Kalappa Veerbharappa Badiger vs Aravind S. Patil
2021 Latest Caselaw 3136 Kant

            IN THE HIGH COURT OF KARNATAKA
                    DHARWAD BENCH

         DATED THIS THE 11TH DAY OF AUGUST, 2021

                         BEFORE

       THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR

              CRIMINAL APPEAL NO.2886/2011

BETWEEN:

KALLAPPA S/O VEERBHADRAPPA BADIGER,
AGE: 44 YEARS, OCC: CONTRACTOR,
R/O DAIVAJAN NAGAR, HEBBALLI AGASI,
DHARWAD.
                                             ...APPELLANT
(BY SRI.M.B.GUNDAWDE, ADV.)

AND:

ARAVIND S.PATIL,
AGE: 40 YEARS, OCC: CONTRACTOR & BUSINESS,
R/O MICHIGAN COMPOUND, SAPTAPUR,
DHARWAD.
                                         ...RESPONDENT
(BY SRI.RAJA RAGHAVENDRA NAIK, ADV.)

      THIS APPEAL IS FILED UNDER SECTION 378(1) AND (3)
OF CR.P.C. SEEKING TO SET ASIDE THE JUDGMENT AND
ORDER A ACQUITTAL DATED 21.10.2011 PASSED BY THE
PRL.CIVIL   JUDGE     AND    PRL.JMFC,  DHARWAD      IN
C.C.NO.691/2009 AND CONVICT THE RESPONDENT FOR THE
OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE
INSTRUMENTS ACT.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT     ON    03.08.20201  COMING    ON    FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
                                    2




                             JUDGMENT

The complainant/appellant has filed this appeal for

setting aside the judgment and order of acquittal dated

21.10.2011 passed by the Principal Civil Judge and

Principal JMFC, Dharwad in C.C.No.691/2009 whereby he

has acquitted the accused/respondent for the offence

punishable under Section 138 Negotiable Instruments Act.

2. For the sake of convenience, the parties herein

are referred with the original rank occupied by them before

the trial court.

3. The brief facts leading to the case are that, the

complainant and accused are known to each other, as they

were friends for the last 10 years. The

complainant/appellant is a Professional Civil Contractor,

while the respondent/accused is a Civil Contractor and

Businessman. They used to have financial transactions and

in the month of April 2009, the accused has availed a hand

loan of Rs.2,50,000/- by cash to meet his family

necessities. He has promised to return the loan within five

months. However, he did not return the loan.

Subsequently, the accused has issued a cheque bearing

No.451471 dated 16.07.2009 for a sum of Rs.2,50,000/-

drawn on Axis Bank Limited, Bengaluru and asked the

complainant to present the same. Accordingly, the

complainant has presented the cheque through his banker

Karnataka Vikas Grameena Bank, APMC Branch, Dharwad.

But the said cheque came to be dishonoured for

'insufficient funds' on 18.07.2009. As per the request of

the accused, he further presented the cheque on

27.08.2009 and again it was returned for 'insufficient

funds'. The same was brought to the notice of the accused,

but the accused did not take any steps and neglected to

pay the amount. Thereafter, the complainant issued legal

notice on 02.09.2009 calling upon the accused to pay the

cheque amount. In spite of receipt of notice, the accused

neither replied nor complied the same. Hence, the

complainant has lodged a private complaint under Section

200 of Cr.P.C.

4. Thereafter, on the basis of the sworn

statement and documents produced by the complainant,

the learned Magistrate found that there is sufficient

material to proceed against the accused and hence, he has

taken cognizance and issued process. The accused has

appeared and was enlarged on bail. Thereafter, the plea

under Section 138 of N.I.Act was recorded and accused

pleaded not guilty. The complainant got examined himself

as P.W.1 and one witness was examined on his behalf as

P.W.2 and he placed reliance on 10 documents as Exs.P1

to P10. Thereafter, the statement of the accused under

Section 313 of Cr.P.C. was recorded to enable him to

explain the incriminating evidence appearing against him

in the case of the prosecution. The case of the accused is

of total denial. He himself examined as D.W.1 and one

witness was examined as D.W.2 and he placed reliance on

one document, which is marked as Ex.D1.

5. The learned Magistrate after hearing both sides

and after appreciation of the evidence found that the

complainant has failed to prove that the cheqe of

Rs.2,50,000/- was issued towards legally enforceable debt

and further held that the transaction is also not established

and thereby acquitted the accused for the offence

punishable under Section 138 of N.I.Act. Being aggrieved

by this judgment of acquittal, the complainant has filed

this appeal.

6. Heard the arguments advanced by the learned

counsel for the complainant/appellant and learned counsel

for the accused/respondent. Perused the records of the

trial court.

7. Learned counsel for the appellant/complainant

would argue that issuance of cheque and signature on the

cheqe are not disputed by the complainant and as such,

the presumption is mandatory under Section 139 of

N.I.Act. He would also contend that the accused has failed

to rebut the said presumption and the trial court has failed

to notice that both the complainant and accused are doing

contract work and used to assist each other financially. He

would also contend that the accused has set up a defence

that issuance of cheque towards furniture work pertaining

to his house situated at Saptapur, Dharwad and since the

work was only worth Rs.1,50,000/-, the same is paid by

cash. He would contend that, in that event, the accused

has not taken any steps to get back the cheque under

Ex.P1. He would also contend that the trial court has also

not properly appreciated the evidence of P.Ws.1 and 2 and

given unnecessary importance to the transaction of

Rs.1,50,000/-. The trial court has failed to take note of the

fact that the said refund of Rs.1,50,000/- was pertaining to

the earlier hand loan transaction. He would further contend

that the trial court has also not taken note of the fact that

accused has not replied to the legal notice and there is

prima facie material and presumption is also in his favour

and as such, he would contend that the judgment of

acquittal passed by the trial court suffers from infirmities

and it is against the settled principles of law. Hence, he

would seek for interference by this court and prays for

allowing the appeal by setting aside the impugned

judgment of the trial court.

8. Per contra, learned counsel for the

respondent/accused would contend that the complainant is

also used to undertake the work of manufacturing furniture

and accused has entrusted the furniture work to him.

Initially, it was for Rs.2,50,000/- and such, he has issued

the cheque. He would contend that subsequently D.W.2

who has also got work executed from the complainant

revealed that the work is only worth Rs.1,50,000/-. Hence,

the said amount was independently paid with a request to

return the cheque of Rs.2,50,000/-. But the complainant

after having encashed Rs.1,50,000/- misused the earlier

cheque. He would also contend that accused was

financially sound and there was no need for him to take

any loan from the complainant. He would further contend

that the complainant has not even mentioned the date of

availing loan and he has simply asserted that in the month

of April 2009 he advanced the hand loan. He would

contend that though there is an initial presumption in

favour of the complainant, the accused by leading

independent evidence and as well as by way of cross-

examination rebutted the said presumption. Hence, the

burden is on the complainant to establish the existence of

legally enforceable debt. He would argue that the same is

not established and the trial court has appreciated this

aspect in detail and the judgment of the trial is on proper

appreciation of oral and documentary evidence and does

not call for any interference. Hence, he would seek for

rejection of the appeal.

9. Having heard the arguments and perusing the

records, now the following point would arise for my

consideration.

Whether the judgment of acquittal passed in C.C.No.691/2009 passed by the Principal Civil Judge & Principal JMFC, Dharwad acquitting the accused/respondent herein is illegal, erroneous and suffers from any infirmity so as to call for any interference by this court?

10. At the outset, it is to be noted here that the

financial position of both the complainant and accused is

not under serious dispute. Admittedly, accused is a

contractor and further, it is also undisputed fact that he

has also executed a furniture work belonging to the house

of the accused. However, it is to be noted here that the

complainant has admitted regarding furniture work

undertaken by him pertaining to the house of accused and

he has never asserted as to what was the amount and

when that was executed. On the contrary, his contention is

that cheque for Rs.1,50,000/- which was also sent by the

accused was encashed by him was pertaining to earlier

hand loan given to the accused. It is important to note

here that the complainant in his complaint nowhere

specified regarding earlier loan of Rs.1,50,000/- being

advanced. Even his examination-in-chief also silent in this

regard. It is also an admitted fact that accused has sent

two cheques to the complainant by courier through D.W.2.

The first cheque was for Rs.2,50,000/-, i.e., cheque which

is under dispute in this case and another cheque sent after

one week for Rs.1,50,000/-, which is admittedly encashed

by the complainant. Ex.P1 is the cheque for Rs.2,50,000/-

and Ex.P7 is the statement of account pertaining to the

account of the complainant. Exs.P8 and 9 are income tax

returns and Ex.P10 is the copy of the civil contractor

licence. Ex.D1 is the statement of account belonging to the

accused and there is no serious dispute of the fact that the

cheque under Ex.P1 was returned for 'insufficient funds'. It

is also undisputed fact that the cheque was signed by the

accused. Hence, the initial presumption is in favour of the

accused under Section 139 of N.I.Act, but however, this

statutory presumption is rebuttable presumption. For

rebutting the said presumption, the accused need not

enter into the witness box and he can rebut the

presumption even on the basis of the available material

placed on record.

11. A perusal of the evidence of complainant

P.W.1, it is evident that he has all along simply asserted

that the hand loan was advanced for Rs.2,50,000/- in the

month of April, 2009. The complainant has not disclosed

the date of advancement of loan. In the year 2009,

Rs.2,50,000/- is not a small amount and it cannot be

presumed that complainant had forgotten the date.

Further, P.W.1 has not denied the fact that he was

entrusted by accused for execution of furniture work of his

house situated in Saptapur. He has also admitted that he

has encashed the cheque for Rs.1,50,000/- dated

24.07.2009, but he asserted that it was pertaining to

earlier loan transaction. It is to be noted here that the

cheque Ex.P1 itself is dated 16.07.2009. P.W.1 further

admits that on 16.07.2009 accused has sent cheque for

Rs.2,50,000/- and on 24.07.2009 he had sent another

cheque for Rs.1,50,000/- through courier. Admittedly, the

second cheque for Rs.1,50,000/- was encashed. The

complainant all along now claimed that it was pertaining to

earlier loan transaction but there is no reference of

encashment of subsequently issued cheque for

Rs.1,50,000/- in respect of earlier pending loan transaction

either in legal notice or in the complaint.

12. The complainant has placed reliance on the

evidence of P.W.2 and it is asserted that loan was

advanced in the presence of P.W.2, who claims to be an

eye-witnesses. P.W.2 deposed that loan was advanced in

his presence. In his examination-in-chief this witness also

asserts that loan was advanced in the month of April, 2009

itself, but no specific date is given. Very interestingly, this

witness in his examination-in-chief itself tried to give

explanation that Rs.1,50,000/- was paid by way of cheque

was pertaining to earlier transition that was not stated by

P.W.1 in his examination-in-chief. In the cross-

examination, this witness P.W.2 claimed that amount was

paid on 16.04.2009, which is first time he deposed in his

cross-examination. It is neither asserted in the complaint

nor in the evidence of the complainant nor in his

examination-in-chief and only for the first time in the

cross-examination he claimed that hand loan was

advanced on 16.04.2009. Further, in paragraph 3 of his

examination-in-chief P.W.2 claimed that, as Rs.1,50,000/-

hand loan advanced by the complainant to the accused

was repaid by him promptly, a loan of Rs.2,50,000/- was

advanced to him in April 2009. It is very interesting to

note here that this P.W.2 claimed that Rs.1,50,000/- hand

loan was repaid and as such, subsequently further hand

loan of Rs.2,50,000/- was advanced. But it is to be noted

here that encashment of the cheque for Rs.1,50,000/- was

subsequent to this transaction. It is alleged that in April

2009, hand loan was advanced, but repayment of

Rs.1,50,000/- was in the month of July 2009 by way of

cheque dated 24.07.2009. Hence, it is evident that P.W.2

is giving false evidence only in order to assist the

complainant. He does not know any transaction and his

own examination-in-chief clearly exposes him as he

claimed that hand loan of Rs.2,50,000/- was advanced as

earlier hand loan was repaid which was not the case of the

complainant and from records, it is also evident that

payment of Rs.1,50,000/- was subsequent.

13. Learned counsel for the complainant placed

reliance Ex.P7(a) wherein it is evident that complainant

has withdrawn a sum of Rs.2,52,000/- on 16.04.2009 from

his account. It is to be noted here that the complainant

has no where asserted the specific date of advancement of

loan. Further, according to him, after withdrawing

Rs.2,52,000/-, a sum of Rs.2,50,000/- was paid as hand

loan, but when he paid it is not forthcoming. This is first

time asserted in the arguments. Even if this fact is taken

into consideration, then what prevented him by issuing

cheque in the name of the accused itself is not at all

forthcoming and there was no need for him to withdraw

and hand over cash to the accused. He could have directly

issued a cheque in the name of the accused. Further, as

per the provisions of the Income Tax Act, any transaction

above Rs.20,000/- is required to be dealt through cheque

only. But the complainant claimed that he withdrew

Rs.2,50,000/- and repaid it to the accused, which cannot

be accepted. The financial capacity of the complainant may

not be the relevancy looking to his bank statements and at

the same time, the accused has sufficient funds and there

is no evidence that accused was in need of any amount.

14. Apart from that, the complainant has not

denied the fact that accused is financially sound person. He

has also not denied that accused entrusted him the

furniture work and it is the specific contention of the

accused that, initially the cheque was issued for

Rs.2,50,000/- towards furniture work executed by the

complainant and subsequently, as the work was only worth

of Rs.1,50,000/-, separate cheque was issued with a

request to return other cheque for Rs.2,50,000/-.

Admittedly, the cheque for Rs.1,50,000/- was encashed by

the complainant. The complainant initially denied that

payment of Rs.1,50,000/- towards furniture work, but later

tried to improve his version by claiming that it was

pertaining to repayment of earlier loan. When there was

earlier loan of Rs.1,50,000/- due as on April 2009, it is

hard to accept that he has again advanced hand loan of

Rs.2,50,000/- to the accused. He has not given any

explanation as to when this amount of Rs.1,50,000/- was

advanced. Admittedly, if the version of the complainant is

taken that repayment of Rs.1,50,000/- pertaining to earlier

hand loan, he would have referred it in the complaint and

in April 2009, when there was due of Rs.1,50,000/- in

respect of earlier hand loan, he would not have ventured

to advance further hand loan of Rs.2,50,000/-. Further, it

is also important to note here that, both Ex.P1 and the

cheque encashed for Rs.1,50,000/- were sent within a

span of one week only. Ex.P1 is dated 16.07.2009 and

other cheque encahed was dated 24.07.2009. The

evidence of D.W.2 supports the case of the accused. In the

cross-examination of D.W.2, a suggestion was made that

the complainant has advanced Rs.1,50,000/- on one

occasion and Rs.2,50,000/- on another occasion as hand

loan to the accused, which is not the case made out in the

complaint and this is only an improvement when the

accused has taken a defence. Apart from that, under the

provisions of Income Tax Act, such a transaction should be

by way of cheque, but that was also not followed. Even in

the income tax returns produced by the complainant, there

is no reference of both these transactions of Rs.2,50,000/-

or Rs.1,50,000/- in respect of hand loan as claimed by the

complainant. P.W.1 has also admitted that there is no

reference of these transactions in his income tax returns.

When the complainant is a contractor, he should have

mentioned the said aspect in his income tax returns, but

that was not done. Hence, the contention of the

complainant that Rs.2,50,000/- was advanced to the

accused by way of hand loan is not acceptable. On the

contrary, the defence of the accused that, it was issued

towards furniture work and since furniture work was worth

Rs.1,50,000/- only, the same was repaid by subsequent

cheque appears to be more possible. The accused need not

rebut the presumption on the principles of beyond all

reasonable doubt, but he can rebut the presumption only

on the basis of preponderance of probabilities. Looking into

the rival contentions and considering the evidence of

P.Ws.1 and 2, it is evident that their evidence is not

trustworthy and the defence of the accused is more

probable rather than the claim made by the complainant.

Hence, the presumption under Section 139 of N.I.Act is

rebutted by the accused. Then again burden shifts on the

complainant to establish the existence of legally

enforceable debt, but that is not forthcoming.

15. Learned counsel for the appellant has placed

reliance on the decision of the Hon'ble Apex Court in the

case of Rangappa Vs Sri Mohan reported in (2010) 11

SCC 441. In the said decision, the Hon'ble Apex Court has

observed as under:

"Negotiable Instruments Act, 1881 - S.139 Presumption under - Scope of - Held, presumption mandated by S.139 includes a presumption that there exists a legally enforceable debt or liability - However, such presumption is rebuttable in nature

- Criminal Trial - Proof - Presumptions - Generally.

"Negotiable Instruments Act, 1881 - Ss.138 and 139 - Purpose, relative scope and functioning of, explained - Rebuttable presumption under S.139 - Standard of proof for rebutting, stated - Manner in which defence can be raised by accused, outlined - Reliance on prosecution materials by accused to prove defence, held, permissible - Criminal Trial - Proof - Burden and Onus of proof - Reverse onus statutory clauses - Interpretation of

- Standard of proof in such cases."

16. There is no doubt that initially there is a

statutory presumption and reverse onus is on the accused.

Further, the Hon'ble Apex Court laid down guidelines

regarding reliance on prosecution materials by accused to

prove defence, which is held to be permissible, apart from

he entering into the witness box. In fact principles

enunciated in the above cited decision are helpful to the

accused rather than the complainant. The accused by

leading cogent evidence and by cross-examining P.Ws.1

and 2 has rebutted the presumption available in favour of

the complainant/prosecution under Section 139 of N.I.Act.

Hence, again onus shifts on the complainant to establish

the existence of legally enforceable debt, but he has not

placed any material in this regard.

17. Learned counsel for the respondent has placed

reliance on the decision of the Hon'ble Apex Court in the

case of Basalingappa Vs Mudibasappa reported in

(2019) 5 SCC 418. In the said decision, the Hon'ble Apex

Court held as follows:

"Debt, Financial and Monetary Laws -

Negotiable Instruments Act, 1881 0 Ss.118, 138 and 139 - Drawing of presumption under, and how said presumption can be rebutted - Standard of proof - While prosecution must establish its case beyond reasonable doubt, accused to prove a defence must only meet standard of preponderance of probabilities - Principles summarised."

18. The Hon'ble Apex Court has clarified that the

prosecution is required to establish its case beyond all

reasonable doubt, but accused to prove his defence only

by meeting the standard of preponderance of probabilities.

Further, it is held that, if the accused has lead a probable

defence, then burden would be on the complainant to

establish the same.

19. Considering all these facts and circumstances

of the case, it is evident that the complainant has failed to

establish the existence of legally enforceable debt and

accused rebutted the initial statutory presumption

available in favour of the complainant. The trial court after

marshalling oral and documentary evidence has come to a

proper conclusion regarding complainant having failed to

discharge regarding advancing hand loan and existence of

legally enforceable debt. Hence, the trial court has rightly

acquitted the accused and the judgment of acquittal

passed by the trial court is neither capricious, erroneous

nor suffers from any illegality. Hence, question of

interfering with the said judgment of acquittal does not

arise at all. Hence, considering all the grounds urged and

after perusing the entire material, I answer the point under

consideration in the negative and proceed to pass the

following:

ORDER

The appeal is dismissed.

The judgment and order of acquittal dated

21.10.2011 passed by the Principal Civil Judge and

Principal JMFC, Dharwad in C.C.No.691/2009 is

confirmed.

Sd/-

JUDGE MBS/-