RAMDAS S/O KHELUNAIKversusKRISHNANAND S/O VISHNU NAIK.

                    [2014] 8 S.C.R. 941


                RAMDAS S/O KHELUNAIK                             A
                              v.
            KRISHNANAND S/O VISHNU NAIK.
            (Criminal Appeal No.1522 of 2014)
                       JULY 23, 2014
                                                                 B
 [RANJANA PRAKASH DESAI AND N.V. RAMANA, JJ.]

      Negotiable Instruments Act, 1881 - s. 138 - Dishonour
 of cheque - On the ground of stop payment instruction by
 drawer of cheque - Complaint - Dismissed by trial court.        C
 acquitting the accused-drawer of cheque - High Court
 convicted the accused - On appeal, held: The complainant
 failed to prove his case that the cheque for Rs. 5 lakhs was
 against hand-loan of Rs. 1 lakh seventy five thousand - While
 the accused proved that the cheque was drawn in relation to     D
·sale agreement with the complainant and the payment thereof
 was instructed to be stopped on failure of execution of sale
 agreement - Accused acquitted.

    A cheques for Rs. 5 lakhs issued by the appellant-           E
accused, in favour of the respondent was dishonoured
by the Bank on the ground of 'Stop payment' instruction
issued by the appellant. Thereupon, the respondent filed
complaint u/s. 138 of Negotiable Instruments Act. The
case of the complainant-respondent was that he had
given a hand-loan of Rs. 1 lakh 75 thousand to the               F
appellant, the appellant had drawn the cheques for Rs. 5
lakhs to discharge that liability. The case of the appellant
was that he had entered into agreement with the
complainant with regard to purchase of land for a total
consideration of Rs. 10 lakhs and for that purpose a cash        G
of Rs. 30,000/- and the cheque for Rs. 5 lakhs was handed
over; and that he instructed the Bank to stop the
payment, when the complainant failed to execute the sale

                             941                                 H
    942       SUPREME COURT REPORTS            [2014] 8 S.C.R.


A agreement. Trial court dismissed the complaint and
  acquitted the appellant. In appeal, High Court found the
  appellant guilty and imposed sentence of fine of Rs.
  8,50,000/- with default clause. Hence the present appeal.

          Allowing the appeal, the Court
B
         HELD: 1. The Cheque in question was for
    Rs.5,00,000/- and all the way the stand of the complainant
    was that he had given a hand loan of Rs.1,75,000/- to the
    accused-appellant. There is no material on record in
C   support of the claim of the complainant giving hand loan
    to the accused-appellant. There was also no calculation
    of account or stipulation of any interest on the alleged
    loan amount to show as to how the amount of
    Rs.5,00,000/- was figured, in return of a hand loan of
D   Rs.1, 75,000/-, if at all taken by the appellant from the
    complainant. It is also not on record whether there was
    sufficient balance amount or not in the bank account of
    the accused when the Cheque was dishonoured by the
    Bank. In the absence of any authenticated and
E   supporting evidence, the Court cannot believe that the
    complainant-respondent who is employed under the
    appellant-accused, has raised an amount of Rs.1,75,000/
    • that too by obtaining loan of Rs.1,50,000/- from a Bank,
    only to give hand loan to his employer. As the
F   complainant himself admitted that his net savings in a
    year comes to about Rs. 10,000/-, it is not trustworthy that
    he was in a position to extend hand loan of such big
    amount to the appellant. [Para 9) [946-G-H; 947-A-D]

       2. On the other hand, the evidence of D.W. 2 fully
G corroborates the version of the appellant. He deposed
  that the talks of sale/purchase of 3 acres of land were
  held between the parties in his presence. The
  complainant has not rebutted the evidence of D.W. 2 in
  the cross examination. Further, the firm and unshaken
H
   RAMDAS S/O KHELUNAIK v. KRISHNANAND S/O                 943
                VISHNU NAIK

 evidence of OW6, a member of the Bar Association (O.W.           A
 6) also corroborated the sale purchase deal between the
 parties. It is evident from the record that (OW 6) has
 clearly and categorically deposed that the appella.nt
 stated to him about four years back that he had entered
 into an agreement with the complainant in presence of            B
 OW 2 to purchase 3 acres of land belonging to the
 complainant and also paid Rs.30,000/- in cash as advance
 money and issued a Cheque for Rs.5,00,000/-. Looking
 at the corroborative evidence adduced by the defence
 witnesses and more particularly, in the absence of any           c
 material evidence in support of the claim of the
 respondent-complainant, the impugned judgment cannot
 be upheld. [Para 10] (947-E-H; 948-A-B]

    CRIMINAL APPELLATE JURISDICTION : CRIMINAL
 APPEAL NO. 1522 of 2014.                                         D

     From the Judgment and Order dated 22.08.2012 in CRLA
 No. 832/2007 of the High Court of Karnataka Circuit Bench at
 Dharwad.
                                                                  E
     Manjunath Meled, Anil Kumar for the Appellant.

     Anish Kumar Gupta, Deep Shikha Bharati, R.D. Gupta for
 the Respondent.

     The Judgment of the Court was delivered by                   F
     N.V. RAMANA, J. 1. Leave granted.

      2. This appeal by special leave arises ,out of Judgment
/dated 22nd August, 2012 passed by the High Court of
 Karnataka, Circuit Bench at Dharwad, in Criminal Appeal No.      G
 832 of 2007 whereby the High Court set aside the Judgment
 and Order of the J.M.F.C. (II-Court), Karwar acquitting the
 appellant herein of the offence punishable under Section 138
 of the Negotiable Instruments Act, 1881 (for short 'the Act').
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    944      SUPREME COURT REPORTS                 [2014] 8 S.C.R.


A      3. The facts leading to this appeal, in a nutshell, are that a
  Cheque for Rs.5,00,000/- issued by the appellant in favour of
  the respondent was dishonoured by the Bank when it was
  presented for realization by the respondent, as the appellant
  had instructed the Bank to stop the payment. After receiving
B such information from the Bank, the respondent served a legal
  notice calling upon the appellant to pay the Cheque amount.
  Upon failure of the respondent to obey the legal notice
  warranting him to pay the Cheque amount of Rs.5,00,000/-, the
  respondent filed Complaint Case against the appellant for the
c offence punishable under Section 138 of the Act. The Judicial
  Magistrate (First Class), Karwar took cognizance of the
  offence, recorded statement of the complainant under oath,
  registered the case and summoned the accused-appellant. The
  appellant pleaded not guilty and claimed trial.
D       4. Before the Trial Court, the complainant-respondent solely
  led his own evidence as P.W. 1., whereas the appellant-
  accused in his defence led evidence of six witnesses. The case
  of the complainant was that he had given a hand loan of
  Rs.1,50,000/- to the accused-appellant and three and half years
E thereafter he had again given Rs.25,000/- as hand loan, thus
  in all, the accused-appellant owed him Rs. 1,75,000/- and to
  discharge this liability the cheque for Rs.5,00,000/- was drawn,
  but the same stood dishonoured at the instructions of the
  accused-appellant. Whereas, the case of the appellant before
F the Trial Court was that he had entered into an agreement with
  the complainant to purchase 3 acres of land belonging to the
  complainant for a total consideration of Rs.10,00,000/- and for
  that purpose, an advance of Rs.30,000/- in cash was paid and
  the Cheque in question for Rs.5,00,000/- was handed over to
G the complainant in presence of B.S. Pai (OW 2). When the
  complainant failed to execute the sale agreement and not even
  willing to return the advance amount of Rs.30,000/- and the
  Cheque of Rs.5,00,000/-, he had to instruct the Bank to stop
  payment against the said Cheque.
H
  RAMDAS S/O KHELUNAIK v. KRISHNANAND S/O                    945
        VISHNU NAIK. [N.V. RAMANA, J.]
     5. The Trial Court, taking note of financial condition of the   A
complainant who was working under the accused, observed
that the complainant has failed to lead any evidence to
corroborate his version that the Cheque issued by the appellant
was to discharge the liability towards the complainant. Keeping
in mind the corroborative and unshaken defence version, the          8
Trial Court found fault with the complainant-respondent and
observed that instead of executing an agreement to sell and
instead of repaying the advance money and returning the
Cheque, a false complaint was filed by the complainant-
respondent against the accused-appellant. The Trial Court,           C
therefore, dismissed the complaint and acquitted the accused-
appellant of the offence.

      6. Against the judgment of the Trial Court dismissing the
Complaint and acquitting the accused, the complainant
preferred Criminal Appeal before the High Court. The High            D
Court while allowing the appeal, set aside the judgment of the
Trial Court and sentenced the appellant-accused to pay a fine
of Rs.8,50,000/- within a period of eight weeks, failing which,
to suffer simple imprisonment for a period of six months.
Aggrieved by the .reversal of his acquittal, the appellant-          E
accused filed the present appeal.

      7. Learned counsel for the appellant-accused contended
that the Cheque in question was in fact issued as part payment
of the agreed sale/purchase of 3 acres of land belonging to the
                                                                     F
complainant for a total consideration of Rs.10,00,000/-, out of
which an initial amount of Rs.30,000/- was also paid by the
appellant in cash and the complainant was supposed to
execute a written sale agreement. As the complainant had not
come forward for giving finality to the commitment by execution      G
of written Sale Agreement and even denied to return the
advance payment qf Rs.30,000/- and the Cheque in question,
the appellant had no option but to request his banker to not
honour the Cheque. The complainant mischievously cooked up
the story of giving hand loan to the appellant which the Trial
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    946       SUPREME COURT REPORTS                 [2014] 8 S.C.R.


A   Court had rightly disbelieved and dismissed the complaint.
    Although the complainant-respondent miserably failed to
    establish the fabricated story of giving hand loan to the appellant
    with any reliable evidence, the High Court took an erroneous
    view and wrongly set aside the judgment of the Trial Court and
8   sentenced the appellant under Section 138 of the Act. Learned
    counsel, therefore, submitted that the impugned order is not
    justified and the same deserves to be set aside.

        8. On the other hand, learned counsel for the respondent-
  complainant submitted that there was no error in the impugned
C judgment and the High Court has rightly allowed the appeal of
  the complainant. The complainant had raised a sum of
  Rs.1,50,000/- by obtaining loan from Akshya Bank to extend
  hand loan to the accused-appellant and 3% years thereafter, a
  further sum of Rs.25,000/- was also given and the Cheque for
D Rs.5,00,000/- was meant for the total repayment of the
  advanced amount of Rs.1,75,000/-. He further submitted that
  there was no transaction of sale/purchase of land between the
  parties and the accused wanted to avoid repayment of the hand
   loan, in the process of which he instructed the banker not to
E pass the Cheque. The High Court has, therefore, correctly dealt
  with the matter and rightly sentenced the accused who, knowing
  fully the eventuality of the offence, committed the same
  deliberately. Hence the learned cou·nsel prayed that the appeal
   lacks merit and the same deserves to be dismissed.
F
       9. We have heard rival contentions of the learned counsel
  at length. We find frorn the record that admittedly, the accused
  appellant deals with sale and purchase of landed properties and
  the respondent-complainant works as a Lorry Driver under him
  with a salary of Rs.2,500/- p.m. and Rs.20/- per day towards
G miscellaneous expenses (bhatta). Admittedly, the Cheque in
  question was for Rs.5,00,000/- and all the way the stand of the
  complainant was that he had given a hand loan of Rs.1,75,000/
  - to the accused-appellant. We find no material on record in
  support of the claim of the complainant giving hand loan to the
H
  RAMDAS S/O KHELUNAIK v. KRISHNANAND S/O                       947
        VISHNU NAIK. [N.V. RAMANA, J.]

accused-appellant. There was also no calculation of account            A
or stipulation of any interest on the alleged loan amount to show
as to how the amount of Rs.5,00,000/- was figured, in return of
a hand loan of Rs.1, 75,000/-, if at all taken by the appellant from
the complainant. It is also not on record whether there was
sufficient balance amount or not in the bank account of the            B
accused when the Cheque was dishonoured by the Bank. The
complainant himself stated in the cross-examination that after
the Cheque was returned without payment, he has not made
any enquiry with the Bank as to whether sufficient funds were
available or not in the account of the accused. In the absence         c
of any authenticated and supporting evidence, we cannot
believe that the complainant-respondent who is employed
under the appellant-accused, has raised an amount of
Rs.1,75,000/- that too by obtaining loan of Rs.1,50,000/- from
a Bank, only to give hand loan to his employer. As the                 D
complainant himself admitted that his net savings in a year
comes to about Rs. 10,000/-, it is not trustworthy that he was
in a position to extend hand loan of such big amount to the
appellant.

     10. Whereas, the evidence of Mr. S.S. Pai (D.W. 2) fully          E
corroborates the version of the appellant. He deposed that the
talks of sale/purchase of 3 acres of land were held between
the parties in his presence. The appellant agreed to purchase
3 acres of land belonging to the complainant and the appellant
had paid an amount of Rs.30,000/- as advance and handed                F
over a Cheque for Rs.5,00,000/- . It is also noteworthy that •ne
complainant has not rebutted the evidence of D.W. 2 in the
cross examination. Further, the firm and unshaken evidence of
Mr. D.R. Bhat, a member of the Karwar Bar Association (O.W.
6) also corroborates the sale purchase deal between the                G
parties. [t is evident from the record that OW 6 has clearly and
categorically deposed that the appellant stated to him about
four years back that he had entered into an agreement with the
complainant in presence of S.S. Pai (DW 2) to purchase 3
acres of land belonging to the complainant and also paid               H
    948        SUPREME COURT REPORTS              [2014] 8 S.C.R.


A   Rs.30,000/- in cash as advance money and issued a Cheque
    for Rs.5,00,000/-. Looking at the corroborative evidence
    adduced by the defence witnesses and more particularly, in the
    absence of any material evidence in support of the claim of the
    respondent-complainant, we cannot uphold the impugned
B   judgment.

         11. For all the aforesaid reasons, the appeal deserves to
    be allowed and is accordingly allowed. The impugned judgment
    of the High Court is set aside and the judgment of the Trial
    Court is restored. The appellant is at liberty to withdraw the
C   amount of Rs.1, 75,000/- with &ccrued interest if any, deposited
    by him before the Trial Court in accordance with this Court's
    order dated 30th November, 2012.

    Kalpana K. Tripathy                               Appeal allowed