2014 ALL MR (Cri) 4993
IN THE HIGH COURT OF JUDICATURE AT BOMBAY (NAGPUR BENCH)

A.R. JOSHI, J.

Vishal Nagari Sahakari Pat Sanstha Maryadit, Koradi Vs. Damodar Rajeram Thakre

Criminal Appeal No.76 of 2010

14th September, 2012

Petitioner Counsel: Shri S.R. SONI
Respondent Counsel: Shri N.R. BARGAT

(A) Negotiable Instruments Act (1881), S.138 - Dishonour of cheque - Appeal against acquittal - Complaint by co-operative society that cheque issued by its respondent towards repayment of loan was dishonoured - Respondent denied loan by him and contended that blank signed cheque was issued by him as a guarantor to the loan taken by his brother - Also that his brother had already discharged his liability - However, said defence was not established even on preponderance of probability - Loan application of brother of respondent mentions name of respondent as witness and not guarantor - Trial court erred in appreciating other aspects and raised suspicion without any foundation - Acquittal order liable to be quashed. (Paras 8, 9, 10, 11, 12, 13)

(B) Negotiable Instruments Act (1881), S.138 - Dishonor of cheque - Sentence - Quantum of - Contention of complainant that conduct of accused in raising a false defence and denial of loan itself needs to be considered - Whereas accused pleaded that he runs a tea stall and is the only earner in family - Held, token substantive sentence and fine to the extent of twice the cheque amount would meet the ends of justice - Sending accused in jail would not be even in interest of complainant society - Accordingly, accused sentenced to imprisonment till rising of Court and to pay fine twice the amount of dishonoured cheque. (Paras 14, 15, 16)

JUDGMENT

JUDGMENT :- Heard rival submissions at length on the earlier date and also today on this criminal appeal preferred by the appellant-original complainant challenging the order of acquittal of the respondent in the matter of offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, the Act).

2. The impugned judgment and order dated 30/4/2009 was passed by the Judicial Magistrate, First Class (Special Court), Nagpur, thereby acquitting the respondent-accused of the offence punishable under Section 138 of the Act mainly holding that the accused proved that the concerned cheque (Exh.23) was not issued by him for any liability, and therefore, the offence punishable under Section 138 of the Act is not attracted.

3. In order to appreciate the rival submissions, the case of the complainant in nutshell can be mentioned as under.:

The complainant is society registered under the Maharashtra Co-operative Societies Act, 1960 and engaged in the business of advancing loan on credit to its shareholders/members. The respondent-accused is shareholder of the complainant-society. He requested for loan facility for Rs.1,00,000/- on 16/01/2003 and executed necessary documents and agreed to repay the loan amount by monthly installments. He failed to pay the installments and the amount of principle as well as interest were due and payable to the complainant-society. Towards part payment of the outstanding dues, the respondent-accused issued a cheque bearing No.10757 dated 09/11/2006 for Rs.1,61,918/- drawn on Bank of Maharashtra, Jaripatka Branch, Nagpur. The said cheque was dishonoured due to reasons, "funds insufficient". A cheque return memo dated 11/11/2006 was issued. Then, demand notice was issued to the respondent-accused by registered post with acknowledgment due on 05/12/2006 on the address known to the complainant-society. The respondent-accused was duly served with the said notice on 13/12/2006, but failed to comply and also did not reply the notice. Hence, the prosecution under Section 138 of the Negotiable Instruments Act.

4. The defence of the respondent-accused was that of total denial in as much as he had never taken any loan from the complainant-society and disputed the cheque given towards the repayment of any legally enforceable liability. According to him the cheque was signed by him but in blank and given to the society being the guarantor to the loan granted by the society to his brother-defence witness (D.W.) No.1.

5. During the trial, two prosecution witnesses were examined on behalf of the complainant-society. Then statement of the respondent-accused was recorded under Section 313 of the Code of Criminal Procedure. The respondent-accused did not enter into the witness box and did not give his defence, however, examined his brother as D.W.-1 alleging that his brother had taken the loan from the concerned society and the respondent-accused was asked to give a cheque as guarantor to the said loan and said cheque given in blank though signed by the respondent-accused, was misused by the society for filing the complaint under Section 138 of the Act. According to the respondent-accused, the loan taken by his brother was repaid by his brother, however, the cheque allegedly given by the respondent-accused to the society was never returned to him and misused.

6. In the present appeal preferred by the complainant-society, it is to be ascertained whether the circumstances and the material before the trial Court warrant interference in the impugned judgment and order of acquittal and whether there are findings recorded by the trial Court which are perverse in nature and required to be set aside?

7. The defence of the respondent-accused is mainly in fourfold;

(1) The respondent accused gave blank cheque with his signature without filling any details even the name of the payee, date and amount.

(2) The Bank statement of the account of the respondent-accused produced on record at Exh. 29 is not proved, in the strict sense, as to proof of the document under the Indian Evidence Act.

(3) Both the prosecution witnesses are not authorized to depose for and on behalf of the complainant-society.

(4) The defence witness No.1, brother of the respondent-accused, had already discharged his liability and hence the cheque allegedly given by way of guarantee to the said loan lost its efficacy and hence action under Section 138 of the Act, shall not lie.

8. In analyzing the material before the Court by evidence of P.W.-1 and P.W.-2, it is clear that P.W.-1 was authorized to represent the complainant-society as there was a resolution passed by the society authorizing P.W.-1 to give evidence vide Exh.37. Moreover, a power of attorney (Exh.36) was produced before the Court through P.W.-2, a officer from the society. Even, the loan application form (Exh.28) was produced before the Court to which the cross-examination was done by respondent-accused. Though certain objections were raised as to non mentioning the rate of interest or the disbursement of loan of Rs. 1,00,000/- allegedly by the cheque, non mentioning the said cheque number, on all probabilities, it cannot be said that there was no any loan transaction between the society and the present respondent-accused. The very acceptance of the signing on the cheque (Exh.23) is required to be taken in favour of the complainant and in that event, the defence raised by the accused as to it was not for any legally enforceable liability but for standing as a guarantor to the loan taken by his brother, was definitely on the respondent-accused. In the considered opinion of this Court, the said liability has not been fulfilled much less the proof as to the present respondent-accused then stood as guarantor to the loan of his brother. This is more so when the loan application of the brother of the accused do not mention the name of the accused as guarantor. His name is appearing as a witness in the said loan application and different names including the name of his wife, are appearing as guarantors to the said loan. When the respondent-accused came forward with a specific defence, it is must for him to establish the same though on preponderance of probability. Mere alleging a particular thing as in the present case, cannot be accepted as sufficient proof for accepting the defence of the respondent-accused. On this aspect, it must be said that the trial Court had miserably failed to appreciate this evidence and to hold that the accused had proved that the concerned cheque was not issued by him for any liability.

9. So far as non establishment of the statement of accounts of the accused, it must be mentioned that there is cross-examination on the said statement of accounts (Exh.29) and even the same has been proved by the prosecution witnesses and hence the argument on this count on behalf of the defence, cannot be sustained.

10. So far as the authority of P.W.-1 and P.W.-2 to depose and give evidence on behalf of the complainant-society, challenged by the respondent-accused, even the trial Court at one point of time was with the complainant and has specifically mentioned in the impugned judgment Para No.16, last line, mentioning that there is no reason to object to filing of affidavit by the witness on behalf of the complainant and even though there is no specific mention by the authority to depose, filing of affidavit itself can also be construed as giving evidence on behalf of the complainant. Hence, the objection of the accused cannot be sustained. In spite of these observations, in earlier paragraph No.15, the trial Court had questioned and raised doubt as to why the original power of attorney, which was produced by P.W.2, was not filed earlier by P.W.-1, that doubting the case of the complainant. Even, the further observations of the trial Court are unwarranted and perverse in nature. The said observations are as under.:

"........it is for the complainant itself to explain as to why it had not filed the original Power of Attorney at an earlier stage. Therefore, it can be said that complainant has suppressed some material facts. Even it be held that there was a valid Power of Attorney in favour of complainant witness Shrikant Lakadkar, on perusal of its copy Exh.36, it can be seen that nowhere it specifically authorizes the witness to depose before the court. It only authorizes the witness to represent the complainant and appear on its behalf in all proceedings. I am of the opinion that the said document power of attorney is not helpful to the complainant.

11. On the aspect of loan of Rs.1,00,000/- taken by the respondent-accused from the complainant-society, it is specifically mention in the impugned judgment in Para-20 to the following effect.:

"20. In this regard, conduct of the accused also need to be looked into. As the accused did not enter into the witness box to challenge the stand of the complainant and instead he examined his brother Shamu who claimed that the accused did not obtain loan. However, the witness admitted that the accused never inquired from him as to why in spite of not obtaining any loan from the complainant, he (the accused) was issued a notice. Thus, the accused and his brother took no steps against the complainant in respect of allegations of obtaining loan by the accused from the complainant. The said conduct itself suggest that the stand of the accused is not believable regarding non-receipt of the loan of Rs.1,00,000/-.

21. It is highly unlikely that any person of ordinary prudent would have kept mum after receiving notice containing allegations of default in repayment of loan. Such person would have definitely raised hue and cry over the said allegations. Therefore, it cannot be said that the accused never took loan of Rs.1,00,000/-. So far as regards the alleged variations in both the documents agreement of loan Exh.28 and statement of account Exh.29 are concerned, they merely raised some doubts over the case of the complainant and the effect thereof will be considered at a little later. Nevertheless, there is no doubt that the accused was advanced loan of Rs.1,00,000/- by the complainant."

12. So far as the loan amount taken by the brother of the respondent-accused and agreement to that effect, as suspicion was raised without any foundation, by the trial Court that why the said loan application and loan agreement Exh.46 was not produced until the cross-examination of the brother of the accused. In fact, it was the defence of the accused that he gave cheque as a guarantor to the society towards the satisfaction of the loan taken by his brother and this defence was made known to the complainant-society during the cross-examination of the prosecution witnesses and only after recording of statement under Section 313 of Cri.P.C. of the accused. As such, the observations of the trial Court were unwarranted and in fact, perverse in nature when taking of the loan of Rs.1,00,000/- by the respondent-accused was accepted as mentioned earlier.

13. Lastly, during the argument, learned Advocate for the respondent-accused has invited attention of this Court towards the factual position that the payee in the concerned cheque is named as, "Vishal Nagari Bigar Sheti Sahakari Pat Sanstha Maryadit, Tq. Kamthee (Gramin), Chhindawada Road, Mahadula, distt. Nagpur", whereas, the complaint is filed by "Vishal Nagari Sahakari Pat Sanstha Maryadit, Koradi". Considering the entire cross-examination of the witnesses of the complainant-society and the statement of respondent-accused under Section 313 Cri.P.C., nowhere this defence is spelt out much less agitated before the trial Court. As such, at this stage, this defence cannot be sustained. This is more so in view of the specific averements in the complaint itself in para No.1 giving the registration number of the said society and having a new name as appearing in the cause title of the complaint having the same address as that is mentioned in the rubber stamp which is affixed at the place of the "payee" in the concerned cheque. All the same, the circumstances do warrant interference in the impugned judgment and order and it must be said that the trial Court had erred in appreciating the evidence in proper perspective thus accepting the defence of the respondent-accused that the cheque was not given for any liability. Hence, there is substance in the present appeal and the same is allowed.

14. At this stage when the Court reached to the conclusion as to finding the respondent-accused guilty of the offence punishable under Section 138 of the Negotiable Instrumnents Act, rival arguments are heard on the point of quantum of punishment to be inflicted, substantive as well as fine. On this aspect the learned Advocate for the appellant-original complainant submitted that the conduct of the present respondent-accused must be seen as denial of loan at all from the complainant-society. Moreover, raising a false defence as to giving of cheque as and by way of alleged guarantor to the loan of his brother. It is further submitted on behalf of the appellant that the punishment adequate to deter the person of such a status would be necessary to be inflicted. Counter to this arguments, learned Advocate for the respondent-accused submitted that the respondent-accused is running a tea stall/hotel and is the only earner in the family and having school going kids and his wife at home to be maintained on his income. So also he has to maintain his aged parents.

15. Considering the rival submission and considering the nature of the offence as to bouncing of the cheque, it would be in the fitness of the situation to have a token substantive sentence and fine to the extent of twice the amount of the dishonoured cheque and in the considered opinion of this Court, this sentence will meet the ends of justice as otherwise by sending the respondent-accused behind the bar for substantial period would not be even in the interest of the complainant-society. The complainant-society could be very well compensated by awarding the compensation to the extent of the fine amount imposed on the respondent-accused.

16. In the result, The impugned judgment and order dated 30/4/2009 passed in Summary Criminal Complaint No. 327 of 2007 is quashed and set aside. The respondent-accused is convicted of the offence punishable under Section 138 of the Negotiable Instruments Act and sentenced to imprisonment till rising of the Court today and to pay fine twice the amount of dishonoured cheque in the present matter.

Upon request on behalf of the respondent-accused, four weeks' time is granted to deposit the entire fine amount which is equivalent to the twice of the amount of cheque or otherwise necessary execution proceedings shall be initiated.

On deposit/recovery of the fine amount, the same shall be given to the complainant-society towards compensation.

Ordered accordingly.