2008 ALL MR (Cri) 3297
IN THE HIGH COURT OF JUDICATURE AT BOMBAY(PANAJI BENCH)
A.P. LAVANDE, J.
Shri. Siddeshwar V. Kittur Vs. Shri. H. T. Gurumurthy
Criminal Appeal No.81 of 2006
24th October, 2008
Petitioner Counsel: Mr. SUDIN USGAONKARR , Ms. GAYATRI KALE
Respondent Counsel: Mr. A. MONTEIRO
Negotiable Instruments Act (1881) Ss.138, 139 - Dishonour of cheque - Presumption under S.139 - Held, in order to find out whether the accused has discharged the burden under S.139 of the Act, all the facts leading to the issuance of the cheque in question and the conduct of the parties has to be taken into consideration. 2008 ALL MR (Cri) 1164 (S.C.), 2008 ALL MR (Cri) 314 (S.C.) and 2006(5) ALL MR (S.C.) 33 - Ref. to. (Para 14)
Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, 2008 ALL MR (Cri) 1164 (S.C.)=(2008)2 SCC (Cri.) 166 [Para 4,6,13]
K. Prakashan Vs. P. K. Surenderan, 2008 ALL MR (Cri) 314 (S.C.)=(2008)1 SCC (Cri) 200 [Para 4,8]
M. S. Narayana Menon alias Mani Vs. State of Kerala, 2006(5) ALL MR 33=(2006)3 SCC (Cri.) 30 [Para 4,7]
JUDGMENT :- By this appeal, the appellant/original complainant challenges the judgment and order dated 30.06.2006 passed by the Judicial Magistrate, First Class, "C" Court, Mapusa in OA Criminal Case No.636/P/03/C acquitting the respondent/accused of the offence punishable under Section 138 of the Negotiable Instruments Act ("The Act" for short). The parties shall, hereinafter, be referred to as per their status before the learned Magistrate.
On 31.08.2002, the accused agreed to purchase a Crusher Unit situated at Alorne, Hankane, Ibrampur Pernem, Goa and an agreement was executed between the complainant and the accused on the same day. The accused issued, in favour of the complainant, three cheques drawn on State Bank of Mysore, Panaji Branch for a sum of Rs.1 Lakh each. The accused requested the complainant time to arrange the funds and finally when the validity of the cheques was to expire, the accused replaced the earlier cheques with three other cheques drawn on State Bank of Mysore, Panaji Branch for Rs.1 Lakh each. Once again, the accused requested the complainant some time to arrange the payment in respect of the said cheques. After waiting for a period of over 5 months, the complainant presented one cheque dated 12.4.2003 with State Bank of India, Mapusa Branch, Mapusa which was returned unpaid for "insufficient funds". Thereafter, a notice was given to the accused calling upon him to pay the cheque amount. The notice was returned with an endorsement "refused returned to sender". The notice was again sent to the accused at the correct address of the accused, but the accused did not receive said notice nor made payment of the cheque amount or any part payment thereof. The complainant filed complaint against the accused for the offence punishable under Section 138 of the Act. The accused pleaded not guilty. To prove his case, the complainant examined himself and placed on record an agreement dated 31.08.2002 and produced several documents. The accused examined himself as D.W.1 and examined one Ladu Naik as D.W.2. The learned Magistrate, by the impugned judgment and order, held that the accused had paid entire amount in respect of agreement entered into between the accused and the complainant and, therefore, the accused did not owe any amount to the complainant. The learned Magistrate also held that the complainant had admitted in the cross-examination that the consideration in respect of transfer of Crusher and leasehold rights, was Rs.4,50,000/- and that he had received the said amount. He had also admitted that he had received a sum of Rs.50,000/- as an advance. The learned Magistrate, therefore, held that there was no liability on the part of the accused to make any payment to the complainant. The learned Magistrate held that the offence under Section 138 of the Act, was not made out and consequently, acquitted the accused.
3. Mr. Usgaonkar, learned Counsel appearing for the appellant/complainant submitted that the learned Magistrate has not properly marshalled and appreciated the evidence led by the parties. He invited my attention to the three agreements dated 27.06.2002 (Exh.PW-1/g), 31.08.2002 (Exh.PW-1/A) and 14.10.2002 (Exh.PW-1/h). He further submitted that the complainant has proved beyond reasonable doubt that the accused had issued cheque in question for discharge of his debt or liability towards the complainant. According to Mr. Usgaonkar, learned Magistrate has completely misread the evidence led by the parties. He further submitted that the defence of the accused that the cheque was issued for payment of the said amount to Mr. Deshprabhu in order to secure the title to the property which was agreed to be transferred in favour of the accused, is falsified by D.W.2 Mr. Ladu Naik. The learned Counsel, therefore, submitted that the findings recorded by the Magistrate, are perverse and the accused has not been able to discharge the presumption under section 139 of the Act and, therefore, the impugned order acquitting the accused deserves to be quashed and set aside.
4. Per contra, Mr. A. Monteiro, learned Counsel for the respondent submitted that the complainant had no right to the property which was agreed to be sold to the accused. He further submitted that the complainant had undertaken to transfer leasehold rights in favour of the accused and three cheques issued by the accused on 12.04.2003, were issued to get the dispute settled. He further submitted that the evidence on record does not establish existence of any legal enforceable liability on the part of the accused in favour of the complainant and, therefore, the impugned order deserves no interference. In support of his submissions, Mr. Monteiro placed reliance upon following judgments :
(i) Krishna Janardhan Bhat Vs. Dattatraya G. Hegde reported in (2008)2 Supreme Court Cases (Cri.) 166 : [2008 ALL MR (Cri) 1164 (S.C.)].
(ii) K. Prakashan Vs. P. K. Surenderan reported in (2008)1 Supreme Court Cases (Cri) 200 : [2008 ALL MR (Cri) 314 (S.C.)].
(iii) M. S. Narayana Menon alias Mani Vs. State of Kerala reported in (2006)3 Supreme Court Cases (Cri.) 30 : [2006(5) ALL MR (S.C.) 33].
6. In Krishna Bhat's case [2008 ALL MR (Cri) 1164 (S.C.)] (supra), the Apex Court has held that Section 139 of the Act merely raises the presumption in favour of the holder of cheque that the said cheque has been issued for discharge of debt or other liability, but existence of legally recoverable debt, is not a matter of presumption under Section 139 of the Act. The Apex Court has further held that the burden of proof on the accused, can be discharged on the basis of the materials already produced on record and it is not necessary for the accused to examine himself. It has been further held that the standard of proof required on the part of the accused, is "preponderance of probability" and the same may be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which the accused relies.
8. In K. Prakashan's case [2008 ALL MR (Cri) 314 (S.C.)] (supra), The Apex Court has held that in an appeal against acquittal, if two views are possible, the Appellate Court should not reverse the judgment of acquittal merely because the other view is possible.
9. The evidence led by the parties, will have to be appreciated in the light of the principles laid down by the Apex Court in the above judgments upon which reliance has been placed by the learned Counsel for the accused.
10. The complainant in his examination-in-chief, has deposed in consonance with the complaint filed. In cross-examination, the complainant stated that besides the agreement dated 31.08.2002 (PW-1/A) produced by him, there was no other document that was signed or executed by him or with any other person having interest in M/s. Vishal Stone Crushing Industries. Thereafter, the complainant added that besides the said agreement, there was another agreement signed by the original owner with the accused, wherein he was the confirming party and the said agreement was executed after first agreement dated 31.8.2002, but he did not remember the exact date, month and year of the second agreement. He further stated that he may be able to produce the said agreement after checking the records with his Advocate. He stated that the name of the original owner of M/s. Vishal Stone Crushing Industry, was Mr. Datta Valvatkar. He further stated that said Datta Valvatkar had executed an agreement for sale of the said Industry in his favour, but he did not remember the details. He further stated that he was able to produce agreement for sale by which said Datta transferred M/s. Vishal Stone Crushing Industry in his favour. He stated that the market value of Stone Crushing Unit that was purchased by him from said Datta, was Rs.7 to 8 Lakhs. The witness thereafter denied several suggestions given by the Advocate for the accused.
In further cross-examination, the witness produced an agreement dated 27.06.2002 Exh.PW-1/g. He also produced a copy of the agreement dated 14.10.2002 Exh.PW-1/h and further stated that the original was with the accused. The complainant further stated that in terms of agreement dated 27.06.2002, he had paid a sum of Rs.50,000/- to said Datta Valvatkar out of agreed amount, but he did not have a receipt showing that he had paid the balance amount to Datta. The witness voluntarily stated that the accused has paid the balance amount to Datta Valvatkar. He further stated that the said property had been sold to someone else as per the information received by him. But he did not have any document in support of the said sale. He further stated that in terms of agreement dated 14.10.2002, he had received all the dues that are to be received in terms of the agreement dated 27.06.2002. He denied the suggestion that on 31.08.2002, he was not the owner of the Crushing Unit. He further stated that he had received whole consideration in terms of the agreement, but it was subject to realisation of the cheques, but till date, the cheques were not realised including the cheque amount involved in the present case. He stated that he did not remember whether the three cheques issued to him, were mentioned in the agreement dated 31.08.2002 or in the agreement dated 14.10.2002. Upon being shown the said agreement, the witness admitted that no such reference was made. He further stated that he did not remember the name of the owner of Survey No.22/1 of village Alorne, but he had met the owner. He admitted that he did not have any agreement in his favour executed by the owners. He further admitted that no separate consideration was shown in the agreement for transfer of leasehold rights and the crusher unit, and the consideration for transfer for the leasehold as well as crushing unit, was shown collectively. The witness admitted that he did not have any document to show that property bearing Survey No.22/1, was sold in his favour. The witness admitted that the owners of the property, were not made parties to the agreement Exh.PW-1/h.
The complainant denied the suggestion that cheque Exh.PW-1/B, was taken by him as payment to be made to the owner of the property, after it was realised that the owners of the property, were not parties and that he had agreed to execute a separate lease deed by the said owner in favour the accused. The complainant also denied the suggestion that the accused through the intervention of common friends got the lease deed executed in his favour from the owners of the said property and, therefore, he was not liable to pay any cheque amount. The complainant denied the suggestion that he was not entitled to pay the cheque amount of Rs.1 Lakh or any amount thereof.
11. The accused who stepped into witness box deposed that the complainant represented to him that he was the owner of stone crushing industry by the name and style of M/s. Vishal Stone Crushing Industry and the leasehold rights in the property bearing Survey No.22/1, and acting upon the said representation, he agreed to purchase the industry along with leasehold rights for Rs.8 Lakhs. He paid Rs.1 Lakh as a part of consideration of the said amount in last week of August, 2002 and the complainant represented that the deed of transfer will be executed in the first week of September, 2002. In first week of September, 2002, the complainant represented that both of them should go to the Advocate of the complainant to have title document of the crusher unit as also documents relating to lease of the property. After going through the documents, he came to know that the complainant was not the owner of the said unit nor he had any leasehold rights in the said property, but he had only agreement of sale which one Datta Valvatkar, who was the owner of the unit and had leasehold rights in the property. He, therefore, told the complainant that he had no business to receive a sum of Rs.1 Lakh in terms of agreement dated 31.08.2002 and that agreement was cancelled and he should return the amount of Rs.1 Lakh received by him and also the cheque issued to him. Whereupon, the complainant told him that he would mediate with the owner Mr. Datta Valvatkar, who would execute the deed of transfer in his favour and he would sign as a confirming party. At the time of execution of the deed of transfer, Mr. Valvatkar told him that he had not informed the tenants with whom he had a lease agreement that he was transferring the lease in his favour and that he was in arrears of the rents to them. He, therefore, paid the entire consideration to Mr. Valvatkar except the sum of Rs.1 Lakh which was to be paid, at the time, the lease would be transfered in his favour by executing proper documents. He also held back the amount to pay arrears of the rent. He admitted that possession of the crusher was handed over on 14.10.2002, but he stated that he encountered stiff opposition and constant trouble and interference from the said tenants, who demanded rent from him and they did not allow him to conduct business. Therefore, he contacted Mr. Valvatkar in November, 2002 and told him to sign and get executed proper documents from the tenants, but Mr. Valvatkar told him that the complainant had taken the responsibility of transfer of leasehold rights in his name and he would be getting the lessor to sign and execute the deed of lease in his favour. For about month, he was in touch the with complainant requesting him to get the lease deed executed. In January, 2002, one person claiming himself to be representative of Dr. Vasudev Deshprabhu, came to the site and stopped the work on the site saying that the said property was co-owned by late Rajendra Deshprabhu, who was his father and as such he should get no objection certificate from him. The complainant was contacted by the accused, who told him that he would look into the matter. Thereafter, in March 2003, the complainant represented him that he had spoken to Dr. Deshprabhu and he was demanding a sum of Rs.1 Lakh in cash for issuing No Objection Certificate. He told the complainant that he was willing to pay amount, but he could not give cash,but he may issue cheque in his name. Since for about one month, the complainant could not get No Objection Certificate from the owner, he requested the complainant to return the cheque and that he would get the requisite No Objection Certificate himself.
In cross-examination, the witness stated that at the time of execution of agreement between himself and the complainant, he was not aware of the agreement executed between the complainant and Mr. Valvatkar. Upon being shown Exh.PW-1/A, he stated that he could not read English fluently and as such he could not tell if it was mentioned in the agreement that the complainant was the owner of the said Crusher. He further stated that the contents of the agreement, were explained by Notary and Advocate P. Karkera. He admitted that in the agreement, it is mentioned that the crusher belonged to M/s. Vishal Stone Crushing Industry. He further stated that at the time of execution of the agreement, he was informed by the Advocate Karkera and one Shri. C. Rajaram that whatever mentioned in the application, was correctly mentioned and he should not think over the said agreement and within two months, crusher will be transferred in his name. He further admitted that in the agreement, it was mentioned that the complainant had agreed to transfer the crusher for a total consideration of Rs.8 Lakhs and the deed of transfer Exh.PW-1/h was signed by himself and the complainant and said Datta Valvatkar. The witness denied the suggestion that in discharge of his liability under the agreement Exh.PW-1/h, he had issued three cheques dated 14.10.2002 for a sum of Rs.1 Lakh each and when validity of the said cheques were to expire, he replaced three cheques dated 12.04.2003 for Rs.1 Lakh each. The witness volunteered that he had issued only one cheque of Rs.1 Lakh. The witness further stated that when he enquired from the complainant, he told him that a sum of Rs.1 Lakh was required to be given to the owner and that is why he had given a cheque of Rs.1 Lakh i.e. the cheque at Exh.PW-1/B. He further stated that cheques at Exhs.44 and 45, were given to the complainant to enable him to settle the matter with the remaining owners of the property. He further stated that he had not issued any other cheque besides the cheques which are placed on record. He further stated that the cheque which was issued at the time of agreement was encashed by the complainant. He had denied the suggestion that he was deposing falsely.
12. D.W.2 Ladu Naik deposed that he knew the accused as well as Datta Valvatkar as they had taken land for crusher bearing Survey No.22/1 of village Alorne. He stated that initially an agreement was executed against Datta Valvatkar and thereafter with the accused. He produced a copy of the agreement dated 10.12.2002 Exh.57. He further deposed that Valvatkar was paying him annual rent of Rs.16,000/- which he had not paid to him for about 8 to 10 years and the balance amount of Rs.96,000/- was paid by the accused at the time of execution of the agreement which Valvatkar was liable to pay to him. He further stated that the accused also paid a sum of Rs.20,000/- as rent. He stated that he did not know the complainant.
In cross-examination, He stated that he did not know the complainant and as such there was no question of making any payment to him. He knew that the accused had purchased crusher from Datta, but he could not tell the exact number of years, the accused operated the crusher. According to witness, the owner of the said property bearing Survey No.22/1, was one Lad, who was his landlord. He further stated that the names of Deshprabhu mentioned in the Forms I and XIV, were wrongly recorded. Said Deshprabhu never entered the said property nor objected the operation of the crusher. The witness denied the suggestion that he was tutored by the accused to depose in the case and that he was deposing falsely.
13. The question which arises for consideration, is whether the cheque in question was issued by the respondent for legally enforceable debt or liability. The evidence led by the parties which has been referred to above discloses that the accused and the complainant entered into an agreement Exh.PW-1/A by which the complainant agreed to transfer crusher unit together with leasehold rights in the property bearing Survey No.22/1. The so called deed of transfer Exh.PW-1/h, entered into between the complainant and the accused and Shri. Datta Damodar Valvatkar, purports to transfer the crusher unit along with leasehold rights in favour of the accused. The document cannot be construed as a document or transfer because by the said document, right of immovable property over Rs.100/-, was sought to be transferred and as such the same could not have been executed on a stamp paper of Rs.20/-. Moreover, the said document is not registered, therefore, the same cannot be treated as a conveyance. From analysis of the evidence led by the parties, it appears that the accused agreed to pay Rs.8 Lakhs to the complainant for the transfer of the crusher unit along with leasehold rights, on which the complainant had entered into an agreement with Datta Valvatkar for Rs.4,50,000/-. Therefore, it is clear that the balance amount of Rs.3,50,000/- was by way of commission of the complainant. The evidence, oral and documentary which has been referred to above, clearly discloses that the leasehold rights in the property, were not transferred in favour of the accused as is evident from the fact that the lessor of Datta Valvatkar, has not executed any document in favour of the accused. According to the accused, the complainant initially had difficulty in running crusher unit on account of objection from the persons, who claimed to be lessors of the Datta Valvatkar, to whom the rent was not paid by the complainant. In this factual background, it is difficult to hold that the complainant, who has signed the deed of transfer as confirming party, is entitled to receive the cheque amount. In this connection, learned Counsel for the accused is right in relying upon the judgment of Apex Court in Krishna Bhat's case [2008 ALL MR (Cri) 1164 (S.C.)] (supra) in which, the Apex Court, while dealing with a case under Section 138 of the Negotiable Instruments Act, has held that the Court must be on guard to see that merely on the application of the presumption as contemplated under Section 139 of the Act, no prejudice is caused to a party.
14. In order to find out whether the accused has discharged the burden under Section 139 of the Act, all the facts leading to the issuance of the cheque in question and the conduct of the parties, has to be taken into consideration. In my considered opinion, having regard to the evidence led by the parties, the accused has discharged the burden of proving that the cheque in question was not issued in respect of legally recoverable debt. Moreover, it is pertinent to note that in respect of other two cheques of Rs.1 Lakh each, no complaint has been filed by the complainant against the accused. This fact creates serious doubt about the case set up by the complainant. Although, all the reasons given by the Trial Court are not well founded, the acquittal of the accused, is not liable to be interfered with for the reasons mentioned above.