IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA Cr.Revision No.33 of 2011. Date of decision: 14.06.2011. Pankaj Chowfla … …Petitioner Versus Smt.Asha Kumari and Another … …Respondent Coram The Hon’ble Mr.Justice Dev Darshan Sud,J. Whether approved for reporting ?1 No. For the Petitioner: Mr.V.S. Chauhan, Advocate. For Respondent No.2: Mr.P.K. Sharma, Additional Advocate General with Ms.Shubh Mahajan, Deputy Advocate General. Dev Darshan Sud,J. This revision petition is directed against the order of the learned Sessions Judge, Chamba, dismissing the appeal preferred by the petitioner herein who was the accused before the two Courts below and has been convicted for offences under Section 138 of the Negotiable Instruments Act and sentenced to undergo simple imprisonment for one year and a fine of Rs.five lacs. A further direction was issued that if the fine amount is deposited, 50% will be paid to the complainant as compensation. In default of payment of fine, the accused was directed to undergo simple imprisonment for three months. 1 Whether the reporters of Local Papers may be allowed to see the judgement? Yes. 2 2. The brief facts of the case are that late Raj Kumar Brijendra Singh son of late Raja Laxman Singh had advanced a loan of Rs.1,00,000/- on 16.11.2005 and Rs.1,50,000/- on 1.12.2005 to the petitioner and two promissory notes Ex.CW-2/A and Ex.CW-2/B were executed, which promissory notes were handwritten by the accused in the presence of two witnesses, namely; Mahinder Singh and Vinoj Kumar on 16.11.2005 and 1.12.2005 respectively. To discharge its liability, the petitioner issued two bearer cheques Ex.PW-5/C for Rs.1,00,000/- and Ex.PW-5/B for Rs.1,50,000/- in the name of late Raj Kumar Brijendra Singh. He died on 16.4.2006 which fact was proved by death certificate Ex.P-5. The legal heirs certificate Ex.CW-1/C was proved on the record and the cheques were presented by the complainant for encashment. By Ex.CW-1/A the respondent was informed that the payment had been stopped. Legal notice Ex.P-9, receipt Ex.P-10 and reply Ex.P-11 thereto also proved on the record. The complainant examined herself as CW-1 and stated that a sum of Rs.2,50,000/- had been advanced to the accused by virtue of two promissory notes stated hereinabove. She also stated that two post dated cheques of 30.12.2005 and 30.5.2006 were issued by the petitioner to discharge his liability. Her husband died on 16.4.2006 and on 16.6.2006 she being the authorized legal heir presented the cheques which were dishonoured and thereafter notice was issued. CW-2 Mahinder Singh testified that the promissory note Ex.CW-1/A for 3 Rs.1,00,000/- was executed by the petitioner herein in his presence and he has signed the same as one of the witness. On 1.12.2005, another promissory note for Rs.1,50,000/- Ex.CW-1/B was issued and he has signed as one of the attesting witness. These notes were scribed by the petitioner herein himself. He also proves that two cheques for Rs.1,00,000/- and Rs.1,50,000/- were issued by the petitioner in order to cover the loan account. CW-3 Vinoj Kumar also corroborated the evidence of CW-2 Mahinder Singh. CW-4 Vias Dev, Clerk of Punjab National Bank, Chamba, proved Ex.PW-4/A vide which the cheques were returned with the memo. CW-5 Kartar Chand, Branch Manager, Central Bank of India, Chamba, stated that memo Ex.CW-5/A and cheques Ex.CW- 5/B and Ex.CW-5/C were returned as drawer had stopped payment. The petitioner examined himself as DW-1 and produced statements of accounts Ex.DW-1/A. In cross- examination he has categorically admitted both the promissory notes Ex.CW-1/A and Ex.CW-1/B and stated that cheques Ex.CW-5/B and Ex.CW-5/C were issued by him in favour of the husband of the complainant. He states that he did not issue any notice regarding stopping the payment. Volunteered, that he had telephonically informed him on 28.12.2005. The statement was disbelieved because his testimony was at variance with the documents on record. The complainant, respondent herein, and her daughter Ravi Nandini were the only legal heirs of late Rajkumar Brijendra Singh and she 4 also holds the General Power of Attorney on behalf of her daughter. 3. Being dissatisfied from the judgment and sentence imposed by the learned trial Court, an appeal was preferred before the learned Sessions Judge. It was submitted before me that it is not proved as to whether late husband of the petitioner had funds sufficient to advance the loan. The learned appellate Court held that it was admitted that promissory notes Ex.P-1 and Ex.P-2 and cheques Ex.P-3 (Ex.PW-5/B) for Rs.1,50,000/- and Ex.P-4 (Ex.PW-5/C) for Rs.1,00,000/- have been issued and signed by the petitioner herein himself. The amount was paid to the complainant in the presence of the witnesses CW2 and CW3. The Court also noticed that there was no dispute that they were dishonoured when the same were presented to the bank and the reason advanced was that the petitioner herein himself had stopped the payment. The notices exchanged were also admitted. 4. The defence set out by the petitioner was that he never borrowed any amount from the husband of the complainant. He has given these cheques only for the purpose of `security’. What that security was, remained a mystery on the record of the case. It was contended on behalf of the petitioner that the complainant has not filed any documentary proof in the form of account books, bank account or income tax return etc. to show that the amount had been paid to them and in these circumstances it could not be held 5 that any consideration as passed negativing these contentions. Learned appellate Court holds that CW-2 Mohinder Singh and CW-3 Vinod Kumar who proved the advancement of the loan, execution of the promissory notes as also the issuance of the cheques and the payment of the money to the petitioner. Their evidence could not be disbelieved as their testimony had remained un-rebutted and their cross examination did not detract from the truth. Another question raised was that the respondent could never be treated as holder in due course, which submission was also rejected by the learned appellate Court. The petitioner now urges that both the Courts below were not correct in arriving at the conclusion of the guilty of the offence and that the complaint was not maintainable and that consideration was not proved. It is also urged that if the transaction is for more than Rs.20,000/- the complainant is required to produce his income return to prove as to whether the amount has been so mentioned in the income tax return or not. 5. Adverting to the first submission, regarding the maintainability of the complaint, in Smt.Bhagava vs. M/s.Sri Kadasiddeshwara Trading Company and Another, 2004(1) Crimes 701, the High Court of Kerala holds:- “12. Having regard to the factual aspects and the settled principles of law in this regard, in the opinion of this Court, on the death of the payee, his legal heirs steps into the shoes of the payee for all practical 6 purposes and such a person can also file and prosecute the complaint after completing the legal formalities. It is also necessary to mention that it would be incumbent upon the Complainant to prove that the Complainant is the legal representative of the deceased payee, in the event of accused disputing the same. In the case on hand, the payee held died and the wife of the payee, as the legal heir, had presented the cheque in question and on the cheque being dishonoured legal notice had also been issued and thereafter, the proceedings had been initiated under Section 138 of the NI Act.” (p.704) 6. On the other aspect of the matter, as to the passing of the consideration, the issuance of cheques etc., I find that the evidence of the two witnesses CW- 2 Mohinder Singh and CW-3 Vinoj Kumar has not in any manner been rebutted since they proved three facts; (a) execution and writing of the promissory notes by the petitioner himself, (b) passing of consideration in their presence to the petitioner, (c) writing of the cheques to be paid for returning of the loan amount borrowed from late husband of the complainant. In these circumstances, it cannot be held that no consideration has passed. On the aspect of income tax returns and the amount not being shown in income tax, all that I need say is that violation of the provisions of the 7 Income Tax Act for advancing loan is a matter to be determined by the Income Tax Authorities and not by the petitioner who has urged a stand untenable in law, namely; that he did not take the amount from the husband of the complainant. 7. I, therefore, find no merit in this revision petition which is accordingly rejected. 8. On the aspect of the sentencing, I hold that instead of passing sentence of imprisonment, the respondent should be compensated in terms of money. In case a sum of Rs.3,50,000/- is paid by the petitioner herein as compensation to the respondent within a period of six months from today, the sentence of imprisonment is set aside, failing which the sentence of imprisonment shall revive and shall be executed duly in accordance with law. I have increased the amount of compensation for the reason that the petitioner has used the money, subject matter of the negotiable instrument, for a period of six years without paying any interest to the respondent and had dragged the respondent to two Courts in protracted litigation. June 14, 2011 (Dev Darshan Sud) (aks) Judge.