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The following judgment of the Hon'ble Supreme Court explains if Can Cheque be given as Security against Loan

 

 

 

2024 INSC 586 Criminal Appeal No.3257 of 2024 @ SLP (Crl.) No.13179 of 2023 

 

 

Page 1 of 28

REPORTABLE

 

IN THE SUPREME COURT OF INDIA

 

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 3257 OF 2024

(@ SLP (CRIMINAL) NO. 13179 OF 2023)

 

SRI DATTATRAYA … APPELLANT

VERSUS

SHARANAPPA … RESPONDENT

 

J U D G M E N T

 

AUGUSTINE GEORGE MASIH, J.

 

1. Leave granted.

 

2. The instant appeal was originally preferred as a petition

before this Court, which is moved against the impugned

Judgment dated 03.03.2023 in Criminal Appeal No.

200139 of 2019 by the High Court of Karnataka at

Kalaburagi whereby the learned Single Judge affirmed

the acquittal of the Respondent in Complaint Case No.

468 of 2014 moved for the offence punishable under

Section 138 of the Negotiable Instruments Act, 1881

(hereinafter referred to as “NI Act 1881”).

 

3. The factual backdrop giving rise to the present challenge

is that the Appellant is the original complainant who

claims to know the sole Respondent for the last six years

and that he had borrowed INR 2,00,000/- (Rupees Two

Lakhs only) from the Appellant on account of family

necessities and accommodation. Against the said loan

the Respondent issued a cheque bearing No. 015639

which was drawn on the Bank of India, as a guarantee

against repayment. He was to repay the said loan

amount within a period of six months thereof. An

agreement to this effect was also signed between the

parties.

 

4. However, since the Respondent failed to repay the loan

despite repeated requests, the Appellant presented the

concerned cheque for encashment on 22.10.2013, but

nevertheless, as per the Bank Memo dated 24.10.2013,

the cheque was dishonoured on account of “insufficient

funds”.

 

5. Aggrieved from the said dishonour of cheque, a Demand

Notice dated 31.10.2013 was sent by the Appellant to

the Respondent, whereby, the Counsel on behalf of the

Appellant alleged that the Respondent had intentionally

cheated him and had not made any efforts to discharge

his liability. Accordingly, the Respondent was said to

have committed offences punishable under Section 138

of the NI Act 1881 and Section 420 of the Indian Penal

Code, 1860 (hereinafter referred to as “IPC 1860”).

 

6. Thereupon, the Respondent moved a Reply Notice dated

11.11.2013 whereby he claimed that the accusations

made by the Appellant are false and bereft of pertinent

details of the loan transaction, inter alia, the date and

time of advancement of the said debt, which as claimed,

was never advanced.

 

7. Unsatisfied with the response of the Respondent

through the said Reply Notice, Appellant moved a Private

Complaint No. 991 of 2013 under Section 200 of the

Code of Criminal Procedure, 1973 (hereinafter referred

to as “CrPC 1973”). The said complaint came to be

registered as CC/468/2014 before Judicial Magistrate

First Class at Gulbarga. As part of the proceedings

before the Trial Court, the Appellant examined himself

as PW-01, while the Respondent examined himself as

DW-01. However, the latter did not mark any documents

from his side. It was the Respondent’s plea that the

concerned cheque was issued in favour of one Mr

Mallikarjun in the year 2012 for security purposes,

however, he did not return the same to the Respondent,

and instead had left the village. While dealing with the

said contention, the Trial Court observed that the

Respondent had failed to explain as to how the cheque

landed in the hands of the Appellant, and for what

purpose was the cheque issued to Mr Mallikarjun.

 

8. It was also revealed as part of the statement during

cross-examination of the Appellant that the cheque was

originally, not given to the Appellant as security cheque.

Instead, the same was allegedly given to the Appellant

after the Respondent had thereby failed to repay his

liability as existing against the Appellant after a period

of six months. The Court further observed that the

Agreement marked by the Appellant to assist his case

does not include signature of the Respondent as against

the terms of the agreement, but a signature is made by

the Respondent on the stamp paper itself, and the same

is not sustainable in the eyes of law. The Court also went

on to scrutinize the Income Tax Returns of the Appellant,

from where it was revealed that the Appellant failed to

declare the alleged loan transaction as part of his

returns to the Income Tax Department. Accordingly, vide

its Judgment dated 18.10.2019, the Trial Court

adjudicated in favour of the Respondent, resultantly

dismissing the complaint moved by the Appellant and

acquitting the Respondent.

 

9. Aggrieved by the decision of Trial Court, the Appellant

moved the High Court of Karnataka in Criminal Appeal

No. 200139 of 2019, which went on to observe that,

admittedly, there was a contradiction in the statement

of the Appellant as to when the cheque was issued in his

favour. Furthermore, as was laid down in the decision

of this Court in Rangappa v. Sri Mohan1, the

1 (2010) 11 SCC 441.

presumption under Section 139 of the NI Act 1881 is a

rebuttable one. The contention of the Respondent as to

the financial capacity of the Appellant to grant a loan in

his favour was to be discharged by him, and being

unable to do so, it shall be presumed that a loan

transaction had not taken place. Accordingly, the

findings of the Trial Court were affirmed in the impugned

Judgment dated 03.03.2023.

 

10. The Appellant has thereupon moved this Court in

challenge to the said impugned judgment on the

grounds that as the signature on the concerned cheque

was admitted by the Respondent, the Appellant was able

to successfully raise a presumption under Section 139

of the NI Act 1881 and as per the submissions of the

Respondent, he had failed to rebut the said

presumption. He also put forth that the reliance on the

decision in Rangappa (supra) by the High Court was

misplaced, and even going by the standard of

preponderance of probabilities, the Respondent failed to

discharge his onus.

11. Having heard the learned Senior Advocate for the

Appellant as well as the learned Counsel on behalf of the

Respondent, it is imperative to deliberate over the

position of law apropos the applicable provisions of the

NI Act 1881, and others, if any.

 

12. Earlier, a case of dishonour of a cheque was dealt

through provisions of Section 420 read with Section 415

of the IPC 1860. To enhance the acceptability of cheques

as well as to provide for adequate safeguards to prevent

harassment of honest drawers through painting the

liability arising out of dishonour of a cheque with a

punitive brush, an amendment to the NI Act 1881 was

brought about by introducing Chapter VIII. Thence,

seeking to promote credibility in transactions through

the medium of banking channels and operations as well

as their efficacy. Section 138 of the NI Act 1881 is

reproduced below as:

 

“138. Dishonour of cheque for insufficiency, etc.,

of funds in the account.

Where any cheque drawn by a person on an account

maintained by him with a banker for payment of any

amount of money to another person from out of that

account for the discharge, in whole or in part, of any

debt or other liability, is returned by the bank unpaid,

either because of the amount of money standing to the

credit of that account is insufficient to honour the

cheque or that it exceeds the amount arranged to be

paid from that account by an agreement made with that

bank, such person shall be deemed to have committed

an offence and shall, without prejudice to any other

provision of this Act, be punished with imprisonment for

a term which may be extended to two years’, or with

fine which may extend to twice the amount of the

cheque, or with both:

 

Provided that nothing contained in this section shall

apply unless-

(a) the cheque has been presented to the bank

within a period of six months from the date on

which it is drawn or within the period of its

validity, whichever is earlier;

 

(b) the payee or the holder in due course of the

cheque, as the case may be, makes a demand for

the payment of the said amount of money by

giving a notice; in writing, to the drawer of the

cheque, within thirty days of the receipt of

information by him from the bank regarding the

return of the cheque as unpaid; and

 

(c) the drawer of such cheque fails to make the

payment of the said amount of money to the

payee or, as the case may be, to the holder in due

course of the cheque, within fifteen days of the

receipt of the said notice.

 

Explanation.- For the purposes of this section, “debt of

other liability” means a legally enforceable debt or

other liability.”

 

13. This Court in ICDS Ltd. v. Beena Shabeer and

Another2, has held that proceedings under Section 138

of the NI Act 1881 can be initiated even if the cheque

2 (2002) 6 SCC 426.

was originally issued as security and was subsequently

dishonoured owing to insufficient funds. The failure to

honour the concerned cheque is per se deemed as a

commission of an offence under Section 138 of the NI

Act 1881.

 

14. The NI Act 1881 enlists three essential conditions that

ought to be fulfilled before the said provision of law can

be invoked. 

Firstly, the cheque ought to have been

presented within the period of its validity. 

Secondly, a demand of payment ought to have been made

by the presenter of the cheque to the issuer, and lastly, the

drawer ought to have had failed to pay the amount

within a period of 15 days of the receipt of the demand.

These principles and pre-requisites stand well

established through Judgment of this Court in

Sadanandan Bhadran v. Madhavan Sunil Kumar3.

There is an explicit limitation of 30 days, beginning from

period when the cause of action arose, prescribed by the

3 (1998) 6 SCC 514.

statute vide Section 142(b) of the NI Act 1881 to initiate

proceedings under Section 138 of the NI Act 1881.

 

15. Furthermore, this Court expounded that the issuance of

cheque towards a liability, the presentation of the

cheque within the prescribed period, its return on

account of dishonour, notice to the accused, and failure

to pay within 15 days thereof, stand as sine qua non for

an offence under Section 138 of the NI Act 1881 as per

the decision in K. Bhaskaran v. Sankaran Vaidhyan

Balan and Another4. The same was subsequently

reiterated in numerous judgments of this Court as well

as that of the High Courts.

 

16. While referring to the period of limitation of one month

of filing a complaint for the purpose of Section 138 of the

NI Act 1881, the same is to begin after the drawer of the

cheque has failed to discharge his liability to the

presenter within the prescribed period of 15 days as per

the Proviso (c) to Section 138 of the NI Act 1881. A co-

joint reading of Sections 138 and 142 of the NI Act 1881

4 (1999) 7 SCC 510.

makes it clear that the cause of action only arises after

the failure of the drawer to pay, subsequent to the

receipt of the notice, and the complainant is restricted

from initiating multiple complaints against the

concerned drawer at different stages contemplated prior.

 

17. Furthermore, in light of such object encapsulated in the

Amendment to Chapter VIII, the Parliament by virtue of

Section 143 of the NI Act 1881 prescribed procedure of

summary trial enlisted in provisions of Sections 260 to

265 of the CrPC 1973 to be adopted during proceedings

under Section 138 of the NI Act 1881. Therefore, it can

be observed that the court shall adopt a liberal approach

with regard to attendance of an accused person and

until an accused’s presence is indispensable, a court can

allow for an exemption, in case of existence of any

exceptional circumstances. Moreover, issuance of a non-

bailable warrant in case of absence of the accused, at

the first instance, shall, due to any circumstance, be

avoided.

18. As the presumption contemplated by virtue of Section

118 of the NI Act 1881 entails, Section 139 was similarly

introduced to provide for a presumption that the holder

of cheque had received the concerned issued cheque

towards discharging of the liability of the drawer, either

in whole or in part. Therefore, at this juncture, it is ideal

to make a reference to Section 118 of the NI Act 1881,

which is reproduced as:

“118. Presumptions as to negotiable instruments

Until the contrary is proved, the following presumptions

shall be made:-

 

(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.

 

(b) as to date:-that every negotiable instrument

bearing a date was made or drawn on such date.

 

(c) as to time of acceptance:-that every accepted

bill of exchange was accepted within a

reasonable time after its date and before its

maturity.

 

(d) as to time of transfer: -that every transfer of a

negotiable instrument was made before its

maturity.

 

(e) as to order of indorsements: that the

indorsements appearing upon a negotiable

instrument were made in the order in which they

appear then on.

 

(f) as to stamp:  that a lost promissory note, bill of

exchange or cheque was duly stamped;

(g) that holder is a holder in due course: that the

holder of a negotiable instrument is a holder in

due course: provided that, where the instrument

has been obtained from its lawful owner, or from

any person in lawful custody thereof, by means

of an offence or fraud, or has been obtained from

the maker or acceptor thereof by means of an

offence or fraud, or for unlawful consideration,

the burden of proving that the holder is a holder

in due course lies upon him.”

Chapter XIII of the NI Act 1881, of which Section 118 is

a part, lays down special rules for evidence to be

adduced within the scheme of the Act herein. As the text

of the said provision showcases, it raises a rebuttable

presumption as against the drawer to the extent that the

concerned negotiable instrument was drawn and

subsequently accepted, indorsed, negotiated, or

transferred for an existing consideration, and the date

so designated on such an instrument is the date when

the concerned negotiable instrument was drawn. It is

also further presumed that the same was transferred

before its maturity and that the order in which multiple

indorsements appear on such an instrument, that is the

deemed order thereon. Lastly, the holder of a negotiable

instrument is one in its due course, subject to a

situation where the concerned instrument while being

obtained from a lawful owner and from his or her lawful

custody thereof through undertaking of an offence as

contemplated under any statute or through the means

of fraud, the burden to prove him or her being a holder

in due course, instead, lies upon such a holder.

 

19. Accordingly, to begin with, the bare provision of Section

139 of the NI Act 1881 is reproduced herein below:

“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 section138 for the discharge, in whole or

in part, of any debt or other liability.”

The aforesaid presumption entails an obligation on the

court conducting the trial for an offence under Section

138 of the NI Act 1881 to presume that the cheque in

question was issued by the drawer or accused for the

discharge of a particular liability. The use of expression

“shall presume” ameliorates the conundrum pertaining

to the right of the accused to present evidence for the

purpose of rebutting the said presumption.

Furthermore, the effect of such presumption is that,

upon filing of the complaint along with relevant

documents, thereby prima facie establishing the case

against the drawer, the onus of proof shifts on the

drawer or accused to adduce cogent material and

evidence for rebutting the said presumption, and as

established in Laxmi Dyechem v. State of Gujarat and

Others5, based on preponderance of probabilities.

 

20. While describing the offence envisaged under Section

138 of the NI Act 1881 as a regulatory offence for largely

being in the nature of a civil wrong with its impact

confined to private parties within commercial

transactions, the 3-Judge Bench in the decision of

Rangappa (supra) highlighted Section 139 of the NI Act

1881 to be an example of a reverse onus clause. This is

done so, as the Court expounds, in the light of

Parliament’s intent, which can be culled out from the

peculiar placing of act of dishonour of cheque in a

statute having criminal overtones. The underlying object

of such deliberate placement is to inject and enhance

5 (2012) 13 SCC 375.

credibility of negotiable instruments. Additionally, the

reverse onus clause serves as an indispensable “device

to prevent undue delay in the course of litigation”. While

acknowledging the test of proportionality and having laid

the interpretation of Section 139 of the NI Act 1881

hereof, it was further held that an accused cannot be

obligated to rebut the said presumption through an

unduly high standard of proof. This is in light of the

observations laid down by a co-ordinate Bench in Hiten

P. Dalal v. Bratindranath Banerjee6, whereby it was

clarified that the rebuttal ought not to be undertaken

conclusively by an accused, which is reiterated as

follows:

“23. In other words, provided the facts required to form

the basis of a presumption of law exist, no discretion is

left with the court but to draw the statutory conclusion,

but this does not preclude the person against whom the

presumption is drawn from rebutting it and proving the

contrary. A fact is said to be proved when,

‘after considering the matters before it, the court

either believes it to exist, or considers its existence

so probable that a prudent man ought, under the

circumstances of the particular case, to act upon

the supposition that it exists’ [Section 3, Evidence

Act].

Therefore, the rebuttal does not have to be conclusively

established but such evidence must be adduced before

the court in support of the defence that the court must

either believe the defence to exist or consider its

existence to be reasonably probable, the standard of

reasonability being that of the ‘prudent man’.”

Therefore, it may be said that the liability of the defence

in cases under Section 138 of the NI Act 1881 is not that

of proving its case beyond reasonable doubt.

 

21. In light of the aforesaid discussion, and as underscored

by this Court recently in the decision of Rajesh Jain v.

Ajay Singh7, an accused may establish non-existence of

a debt or liability either through conclusive evidence that

the concerned cheque was not issued towards the

presumed debt or liability, or through adduction of

circumstantial evidence vide standard of preponderance

of probabilities.

 

22. Since a presumption only enables the holder to show a

prima facie case, it can only survive before a court of law

subject to contrary not having been proved to the effect

that a cheque or negotiable instrument was not issued

for a consideration or for discharge of any existing or

7 (2023) 10 SCC 148.

future debt or liability. In this backdrop, it is pertinent

to make a reference to a decision of 3-Judge Bench in

Bir Singh v. Mukesh Kumar8, which went on to hold

that if a signature on a blank cheque stands admitted to

having been inscribed voluntarily, it is sufficient to

trigger a presumption under Section 139 of the NI Act

1881, even if there is no admission to the effect of

execution of entire contents in the cheque.

 

23. It is therefore apposite to make a reference to the

provision of Section 140 of the NI Act 1881, which

ruminates mens rea to be immaterial while dealing with

proceedings under Section 138 of the NI Act 1881. The

said legislative wisdom of the Parliament which is

imbibed in the bare text of the provision is reproduced

as below:

“140. Defence which may not be allowed in any

prosecution under section 138- It shall not be a

defence in a prosecution for an offence under section

138 that the drawer had no reason to believe when he

issued the cheque that the cheque may be dishonoured

on presentment for the reasons stated in that section.”

8 (2019) 4 SCC 197.

24. Through this legal fiction adopted by the legislature vide

Amendment Act of 1988 to the NI Act 1881 it has barred

the drawer of a cheque, which was dishonoured, to take

a defence that at the time of issuance of the cheque in

question he or she had no reason to believe that the

same will be dishonoured upon being presented by the

holder of such a cheque, especially and specifically for

the reasons underlined in Section 138 of the NI Act

1881.

 

25. A comprehensive reference to the Sections 118, 139 and

140 of the NI Act 1881 gives birth to a deemed fiction

which was also articulated by this Court in K.N. Beena

v. Muniyappan and Another9 as follows:

 

“Under section 118, unless the contrary was proved, it

is to be presumed that the negotiable instrument

(including a cheque) had been made or drawn for

consideration. Under section 139 the court has to

presume, unless the contrary was proved, that the

holder of the cheque received the cheque for discharge,

in whole or in part, of a debt or liability. Thus, in

complaints under section 138, the court has to presume

that the cheque had been issued for a debtor’s liability.

This presumption is rebuttable. However, the burden of

proving that a cheque had not been issued for a debt or

liability is on the accused. The Supreme Court in the

9 (2001) 8 SCC 458.

case of Hiten P. Dalal v. Bratindranath Banerjee has

also taken an identical view.”

 

26. Furthermore, on the aspect of adducing evidence for

rebuttal of the aforesaid statutory presumption, it is

pertinent to cumulatively read the decisions of this

Court in Rangappa (supra) and Rajesh Jain (supra)

which would go on to clarify that accused can

undoubtedly place reliance on the materials adduced by

the complainant, which would include not only the

complainant’s version in the original complaint, but also

the case in the legal or demand notice, complainant’s

case at the trial, as also the plea of the accused in the

reply notice, his Section 313 CrPC 1973 statement or at

the trial as to the circumstances under which the

promissory note or cheque was executed. The accused

ought not to adduce any further or new evidence from

his end in said circumstances to rebut the concerned

statutory presumption.

 

27. Applying the aforementioned legal position to the

present factual matrix, it is apparent that there existed

a contradiction in the complaint moved by the Appellant

as against his cross-examination relatable to the time of

presentation of the cheque by the Respondent as per the

statements of the Appellant. This is to the effect that

while the Appellant claimed the cheque to have been

issued at the time of advancing of the loan as a security,

however, as per his statement during the cross-

examination it was revealed that the same was

presented when an alleged demand for repayment of

alleged loan amount was raised before the Respondent,

after a period of six months of advancement.

Furthermore, there was no financial capacity or

acknowledgement in his Income Tax Returns by the

Appellant to the effect of having advanced a loan to the

Respondent. Even further the Appellant has not been

able to showcase as to when the said loan was advanced

in favour of the Respondent nor has he been able to

explain as to how a cheque issued by the Respondent

allegedly in favour of Mr Mallikarjun landed in the hands

of the instant holder, that is, the Appellant.

28. Admittedly, the Appellant was able to establish that the

signature on the cheque in question was of the

Respondent and in regard to the decision of this Court

in Bir Singh (supra), a presumption is to ideally arise.

However, in the above referred context of the factual

matrix, the inability of the Appellant to put forth the

details of the loan advanced, and his contradictory

statements, the ratio therein would not impact the

present case to the effect of giving rise to the statutory

presumption under Section 139 of the NI Act 1881. The

Respondent has been able to shift the weight of the

scales of justice in his favour through the preponderance

of probabilities.

 

29. The Trial Court had rightly observed that the Appellant

was not able to plead even a valid existence of a legally

recoverable debt as the very issuance of cheque is

dubious based on the fallacies and contradictions in the

evidence adduced by the parties. Furthermore, the fact

that the Respondent had inscribed his signature on the

agreement drawn on a white paper and not on a stamp

paper as presented by the Appellant, creates another set

of doubt in the case. Since the accused has been able to

cast a shadow of doubt on the case presented by the

Appellant, he has therefore successfully rebutted the

presumption stipulated by Section 139 of the NI Act

1881.

 

30. Moreover, affirming the findings of the Trial Court, the

High Court observed that while the signature of the

Respondent on the cheque drawn by him as well as on

the agreement between the parties herein stands

admitted, in case where the concern of financial capacity

of the creditor is raised on behalf of an accused, the

same is to be discharged by the complainant through

leading of cogent evidence.

 

31. The instant case pertains to challenge against

concurrent findings of fact favouring the acquittal of the

respondent, it would be cogent to delve into an analysis

of the principles underlining the exercise of power to

adjudicate a challenge against acquittal bolstered by

concurrent findings. 

 

The following broad principles can

be culled out after a comprehensive analysis of judicial

pronouncements:

 

i) Criminal jurisprudence emphasises on the

fundamental essence of liberty and presumption of

innocence unless proven guilty. This presumption

gets emboldened by virtue of concurrent findings of

acquittal. Therefore, this court must be extra-

cautious while dealing with a challenge against

acquittal as the said presumption gets reinforced by

virtue of a well-reasoned favourable outcome.

Consequently, the onus on the prosecution side

becomes more burdensome pursuant to the said

double presumption.

 

ii) In case of concurrent findings of acquittal, this

Court would ordinarily not interfere with such view

considering the principle of liberty enshrined in

Article 21 of the Constitution of India 1950, unless

perversity is blatantly forthcoming and there are

compelling reasons.

iii) Where two views are possible, then this Court would

not ordinarily interfere and reverse the concurrent

findings of acquittal. However, where the situation

is such that the only conclusion which could be

arrived at from a comprehensive appraisal of

evidence, shows that there has been a grave

miscarriage of justice, then, notwithstanding such

concurrent view, this Court would not restrict itself

to adopt an oppugnant view. [Vide State of Uttar

Pradesh v. Dan Singh10]

 

iv) To adjudge whether the concurrent findings of

acquittal are ‘perverse’ it is to be seen whether there

has been failure of justice. This Court in Babu v.

State of Kerala11 clarified the ambit of the term

‘perversity’ as

“if the findings have been arrived at by ignoring

or excluding relevant material or by taking into

consideration irrelevant/admissible material. The

finding may also be said to be perverse if it is

‘against the weight of evidence’, or if the finding

so outrageously defies logic as to suffer from the

vice of irrationality.”

v) In situations of concurrent findings favoring

accused, interference is required where the trial

court adopted an incorrect approach in framing of

an issue of fact and the appellate court whilst

affirming the view of the trial court, lacked in

appreciating the evidence produced by the accused

in rebutting a legal presumption. [Vide Rajesh Jain

v. Ajay Singh12]

 

vi) Furthermore, such interference is necessitated to

safeguard interests of justice when the acquittal is

based on some irrelevant grounds or fallacies in re-

appreciation of any fundamental evidentiary

material or a manifest error of law or in cases of non-

adherence to the principles of natural justice or the

decision is manifestly unjust or where an acquittal

which is fundamentally based on an exaggerated

adherence to the principle of granting benefit of

doubt to the accused, is liable to be set aside. Say in

cases where the court severed the connection

between accused and criminality committed by him

upon a cursory examination of evidences. [Vide

State of Punjab v. Gurpreet Singh and Others13

and Rajesh Prasad v. State of Bihar14]

 

32. Upon perusal of the aforementioned principles and

applying them to the facts and circumstances of the

present matter, it is evident that there is no perversity

and lack of evidence in the case of the respondent-

accused. The concurrent findings have backing of

detailed appraisal of evidences and facts, therefore, do

not warrant interference in light of above enlisted

principles. In a similar set of facts as in the present case,

involving criminal liability arising out of dishonour of

cheque, this Court in M/s Rajco Steel Enterprises v.

Kavita Saraff and Another15 dejected from reversing

unless such findings are perverse or bereft of evidentiary

corroboration or lacks question of law.

 

33. In furtherance of the aforesaid principles and the

reasons ascribed thereof, the present challenge to the

aforesaid impugned judgment dated 03.03.2023 by the

High Court of Karnataka at Kalaburagi is bereft of any

merits and does not call for any interference of this

court.

 

34. The instant appeal is dismissed and the findings of the

High Court in the impugned judgment dated 03.03.2023

are affirmed.

 

35. Pending applications, if any, also stand disposed of.

 

……………………………………………J.

(B.V. NAGARATHNA)

……………………………………………J.                    (

AUGUSTINE GEORGE MASIH)

NEW DELHI;                                         AUGUST 07, 2024.

 

 

 

 

PNP                                                     1/21                              WP6961

 

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

 

CIVIL APPELLATE JURISDICTION

 

WRIT PETITION NO. 6961 OF 2012

 

Vivek Vishnupant Kulkarni

Age : 58 years, Occ. Advocate,

Residing at Agasti Bunglow

Sane Guruji Society, Vishrambag,

Sangli 416 415. ...Petitioner.

 

Versus

 

1. The State of Maharashtra, through

Chief Secretary, Mantralaya, Mumbai.

2. The State Information Commission,

Through State Information Commissioner,

Having bench at Pune, New Administrative

Building, 4th Floor, Opp. Council Hall,

Pune – 1.

3. Deputy Secretary and Appellate Authority

Urban Development Department,

Mantralaya, Mumbai 400 032.

4. The Section Officer and Information Officer,

Urban Development Department,

Mantralaya, Mumbai 400 032. ..Respondents.

…..

Mr. Uday P. Warunjikar for the Petitioner.

Mr. V.S. Gokhale, AGP for Respondent Nos.1, 3 and 4.

 

…..

CORAM : A.S. OKA &

A.S. GADKARI, JJ.

Judgment reserved on : 19th December 2014.

Judgment pronounced on : 27th February 2015.

 

 

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ORAL JUDGMENT (PER A.S. GADKARI, J.) :

Notice for final disposal was issued under the order dated

21st August, 2013.

2. Heard the learned counsel for the Petitioner and the learned

AGP for the Respondent Nos.1, 3 and 4. The Respondent No.2 is a

formal party as the Petitioner by this present Petition has prayed

for the implementation of the order dated 18th August, 2011

passed by the Respondent No.2. Hence, notice to the said

Respondent is dispensed with.

 

3. The case in hand is a classic example, as to how the

Government officers for protecting their fellow officers tend to

frustrate the basic intention of the legislature behind the

enactment of the Right to Information Act, 2005.

 

4. The brief facts which are necessary for the decision of the

present case can be stated thus :

 

(i) The Petitioner is associated with a public trust by the name

Swatantraya Veer Sawarkar Pratishthan, Vishrambaug, Sangli

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dedicated to the social, educational, and charitable activities.

The said trust is running two schools and both the said schools

are having about 1600 students on its roll.

 

(ii) The Petitioner filed an application dated 5th September,

2008 with the Respondent No.4 for seeking information under the

Right to Information Act, 2005 in respect of the Government

Resolution dated 21st August, 1996. The said resolution was

pertaining to the release of various lands in and around the

vicinity of Sangli city which were acquired by the Government

under the Urban Land (Ceiling and Regulation) Act, 1976. He

sought information about the Government notings and other

documents on the basis of which the said Government Resolution

was issued. The details of the lands released on the basis of the

said Government Resolution were also sought. By a

communication dated 22nd September, 2008 the Respondent

No.4 informed the Petitioner that the required information sought

for by the Petitioner is pertaining to file No. ULC/1089/2123//ULC-

2 which is not available on the record of the Urban Development

Department and therefore, the said information cannot be

furnished to the Petitioner. By the said communication dated

 

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22nd September, 2008 it was informed to the Petitioner that the

other information which was sought for by the Petitioner vide his

point No.4 in his application dated 5th September, 2008 is in

connection with the office of the Deputy Collector and

competent authority, Sangli and the said application to that

extent has been transferred / transmitted to the said authority for

further action in the matter.

 

(iii) The Petitioner feeling aggrieved by the said non-action by

the Respondent No.4 preferred an appeal bearing No.4 of 2008

under Section 19(1) of the Right to Information Act, 2005 before

the Respondent No.3 on 27th November, 2008. The Respondent

No.3 i.e. the Appellate Authority and the Deputy Secretary, Urban

Development Department by its order dated Nil January 2009

partly allowed the said appeal thereby directing the Information

Officer along with the Section Officer ULCA-2 to take search of

the concerned file bearing No. ULC/1089/2123//ULC-2 and to

submit the file or information in connection with the file to the

Petitioner immediately. It was further directed to the Deputy

Collector and Competent Authority, Sangli Urban Agglomeration

to provide the information in respect of the lands returned to the

 

 

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owners as per the Government Resolution dated 21st August,

1996. The said information was directed to be furnished to the

Petitioner within a period of fifteen days. The First Appellate

Authority i.e. the Respondent No.3 in his order dated Nil January

2009 has observed that as the Government Resolution dated 21st

August, 1996 is a policy decision taken by the Government, the

file pertaining to the said decision must be available. It was

observed that there is a scope to make efforts for tracing the said

file. It was also observed that the information which was sought

for by the Petitioner was not available with the Public Information

Officer and therefore, the said information was not made

available to the Petitioner. The First Appellate Authority further

proceeded to observe that the Public Information Officer did not

have any intention to deny the said information sought for by

the Petitioner.

 

(iv) The Petitioner feeling dissatisfied by the order dated Nil

January 2009 passed in Appeal No.4 of 2008 preferred a Second

Appeal dated 15th June, 2009 as contemplated under Section

19(3) of the Right to Information Act, 2005 before the State

Information Commission bearing No.262/2011/Sangli before its

 

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Pune Bench. In the said appeal, the Petitioner had raised certain

issues and contended that if the information sought for from the

Government authorities is not available with the concerned

department itself, then there is no use of the Right to Information

Act, 2005. The Petitioner also pleaded that as the information

sought for by the Petitioner from the concerned authority is

having serious repercussions, the said information was of utmost

importance from the point of view of public interest and

requested the Second Appellate Authority to allow the appeal.

(v) As the Second Appellate Authority did not hear the appeal

immediately / expeditiously, the Petitioner sent reminder letters

dated 2nd December, 2009, 1st July, 2010, 14th July, 2010, 28th

July, 2010 and 13th May, 2011 to the Appellate Authority. The

Second Appellate Authority i.e. the Respondent No.2 herein

thereafter on 6th April 2011 heard all the concerned in the matter

and passed the judgment and order dated 18th August, 2011 in

said Second Appeal No.266/2011/Sangli. During the course of

hearing of the said Second Appeal, the Second Appellate

Authority had orally directed the Public Information Officer and

the First Appellate Authority to take all the steps for tracing out

 

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the necessary and required files with respect to the Government

Resolution dated 21st August, 1996 and the file bearing No.

ULC/1089/2123//ULC- 2 and submit a report on or before 6th May,

2011. It was further directed by the Second Appellate Authority

i.e. the Respondent No.2 to the First Appellate Authority i.e. the

Respondent No.3 herein that in case the said files are not traced

out then to register offence / criminal complaint against all the

concerned as contemplated under the provisions of the

Maharashtra Public Records Act, 2005 and to submit a report to

the said authority on or before 6th May, 2011. The said judgment

and order also discloses that by a letter dated 7th July, 2011 the

Respondent No.3 submitted an elaborate explanation thereby

giving various reasons and expressing its inability to comply with

the direction issued by the Respondent No.2 and submitted to

the said Second Appellate Authority that the oral directions

given in Appeal No.266/2011/Sangli may be reviewed and

appropriate order may be passed in the matter. The report /

communication dated 7th July, 2011 issued by the Respondent

No.3 (Mr.Suresh Kakani, Joint Secretary, Government of

Maharashtra) is at page No.44 of the present Petition. The

Respondent No.2 in its judgment and order dated 18th August,

 

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2011 has also come to the conclusion that the documents in

respect of which the information was sought by the Petitioner

were required to be preserved as the same were public

documents within the meaning of the Maharashtra Public Records

Act, 2005. It was observed that the fact that the said public

record is not available was serious. It amounts to denying

information to the citizens in respect of important decisions of

the State. The Respondent No.2 in its operative part of the order while

allowing the appeal of the Petitioner directed the Respondent No.3 to

form a special team and trace out the said file on or before 13th

September, 2011 and submit a report to the State Information

Commission. It was also directed by the Respondent No.2 that in case

the aforesaid file is not traced out or made available, in that event, as

the record was not maintained as contemplated under the

Maharashtra Public Records Act, 2005, it amounts to denial of the

information to the Petitioner and therefore, it was directed to initiate

action against all the concerned by registering an offence under the

Maharashtra Public Records Act, 2005. The said direction was issued

to Mr. Suresh Kakani by specifically mentioning his name. It was

further directed that the First Appellate Authority shall submit a report

to the State Information Commission on or before 5th October, 2011.

 

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(vi) As the order of the Respondent No.2 was not complied with

within the stipulated period, the Petitioner sent reminders dated 10th

October, 2011 and 2nd December, 2011 to the Respondent No.2 i.e. the

State Information Commission and a letter dated 27th April, 2012 to the

Respondent No.3 i.e. Mr.Suresh Kakani, the First Appellate Authority

and Deputy Secretary, Urban Development Department, Mantralaya,

Mumbai requesting the said authorities to inform the Petitioner about

the steps taken by the concerned authority in pursuance of the order

passed by the Respondent No.2. i.e. the State Information

Commission.

 

(vii) As the Respondent No.3 i.e. the First Appellate Authority did not

comply with the order dated 18th August, 2008 passed by the

Respondent No.2 i.e. the State Information Commission, the Petitioner

has approached this Court under Article 226 of the Constitution of

India for a writ of mandamus or a direction that the Respondents be

directed to implement the order passed by the State Information

Commission, Pune i.e. the Respondent No.2 herein dated 11th August,

2011 in Appeal No.262/2011/Sangli within a stipulated period as this

Court may direct.

 

5. This Court by its order dated 10th August, 2012 issued notice to

the Respondent Nos.1, 3 and 4 and after service of the notice, the

 

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Respondent No.3 i.e. Mr.Suresh Kakani, the Joint Secretary Urban

Development Department, Mantralaya, Mumbai filed a detailed

affidavit dated 29th October, 2012 thereby placing on record the

various steps allegedly taken for tracing out the file bearing

No.ULC/1089/2123//ULC- 2. On a plain reading of the said affidavit

dated 29th October, 2012 it is revealed that, instead of submitting the

compliance report of the order passed by the State Information

Commissioner, the Respondent No.3 has only given several excuses

and the difficulties which he has allegedly faced while attempting to

comply with the order passed by the State Election Commission. In

paragraph No.8 of the order dated 18th August, 2011, the Respondent

No.3 has stated that “It was expected of the First Appellate Authority

to submit its report before 5th October, 2011 to the Commission itself.”

It appears to us that the direction which was issued by the State

Information Commission in the order dated 18th August, 2011 in its

paragraph No.2 of the operative part has been casually treated by the

Respondent No.3 as the “expectation” of the State Information

Commission. It was in fact nothing short of a direction. As stated

earlier, the Respondent No.3 has given several reasons for noncompliance

of the order dated 18th August, 2011 passed by the

Respondent No.2 State Information Commission. It further appears to

us that the said affidavit dated 29th October, 2012 is conspicuously

silent about the registration of the First Information Report and/or the

 

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criminal complaint against the concerned persons. He himself has

tried to give a clean chit to all the concerned including himself. This

approach of the Respondent No.3 Mr.Suresh Kakani is reprehensible

and cannot be countenanced. The said affidavit dated 29th October,

2012 was considered by the Division Bench of this Court on 8th

February, 2013 and it was observed that, this Court was not satisfied

about the fact that the State has made genuine efforts to comply with

the order dated 18th August, 2011 passed by the State Information

Commission. It was further directed that if the documents could not

be found, an offence could have been registered as directed by the

State Information Commission. It was further observed in the said

order dated 8th February, 2013 that only by way of indulgence that this

Court was granting further time to the learned AGP to enable the State

to take appropriate action in the matter as the State had accepted the

said order dated 18th August, 2011 passed by the State Information

Commission.

 

6. The Petitioner has filed an affidavit in rejoinder dated 17th

January, 2013 to the affidavit in reply of the Respondent No.3,

Mr.Suresh Kakani. In the affidavit in rejoinder, the Petitioner has stated

that till date, the liability and accountability with reference to the said

file in question has not yet been fixed by the Respondents and

therefore, the various contentions raised by the Respondent No.3 were

 

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incorrect. The Petitioner has also denied the various contentions

raised by the Respondent No.3 in his affidavit. The Petitioner lastly

submitted in his affidavit in rejoinder that the Respondent Nos. 3 and 4

cannot come with a case that the file is not traceable. It is further

contended that the Government Resolution dated 21st August, 1996

and the file No. ULC/1089/2123//ULC- 2 are pertaining to the release

of excess land under the provisions of the Urban Land Ceiling Act and

there is every possibility that, the interested persons therein might

have taken undue interest in misplacing the said files. The Petitioner

has further contended that apart from the consequential action,

investigation at the hands of police is necessary, not only for tracing

out the file, but also for identifying the persons responsible for its

disappearance. The Petitioner has also raised concern about the

seriousness of the matter involved in the present case.

7. It is further surprising to note that though Mr.Suresh Kakani had

filed an affidavit dated 29th October, 2012 on behalf of the Respondent

Nos.1 and 3 i.e. for the State of Maharashtra and he himself being the

First Appellate Authority under the Right to Information Act, an

additional affidavit in reply on behalf of the Respondent Nos.1, 3 and 4

has been filed by Mr. S.K. Salimath, Deputy Secretary, Urban

Development Department, Mantralaya, Mumbai dated 17th April, 2013.

It is pertinent to note here that the said Mr.S.K. Salimath while

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reiterating what has been already stated by Mr.Suresh Kakani in his

earlier affidavit has further tried to absolve all the concerned involved

in the present matter and has stated in paragraph Nos.6, 7, 8 and 9

as under:-

 

“6. I humbly submit that even though the efforts made so far

have failed to trace the aforesaid file, the Department is still

making every endeavour to locate the file.

 

7. I further respectfully submit that the search operations

regarding the aforesaid file and the process of fixing

responsibility for the failure in the safe-keeping of the concerned

documents have been complicated by the following factors:-

 

(i) Initially the General Administration Department of the

State Government was handling all the matter pertaining to ULC

Act, 1976. Thereafter, the said subject was transferred to the

Housing and Special Assistance Department and subsequently

vide Government Resolution dated 14.9.2000, all the matters

under ULC Act were transferred to the Urban Development

Department. Since the said subject was transferred along with

the staff and the office record, it is difficult to pinpoint at what

exact point of time, the documents sought by the petitioner were

misplaced.

 

(ii) The Government Resolution No.ULC1089/2123/NA.JA.KA.

DHA.2, dated 21.8.1996 was issued when the subject of ULC was

 

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with the Housing and Special Assistance Department and it

appears to have been issued on a file bearing case No.2123,

created in the year 1989 by the Housing and Special Assistance

Department. As per the office procedure, the Housing and

Special Assistance Department had maintained Common Case

Register for the year 1989-1990 and Case Register numbers

given therein were in continuation of the earlier numbers. I

further say that from the said Government Resolution dated

21.8.1996, it is noticed that the subject matter of the said

Government Resolution was started in the year 1989 and the

Reference Register Number mentioned by the Housing and

Special Assistance Department was 2123 and the concerned

Branch was ULC-2. A perusal of the said Register, containing

entries from 1095/89 to 2291/90, shows that the Case No.2123

pertains to the year 1990 and actually refers to a different

subject viz. “Exemption granted under Sec.20 of ULC Act in

respect of Smt. Chandbi Noor Mohd. Saudagar, Sangli (Taj C.H.S.

Sangli)”. I further submit that in the said Case Register there is

no entry bearing no.2123 of 1989.

8. It is humbly submit in the light of circumstances explained

above, it has been very difficult for this Department to fix

responsibility on any member of the staff for the misplacing of

the documents in question.

 

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9. It is humbly submitted that as per Section 8 of the

Maharashtra Public Records Act, 2005, no public record shall be

destroyed or disposed of in a manner other than prescribed

under the said Act. Any person contravening the provisions of

section 8 is liable for punishment as per the provisions of section

9. I humbly say that since no deliberate attempt by any officer

or employee of this Department to purposely misplace or destroy

the record in question has been noticed, so the Department has

not lodged any criminal complaint against any member of the

staff under the aforesaid section.”

 

8. After reading the affidavit of Mr.Suresh Kakani dated 29th

October, 2012 and the affidavit of Mr.S.K. Salimath dated 17th April,

2013, it appears that the said officers have given a clean chit to all

the concerned without fixing the liability on anybody. Mr.S.K. Salimath

instead of implementing the order passed by the State Information

Commission in its true letter and spirit has proceeded to give a go-bye

to the order of the Second Appellate Authority. Mr.S.K. Salimath on his

own has come to a conclusion that it is very difficult for his department

to fix the responsibility on any member of the staff for misplacing the

documents in question. It clearly appears to us that while exhibiting

over enthusiasm, Mr. Salimath has taken to himself the task of the

investigator and the fact finding authority. He has made a bold

 

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statement in paragraph 9 that since no deliberate attempt by any

officer or employee of his department to purposely misplace or destroy

the record in question has been noticed, the department has not

lodged any criminal complaint against any member of the staff under

the relevant section of Maharashtra Public Records Act, 2005. We

must observe that Mr. Salimath has exceeded his jurisdiction and has

tried to overreach the order passed by the State Information

Commission dated 18th August, 2011. Mr. Salimath has no authority to

decide nor to register an offence. Mr. Salimath was expected to follow

the order passed by the State Information Commission in its true letter

and spirit.

 

9. Mr.Suresh Kakani and Mr. S.K. Salimath cannot be allowed to

raise or take a spacious plea that the order passed by the State

Information Commissioner dated 18th August, 2011 cannot be

complied with. The State Information Commissioner has passed the

said order which binds the Respondent No.3.

 

10. It is pertinent to note the preamble to the Right to Information

Act, 2005 which reads as under :

“An Act to provide for setting out the practical regime of

right to information for citizens to secure access to information

under the control of public authorities, in order to promote

 

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transparency and accountability in the working of every public

authority, the constitution of a Central Information Commission

and State Information Commissions and for matters connected

therewith or incidental thereto.

WHEREAS the Constitution of India has established

democratic Republic;

AND WHEREAS democracy requires an informed citizenry

and transparency of information which are vital to its functioning

and also to contain corruption and to hold Governments and

their instrumentalities accountable to the governed;

AND WHEREAS revelation of information in actual practice

is likely to conflict with other public interests including efficient

operations of the Governments, optimum use of limited fiscal

resources and the preservation of confidentiality of sensitive

information;

AND WHEREAS it is necessary to harmonise these

conflicting interests while preserving the paramountcy of the

democratic ideal;

NOW, THEREFORE, it is expedient to provide for furnishing

certain information to citizens who desire to have it.”

Thus, it is clear that the Right to Information Act, 2005 has

been enacted by the Parliament of India for setting up the practical

 

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regime of right to information for citizens to secure access to

information under the control of public authorities, and in order to

promote transparency and accountability in the working of every

public authority.

11. At this stage, we may also refer to relevant provisions of the

Maharashtra Public Records Act 2005 which read as under :

 

“4. No person shall take or cause to be taken out of the State

of Maharashtra any public records without the prior approval of

the State Government :

Provided that no such prior approval shall be required if

any public records are taken or sent, out of the State of

Maharashtra for any official purpose.”

 

“7. (1) The records officer shall in the event of any

unauthorised removal, destruction, defacement or alteration of

any public records under his charge, forthwith take appropriate

action for the recovery or restoration of such public records.

 

(2) The records officer shall submit a report in writing to the

Director without any delay on any information about any

unauthorised removal, destruction, defacement or alteration of

any public records under his charge and about the action

initiated by him and shall take action as he may deem necessary

subject to the directions, if any, given by the Director.

 

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(3) The records officer may seek assistance from any

Government officer or any other person for the purpose of

recovery or restoration of the public records and such officer or

person shall render all assistance to the records officer.

 

8. (1) Save as otherwise provided in any law for the time

being in force, no public record shall be destroyed or otherwise

disposed of except in such manner and subject to such

conditions as may be prescribed.

 

(2) No record, which is more than hundred years old on the

date of commencement of the Maharashtra Public Records Act,

2005, shall be destroyed except where in the opinion of the

Director, it is so defaced or is in such condition that it cannot be

put to any archival use.

 

9. Whoever contravenes any of the provisions of section 4 or

section 8 shall be punishable with imprisonment for a term which

may extend to five years or with fine which may extend to ten

thousand rupees or with both.”

 

12. Thus, Section 9 of the Maharashtra Public Records Act clearly

mandates that whoever contravenes the provisions of Section 4 or

Section 8 of the said Act shall be punishable with imprisonment for a

term which may extend to five years or with fine which may extend to

 

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ten thousand rupees or with both. Thus, according to us the said file

bearing No. ULC/1089/2123/ULC-2 which pertains to the resolution

dated 21st August, 1996 is a 'public record' as contemplated under

Section 2(g) of the Maharashtra Public Records Act, 2005 and it was

mandatory for all the concerned authorities to preserve it under the

provisions of the Maharashtra Public Records Act, 2005. Hence, in the

facts of the case, Section 9 of the Maharashtra Public Records Act,

2005 is certainly attracted. Taking into consideration the directions

given by the State Information Commission, it was mandatory firstly

for Mr.Suresh Kakani and secondly for Mr. S.K. Salimath to set criminal

law in motion and leave it to the investigating agency to find out the

culprits. In view of the clear direction issued by the Second Appellate

Authority, they were bound to set criminal law in motion as the

documents could not be traced within the stipulated time.

 

13. In the circumstances, we pass the following order :-

i) We direct the Respondent No.3 to set the criminal law

in motion as directed under the judgment and order passed by

the Second Appellate Authority dated 18th August, 2011;

ii) We further direct that after the First Information

Report is registered by the State of Maharashtra, the

 

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investigation shall be completed as expeditiously as possible and

preferably within the period of six months from the date of

registration of the First Information Report. The concerned

Commissioner of Police shall consider of entrusting the

investigation to an officer of a higher rank and not below the

rank of a Deputy Commissioner of Police;

 

iii) We direct the State to pay cost of Rs.15,000/- to the

Petitioner.

 

We allow the present Petition in terms of the aforesaid

directions.

 

(A.S. Oka, J.)                         (A.S. Gadkari, J.)

Refer Also: FIR against Public Information Officer