REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 2402 OF 2014
K. Subramani Vs K. Damodara Naidu
Citation;2015ALLMR(Cri)789, (2015)1SCC99,
C. NAGAPPAN, J.
1. Leave granted.
2. This appeal is preferred against judgment and order
dated 10.10.2013 passed by the High Court of Karnataka at
Bangalore in Criminal Appeal No.368 of 2009
wherein the
High Court set aside the judgment of acquittal of the trial
court and remanded the case to the trial court for retrial.
2
3.
The
respondent
appellant/accused
were
herein/complainant
working
as
Government College at Bangalore.
and
lecturers
the
in
a
The case of the
complainant is that the accused borrowed a loan of Rs.14
lakhs in cash on 1.12.1997 from him to start granite
business, promising to repay the same with 3% interest per
month on demand and issued post-dated cheque dated
30.11.2000 for sum of Rs.29,12,000/- which included
principal and interest and few days prior to presentation of
the cheque on its due date to bank for encashment, the
accused requested him not to present the cheque and took
extension of time of another three years for repayment and
finally issued a cheque dated 16.08.2005 for a sum of
Rs.73,83,552/- which included principal and interest. The
complainant
presented
the
cheque
on
19.8.2005
for
encashment to his banker and it was dishonored with an
endorsement ‘fund insufficient’ and the complainant issued
legal notice on 12.9.2005 demanding repayment within 15
days from the date of its receipt thereof and accused sent
reply but failed to comply with the demand and the
complainant lodged complaint under Section 138 of the
Negotiable Instrument Act, against the accused.
4.
In the trial the complainant examined himself as PW1
and examined
CWs1 and 2 on his side and marked
documents Exh. P1 to P23. The accused examined himself
as DW1 and marked documents Exhs. D1 to D5. The trial
court held that the complainant had no source of income to
lend a sum of Rs.14 lakhs to the accused and he failed to
prove that there is legally recoverable debt payable by the
accused to him and that in discharge of said liability he
issued the cheque and accordingly acquitted the accused for
the alleged offence under Section 138 of N.I. Act. Aggrieved
by the same the complainant preferred appeal in the High
Court in Criminal Appeal No.368 of 2009, and the High
Court heard the appeal along with 9 other appeals by
framing two legal issues which are as under:
“ i) Whether an action under Section 138 of the
N.I.
Act
for
dishonor
of
cheque
is
the
complainant required to establish his financial
capacity to lend money?
ii) Will not presumption under Section 139 of
the N.I. Act accrues to the benefit of the
complainant unless the accused rebuts that
presumption?”
5.
Relying on the ratio laid down by this Court in the
decision in Rangappa vs. Sri Mohan [(2010) 11 SCC 441]
the High Court answered the first issue in the negative and
the second issue in the affirmative. It further held that the
orders of acquittal recorded by the trial court in all the
appeals
suffer from legal infirmity as the prosecution has
been undone only on the ground that complainant had not
proved his capacity to lend money and hence those orders
are liable to be set aside. Accordingly it allowed the appeals
and set aside the respective judgments of acquittal and
remanded the cases to courts concerned directing retrial.
The present appeal is preferred challenging the said
judgment.
6.
The
learned
appellant/respondent
counsel
contended
appearing
that
the
for
the
High
Court
erroneously clubbed a batch of 10 criminal appeals
and
formulated two questions of law and insofar as the present
appeal is concerned the trial court never proceeded on the
assumption that the presumption under Section 139 of the
N.I. Act would enure to the benefit of the complainant only if
he proves his financial capacity and on the contrary the trial
court had for reasons recorded found that the accused has
rebutted the presumption by placing cogent evidence that
there was no legally recoverable debt or liability and the
complainant had no capacity to lend huge amount of Rs.14
lakhs
and,
accordingly,
dismissed
the
complaint
by
acquitting the accused. It is his further contention that the
High Court without going into the merits proceeded to
remand the present case to the trial court for being retried
and it has caused great prejudice to the appellant herein and
hence the impugned judgment is liable to be set aside.
7.
Learned
counsel
for
the
respondent/complainant
submitted that the High Court answered the legal issues
involved and has remanded the case to the trial court for
fresh consideration and no exception can be taken to the
impugned judgment.
8.
Three Judge Bench of this Court in the decision in
Rangappa case (supra) laid down that the presumption
mandated by Section 139 of the N.I. Act includes a
presumption that there exists a legally enforceable debt or
liability and that is a rebuttable presumption and it is open
to the accused to raise a defence wherein the existence of a
legally enforceable debt or liability can be contested. Relying
on the said ratio the High Court answered the two legal
issues raised by it in the impugned judgment. Though the
criminal appeals were preferred against the judgment of
acquittal passed in all the cases arising under Section 138 of
the N.I. Act, the factual matrix and the evidence adduced
were different. The High Court after answering the two legal
issues did not consider the merits of each case individually
and has simply remanded the matter to the trial court for
fresh consideration.
9.
In the present case the complainant and the accused
were working as Lecturers in a Government college at the
relevant time and the alleged loan of Rs.14 lakhs is claimed
to have been paid by cash and it is disputed.
Both
of
them were governed by the Government Servants’ Conduct
Rules which prescribes the mode of lending and borrowing.
There is nothing on record to show that the prescribed mode
was followed. The source claimed by the complainant is
savings from his salary and an amount of Rs.5 lakhs derived
by him from sale of site No.45 belonging to him. Neither in
the
complaint
nor
in
the
chief-examination
of
the
complainant, there is any averment with regard to the sale
price of site No.45. The concerned sale deed was also not
produced. Though the complainant was an income-tax
assessee he had admitted in his evidence that he had not
shown the sale of site No.45 in his income-tax return. On the
contrary the complainant has admitted in his evidence that
in the year 1997 he had obtained a loan of Rs.1,49,205/-
from L.I.C. It is pertinent to note that the alleged loan of
Rs.14 lakhs is claimed to have been disbursed in the year
1997 to the accused. Further the complainant did not
produce bank statement to substantiate his claim. The trial
court took into account the testimony of the wife of the
complaint in another criminal case arising under Section
138 of the N.I. Act in which she has stated that the present
appellant/accused had not taken any loan from her
husband.
On
a
consideration
of
entire
oral
and
documentary evidence the trial court came to the conclusion
that the complainant had no source of income to lend a sum
of Rs.14 lakhs to the accused and he failed to prove that
there is legally recoverable debt payable by the accused to
him.
10.
In our view the said conclusion of the trial court has
been arrived at on proper appreciation of material evidence
on record. The impugned judgment of remand made by the
High Court in this case is unsustainable and liable to be set
aside.
11.
In the result this appeal is allowed and the impugned
judgment insofar as the appellant is concerned is set aside
and the judgment of acquittal passed by the trial court is
restored.
..................................J.
(V. Gopala Gowda)
.................................J.
(C. Nagappan)
New Delhi;
November 13, 2014
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