Triyambak S.Hegde vs Sripad on 23 September, 2021


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Supreme Court of India

Triyambak S.Hegde vs Sripad on 23 September, 2021

Author: A.S. Bopanna

Bench: M.R. Shah, A.S. Bopanna

                                                                  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)



                                               JUDGMENT

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

Signature Not Verified by the respondent herein. The Criminal Revision Petition
Digitally signed by R
Natarajan
Date: 2021.09.23

No.1481/2006 filed by the appellant herein has been
16:33:11 IST
Reason:

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.

2. The case of the appellant is that the respondent who

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’.

3. The appellant therefore got issued a notice informing

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.

4. The respondent herein claiming to be aggrieved by the

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.

5. We have heard Mr. Rajesh Inamdar, learned counsel

for the appellant, Mr. G.V. Chandrasekar, learned counsel

for the respondent and perused the appeal papers.

6. Before the learned Magistrate, the appellant had

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

7. In that background, the learned JMFC on taking note

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

8. The learned Single Judge having accepted the said

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.

9. Mr. Rajesh Inamdar, the learned counsel appearing on

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.

10. Mr. G.V. Chandrasekar, the learned counsel for the

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

11. From the facts arising in this case and the nature of

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: ­

“139. Presumption in favour of holder­ It shall be
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.”

12. Insofar as the payment of the amount by the appellant

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: ­

“9. As the signature in the cheque is admitted to be that
of the accused, the presumption envisaged in Section
118
of the Act can legally be inferred that the cheque was
made or drawn for consideration on the date which the
cheque bears. Section 139 of the Act enjoins on the Court
to presume that the holder of the cheque received it for
the discharge of any debt or liability. The burden was on
the accused to rebut the aforesaid presumption. The Trial
Court was not persuaded to rely on the interested
testimony of DW­1 to rebut the presumption. The said
finding was upheld by the High Court. It is not now open
to the accused to contend differently on that aspect.”

14. The learned counsel for the respondent has however

referred to the decision of this Court in Basalingappa vs.

Mudibasappa (2019) 5 SCC 418 wherein it is held as

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:

25.1. Once the execution of cheque is
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.

16. On the position of law, the provisions referred to in

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.

19. Further, though the respondent had put forth the

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.

20. Further, the story as put forth apart from being an

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

Kaushalya Devi Massand vs. Roopkishore Khore (2011) 4

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



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