On hearing the learned counsel for the parties and on evaluating the material on record, I find that there is no illegality committed by the Trial Court, which calls for interference. It is to be seen that the cheque was not issued by the accused - respondent towards a legally recoverable debt. It was issued as a security for the loan which he had borrowed from the complainant. This is further fortified by the judgment relied on by the counsel for the appellant himself in Sampelly Satyanarayana Rao (supra), which reads that,
“If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.”
In the High Court of Karnataka at Bengaluru
(Before K. Somashekar, J.)
Branch Manager, PCA & RD Bank Ltd., Belthangady,
v.
Suresh Das
Criminal Appeal No. 425 of 2010
Decided on February 27, 2018
Citation: 2018 SCC OnLine Kar 492
The Judgment of the Court was delivered by
K. Somashekar, J.:— This appeal is directed against the judgment passed by the Civil Judge (Jr. Dn) & JMFC, Belthangady, D.K. in C.C. No. 809/2006 acquitting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘the NI Act’, for brevity). The same is questioned in this appeal urging various grounds.
2. The factual matrix of the appeal are as under:
3. The complainant - Bank had filed a complaint under Section 200 Cr.P.C. against the accused alleging that the accused had issued a cheque bearing No. 0454037 dated 4.12.2004 for a sum of Rs. 60,200/- for a lawful consideration received from the Bank. However, when the said cheque was presented for collection, that the same was returned with an endorsement ‘insufficient funds’ in the account. Since the cheque issued by the accused was dishonoured, the complainant - Bank had issued a notice on 20.12.2004. However, in spite of service of notice, the accused failed to pay the cheque amount nor had replied to the said notice. Subsequently, the complainant-Bank initiated proceedings under Section 200 Cr.P.C. for an offence under Section 138 of the NI Act for dishonour of cheque. The complaint was filed on 1.2.2005. On receipt of complaint, the Trial Court took cognizance of the offence under Section 138 of the NI Act and after recording the sworn statement, of the complainant, had issue process against the accused. The accused had appeared through counsel and obtained bail. The case was proceeded against the accused and his plea was recorded, wherein the accused pleaded not guilty and claimed to be tried. The complainant - Bank Manager was examined as PW-1 and several documents were got marked, namely Exhibits P-1 to P-6. Subsequent to the closure of the evidence of the complainant, statement of the accused as required under Section 313 Cr.P.C. was recorded, wherein the accused denied the truth of the evidence of the complainant. The accused did not come forward to adduce any defence evidence. Subsequently, the Trial Court, on hearing the arguments advanced by the learned counsel for both the parties, had framed the points that arose for its consideration and answered point No. 1 in the negative and point No. 2 as per the final order and thereby acquitted the accused. It is this acquittal judgment which is called in question in the present appeal.
4. Heard the learned counsel for the appellant and the learned counsel for the respondent.
5. The learned counsel for the appellant contends that the court below had committed an error in holding that there was no liability existing at the time of issuing the cheque. Exhibit P-1 the blank cheque was given as security by the accused as a debtor while availing loan from the complainant - Bank, authorizing the Bank to use the cheque to make good the repayment of loan, on default on his part. He submits that the concept of non-existence of cash transaction at the time of issuance of cheque, was an erroneous finding by the Trial Court.
6. Further, if the cheque issued as security to the loan transaction cannot be used towards collection of the debt due from the debtor, the purpose of taking a blank cheque as security towards the loan which was being advanced would itself be meaningless. The transaction was in fact a loan transaction and the same was also not denied by the accused. When such being the case, non-production of documents relating to the loan transaction should not have resulted in dismissal of the complaint filed by the complainant. Further, it is contended that the interpretation of the court below that the cheque was issued towards future liability was a wrong presumption and that in fact it was issued towards a present transaction. The further observation of the court below that the present manager PW-1 did not know anything about the loan transaction was also wrong, since though he was not the manager at the time of the loan transaction, he could very well depose on the basis of the documents of the loan transaction, in the capacity of the Manager of the bank.
7. In support of his submissions, the learned counsel places reliance on a judgment of the Apex Court in the case of Sampelly Satyanarayana Rao v. Indian Renewable Energy Development Agency Limited (Criminal Appeal No. 867 of 2016 arising out of SLP (Crl.) No. 5410 of 2014) decided on 19.09.2016, wherein the relevant paragraph reads as under:
“10. We have given due consideration to the submission advanced on behalf of the appellant as well as the observations of this Court in Indus Airways Private Ltd. v. Magnum Aviation Pvt. Ltd. ((2014) 12 SCC 539), with reference to the explanation to Section 138 of the Act and the expression “for discharge of any debt or other liability” occurring in Section 138 of the Act. We are of the view that the question whether a post-dated cheque is for “discharge of debt or liability” depends on the nature of the transaction. If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.”
8. Hence, on all these grounds, the learned counsel for the appellant prays to set aside the judgment of the Trial Court acquitting the accused and to thereby convict the accused for the offence punishable under Section 138 of the NI Act.
9. On the other hand, the learned counsel for the respondent seeks to justify the impugned judgment passed by the Trial Court and submits that PW-1 in his evidence, has specifically admitted that Exhibit P-1 cheque was given in blank and it was filled up by a clerk of the complainant - Bank. Therefore, it is clear that the cheque Exhibit P-1 was given in blank as a security at the time of availing loan and there was no liability existing at the time of issuance of the cheque. The same has been rightly observed by the court below. PW-1 though was examined on behalf of the complainant - Bank in order to establish the case of the accused, there was no evidence forthcoming and no documents were produced evidencing the loan account details of the accused - respondent. Hence, as on the date of issuing the cheque, there was no legally recoverable debt which was due by the accused to the complainant - Bank. Exhibit P1 was a blank cheque which was issued for the sake of security and it is proved by the evidence of PW-1 the Bank Manager himself, that that it was filled on a later date by a clerk of the Bank. Further, the complainant - Bank had also not produced any account extract relating to the loan account of the accused. Hence, he submits that the impugned order passed by the Trial Court acquitting the accused, does not call for interference by this court.
10. On hearing the learned counsel for the parties and on evaluating the material on record, I find that there is no illegality committed by the Trial Court, which calls for interference. It is to be seen that the cheque was not issued by the accused - respondent towards a legally recoverable debt. It was issued as a security for the loan which he had borrowed from the complainant. This is further fortified by the judgment relied on by the counsel for the appellant himself in Sampelly Satyanarayana Rao (supra), which reads that,
“If on the date of the cheque liability or debt exists or the amount has become legally recoverable, the Section is attracted and not otherwise.”
11. Hence, it is proved that as on the date of issuance of the blank cheque, there was no legal liability of the accused to pay any amount to the complainant, which is evident from the evidence of PW-1 the Manager of the bank himself. Further, the complainant - Bank has also not produced any account extract relating to the loan account of the accused.
12. For the above reasons, I find that there is no infirmity in the judgment of acquittal rendered by the Trial Court. Hence, I am of the opinion that there is no necessity to revisit the impugned judgment. As the appeal is devoid of merits, the same is dismissed. As a consequence, the judgment dated 2.1.2009 passed by the Civil Judge (Jr. Dn) & JMFC, Belthangady, D.K. in C.C. No. 809/2006 is hereby confirmed.
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