter. Further, if the cheque was secured in such Page 19 of 23 circumstance   and   was   not   voluntary,   it   is   difficult   to comprehend   as   to   why   it   would   have   been   drawn   for Rs.1,50,000/­(Rupees   one   lakh   fifty   thousand   only)   only when it is the case of the appellant that the advance amount paid   was   Rs.3,50,000/­(Rupees   three   lakh   fifty   thousand only)   and   had   to   get   back   the   entire   advance   paid.   The natural   conduct   would   have   been   to   secure   for   the   full amount if that was the situation. Keeping all these aspects in view, the case put forth by the respondent does not satisfy the requirement of rebuttal even if tested on the touchstone of preponderance of probability. Therefore, in the present facts   it   cannot   be   held   that   the   presumption   which   had arisen   in   favour   of   the   appellant   had   been   successfully rebutted by the respondent herein. The High Court therefore was not justified in its conclusion. 21.   Having   arrived   at   the   above   conclusion,   it   would   be natural   to   restore   the   judgment   of   the   Learned   JMFC. Though in that regard, we confirm the order of conviction, we have given our thoughtful consideration relating to the appropriate sentence that is required to be imposed at this Page 20 of 23 stage, inasmuch as; whether it is necessary to imprison the respondent at this point in time or limit the sentence to imposition of fine. As noted, the transaction in question is not an out and out commercial transaction. The very case of the appellant before the Trial Court was that the respondent was in financial distress and it is in such event, he had offered to sell his house for which the advance payment was made by the appellant. The subject cheque has been issued towards repayment of a portion of the advance amount since the   sale   transaction  could   not  be   taken  forward.   In  that background, what cannot also be lost sight of is that more than two and half decades have passed from the date on which the transaction had taken place. During this period there would be a lot of social and economic change in the status of the parties. Further, as observed by this Court in (2011) 4 Kaushalya Devi Massand vs. Roopkishore Khore  SCC 593, the gravity of complaint under N.I. Act cannot be equated with an offence under the provisions of the Indian Penal Code, 1860 or other criminal offences. In that view, in our opinion, in the facts and circumstances of the instant case, if an enhanced fine is imposed it would meet the ends Page 21 of 23 of  justice.   Only   in   the   event   the   respondent­accused   not taking the benefit of the same to pay the fine but committing default instead, he would invite the penalty of imprisonment. Hence, appropriate modification is made to the sentence in the manner as indicated hereinbelow: 22. For all the aforestated reasons, the following order; (i) The order dated 01.12.2009 passed by the High Court in Criminal Revision Petition No. 1282/2006 and 1481/2006 are set aside.   (ii) The conviction ordered in C.C. No.790/2000 by the learned JMFC is restored.  (iii) The   sentence   to   undergo   simple imprisonment   for   six   months   and   fine   of Rs.2,00,000/­   (Rupees   two   lakhs   only)   is however modified. The Respondent/Accused is instead sentenced to pay the fine of Rs. 2,50,000/­ (Rupees two lakhs fifty thousand only)   within   three   months.   In   default   of payment   of   fine   the   Respondent/Accused Page 22 of 23 shall   undergo   simple   imprisonment   for   six months.   (iv) From   the   fine   amount,   a   sum   of   Rs. 2,40,000/­ (Rupees two lakhs forty thousand only)   shall   be   paid   to   the Appellant/Complainant as compensation.   (v) The   Appeals   No.849­850/2011   are accordingly allowed in part.   (vi) The   pending   applications,   if   any,   stand disposed of.   ………….…………CJI (N.V. RAMANA)           ………….…………….J. (SURYA KANT)      ………….…………….J. (A.S. BOPANNA) New Delhi, September 23, 2021 Page 23 of 23