Veerappa S/O Sayappa vs B.A. Chandramouli S/O B.G. ...
2021 Latest Caselaw 2448 Kant

                           1

            IN THE HIGH COURT OF KARNATAKA
                   KALABURAGI BENCH

         DATED THIS THE 28TH DAY OF JUNE, 2021

                        BEFORE

       THE HON'BLE MR.JUSTICE RAJENDRA BADAMIKAR

           CRIMINAL APPEAL NO. 200008/2016


BETWEEN:

VEERAPPA
S/O. SAYAPPA
AGE: 51 YEARS
OCC: BUSINESS
R/O. NARAYANAPUR AREA
GURUMITKAL TOWN
YADGIRI TALUK & DISTRICT
                                             ... APPELLANT

(BY SRI.J. AUGUSTIN, ADVOCATE)


AND:

B.A CHADRAMOULI
S/O. B.G. ANNAIAH
OCC: ENGINEER
R/O. # 81, SRI KUMAR SWAMY
TEMPLE ROAD (50 FEET ROAD)
MOUNT JOY EXTENSION,
HANUMANTH NAGAR
BENGALURU - 560 001.
                                      ... RESPONDENT

(BY SRI. SUNIL KUMAR P. BANGARI, ADVOCATE)

     THIS CRIMINAL    APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER DATED 19.11.2015 PASSED IN C.C. NO. 427/2011
BY THE CIVIL JUDGE AND JMFC AT YADGIRI AND
                              2

CONSEQUENTLY CONVICT THE RESPONDENT/ACCUSED AND
AWARD FINE AMOUNT.

     THIS CRIMINAL  APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT ON 18.06.2021, COMING ON FOR
'PRONOUNCEMENT OF JUDGMENT' THIS DAY, THE COURT
DELIVERED THE FOLLOWING:

                        JUDGMENT

The appellant herein is the complainant before the

Court of Civil Judge and JMFC at Yadgiri (hereinafter for

short, referred to as 'trial Court') has filed this appeal

under Section 378(4) of Cr.P.C. challenging the judgment

of acquittal dated 19.11.2015 passed by the trial Court in

C.C. No. 427/2011.

2. In order to avoid confusion, the parties herein

are referred with their original ranks before the trial

Court.

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

appellant/complainant has filed a complaint against the

respondent/accused under Section 200 of Cr.P.C., alleging

that the accused has committed an offence under Section

138 read with Section 141 of Negotiable Instruments Act,

1881 ( for short, 'N.I. Act'). The complainant contended

that, he and accused are good friends and they are doing

business and during business transaction, the accused has

on so many occasions, has taken hand loan from the

complainant as and when required and returned. It is

further alleged that, on one such occasion, i.e., on

10.01.2011, the accused obtained hand loan of

Rs.12,15,000/- for the purpose of higher education of his

daughter by name Dhatri, as she was studying in

Germany and he promised the complainant to return the

loan amount in six months. But, he failed to return the

loan amount. After six months, when the complainant

demanded to repay the loan amount, the accused started

post-poning the matter on one or other pretext and finally

the accused has issued a post-dated cheque bearing

No.702891 for Rs.12,15,000/- mentioning the date as

12.07.2011, drawn on Canara Bank Branch,

Hanumanthnagar Branch, Bangalore, pertaining to his

account. Then the complainant has presented the said

cheque on 12.07.2011 in the State Bank of Hyderabad,

Gurumitkal Branch and the said cheque returned on

12.08.2011 with an endorsement "Funds Insufficient".

Then the complainant made a demand for payment of

cheque amount of Rs.12,15,000/- through Lawyer's notice

dated 24.08.2011, which was sent by registered post.

The accused did not comply the demand and hence, it is

alleged that the complainant has filed a complaint under

Section 138 of the N.I Act.

4. After registering the complaint, the learned

Magistrate has recorded the sworn statement of the

complainant and considering the material evidence placed

before him, he has taken cognizance and issued process

against the accused. In pursuance of the summons,

accused has appeared before the learned Magistrate and

was enlarged on bail. Then the prosecution papers were

also furnished to the accused. The plea of the accused was

recorded for the offence under Section 138 of the N.I. Act

and accused pleaded not guilty. Then the complainant

was got examined himself as PW.1 and placed reliance on

five documents marked as Ex.P1 to Ex.P5. Thereafter, the

statement of accused under Section 313 of Cr.P.C. was

recorded and the case of the accused was of total denial.

The accused was also got examined himself as DW.1 and

placed reliance on a document as per Ex.D1.

5. After hearing the parties on both sides, the

learned Magistrate has framed the following points for

consideration:-

  i)         Whether the complainant proves beyond all
             reasonable      doubt       that   the   accused      has
             committed     the   offence        punishable    under
             Section 138 of N.I.Act ?


  ii)        What order?


        6.     Thereafter,    the    learned          Magistrate    after

appreciating the evidence led by the parties, vide his

judgment dated 19.11.2015, answered Point No.1 in the

negative and resultantly acquitted the accused/

respondent herein. Being aggrieved by this order of

acquittal, the complainant has filed this appeal under

Section 378(4) of Cr.P.C.

7. Heard the learned counsel appearing for the

appellant as well as the counsel for the respondent.

Perused the records.

8. Learned counsel for the appellant/complainant

argued that the respondent/accused has admitted

issuance of cheque, his signature on the alleged cheque

and all technicalities have been complied. However, the

trial Court has acquitted the accused/respondent without

properly appreciating the evidence. He contended that the

trial Court has acquitted the accused only on the ground

that the complainant has not established his capacity to

pay such a huge amount as hand loan. But, it failed to

consider Ex.D1, where there is a reference that, he has

stood as surety for accused to the tune of Rs.30,00,000/-

and if he had no capacity, his surety would not have been

accepted by the Bank. He contended that Ex.D1 ie., the

document produced by accused establish his financial

capacity, as he is the guarantor to the accused and the

signature on the cheque is not at all disputed. Hence, he

contended that the documentary evidence (Ex.D1)

establish his capacity to advance the loan and sought for

allowing the appeal by convicting the accused/respondent.

9. Per contra, learned counsel for the

respondent/accused contended that, the alleged cheque

was issued only for the purpose of development of the

company and the complainant had monthly income of

hardly Rs.20,000/- and as such question of he advancing

a huge loan of Rs.12,15,000/- does not arise at all. He

further argued that, he has made a contradictory

statement regarding the date of issuance of cheque and

though he claimed that the amount is also paid out of the

sale proceeds of the land, no material is placed in this

regard, except a bald assertion. Hence, he argued that,

there is no legally recoverable debt and the presumption

under Section 139 of the N.I. Act is rebutted by the

accused/respondent and as such the burden was casted

on the complainant to establish his financial capacity,

which he has failed to do so. Hence, he argued that the

judgment of acquittal is in accordance with law and sought

for dismissal of the appeal.

10. After having heard the arguments and

perusing the records of the trial Court, in this appeal, the

following point would arise for my consideration:

'Whether the judgment of the trial Court calls for any interference by this Court?" .

11. The complainant has asserted that, he has

advanced the loan of Rs.12,15,000/- to the accused.

According to him, loan was advanced on 10.01.20211.

Further, the contention of the complainant is that, as the

accused failed to repay the loan amount, he demanded

the same and the accused has given a post-dated cheque.

At the out-set, the complainant has not stated as to on

which date, the cheque was handed- over to him. No

doubt, the legal requirement of issuance of notice etc.

have been complied. Further, the accused has not

disputed the fact that the cheque belongs to him and

bears his signature. As such, the presumption under

Section 139 of the N.I. Act required to be drawn.

However, it is not a conclusive presumption, but a

rebuttable presumption. As per Section 139 of the N.I.

Act, the complainant being the holder of the cheque and

signature on the cheque having not been denied by the

accused, the presumption shall be drawn that, the cheque

was issued for discharge of any debt or other legal

liability. However, the accused can rebut the said

presumption regarding non-existence of liability, but at

the same time, the complainant (prosecution) is required

to prove his case beyond all reasonable doubt. But at the

same time, the accused is not required to rebut the

presumption with the same standard of proof and he can

rebut the presumption on the basis of preponderance of

probability. That apart, the accused for rebutting

presumption, need not to lead his own evidence and he

can also rebut the presumption on the basis of the

evidence placed by the complainant himself.

12. At this juncture, it is worth to note here a

decision of the Hon'ble Apex Court in Krishna

Janardhan Bhat Vs. Dattatraya G. Hegde [(2008) 4

SCC 54], wherein it has been held that, for discharging

the burden of proof placed on him by the Statute, the

accused need not examine himself and he may discharge

the burden on the basis of the materials already brought

on record. The Hon'ble Apex Court has further observed

that the prosecution must prove the guilt of the accused

beyond all reasonable doubt, whereas the standard of

proof so far as to prove the defence on the part of the

accused is on preponderance of probabilities. Always

when the presumption is raised, the onus is on the

accused to raise a probable defence for rebutting the

presumption, as observed by the Hon'ble Apex Court in

(2010) 11 SCC 441 (Rangappa Vs. Sri Mohan).

13. In the light of the above settled principles, now

the evidence of the complainant is required to be

assessed. In his examination chief, the complainant has

reiterated the factual aspects as alleged in the complaint.

Ex.P1 is the cheque and Ex.P2 is the endorsement issued

by the Bank, while Ex.P3 is the postal receipt for having

sent the notice by registered post. Ex.P4 is the postal

acknowledgement and Ex.P5 is a copy of legal notice,

relied upon by the complainant.

14. In the cross-examination, the complainant

claimed that, he is working in a Medical Store and his

monthly salary is Rs.10,000/-. Further he claims that, he

owns 5.00 acres of land and he lent three houses on rent

and getting monthly income of Rs.10,000/-. If this

version is taken into consideration, his monthly income is

around Rs.20,000/-. He claimed that, he paid

Rs.12,15,000/- to the accused/respondent from sale

proceeds of his land. But, he has not produced any

document to show that, he did own any land and for

having sold it. He is unable to disclose the sale

consideration of the land also. He also claimed that, he

handed-over the sale consideration to other persons and

after getting it from them, he handed-over it to the

accused. He further claimed that, some amount is

received by him from his sister, which he has used for

advancing loan to accused. But, he did not examine his

sister also. There is no document to show that, he

possessed 5.00 acres of land and the said land was sold,

even prior to alleged transaction.

15. In the cross-examination, he admitted that, he

is also a Director in the Solar System Company and he

possessed 20% of sale. However, he claims that, though

he was having 20% of shares, the accused has not given

any profit from the Company till today and since he is a

formal Director, as out of love and affection, he was

adopted by accused as one of the Directors. He never

said that, he has contributed for that Company, wherein

he was working as a Director. Hence, cross-examination

of PW.1/complainant discloses that, his monthly income is

hardly Rs.20,000/- and it is hard to accept that, he could

mobilise a huge amount of Rs.12,15,000/- for advancing

loan, that too without any security. No evidence is

placed before the Court to show that he was possessing

land and he sold the land.

16. Learned counsel for the appellant/complainant

has invited attention of the Court to Ex.D1, which is

Education Loan Sanction Communication issued by State

Bank of Mysore to accused, wherein the complainant's

(Veerappa Pyati) name is shown as a guarantor at Sl.

No.4, as he having net means of Rs.30.05 lakhs. Hence,

he argued that, when he was capable of giving guarantee

to the tune of Rs.30,00,000/-, his financial position is

required to be taken into consideration. But, the financial

position for acting as guarantor is different from the

financial capacity to advance loan in cash. Hence, Ex.D1

does not come to the aid of the complainant in any way.

17. The learned counsel for the appellant has

placed reliance on a decision reported in AIR Online

2021 SC 82 (M/s.Kalamani Tex v.

P.Balasubramanian). But this is again in respect of

reverse onus clause and therefore in the present case on

hand, the respondent/accused by cross-examining the

complainant has elicited that the complainant/appellant

does not have financial capacity to advance the loan.

When his financial status itself is not established and

when the respondent/accused has rebutted the

presumption by creating a dent in the case of prosecution

the onus again shifts on the complainant/appellant to

prove his financial status, but he has failed to discharge

that onus. As such, in view of the decisions as referred

above, the principles enunciated in the above cited

decision relied by the learned counsel for the appellant

does not come to the aid, as in the said case the accused

has only raised the defence, which do not inspire the

confidence and did not meet the standard of

preponderance of probability. But, in the instant case the

accused/respondent has discharged his burden on the

basis of preponderance of probability.

18. The complainant has also not stated the date

of issuance of cheque. In this context, learned counsel

for the respondent/accused has relied on an unreported

decision of the Hon'ble Apex Court in Criminal Appeal

No.363/2019 (arising out of SLP (Crl.)

No.8641/2018) between Basalingappa and

Mudibasappa, wherein, the Hon'ble Apex Court has dealt

with the issue in detail and held that, the presumption

can be rebutted on the basis of preponderance of

probabilities and issued certain guidelines to assess the

same. In the instant case, the complainant except making

a bald assertion regarding his financial capacity to

mobilise funds of Rs.12,15,000/-, has not produced any

other document in that regard. Even he is unable to say

as to what was the sale consideration of his land, which

disclose that the complainant does not have any financial

capacity to mobilise a huge amount of Rs.12,15,000/-.

The loan was said to have been advanced in 2011, and in

2011, Rs.12,15,000/- was a huge amount. Even though

he claims that, he was a Director of Solar System

Company along with accused, but, he has not invested a

single pai. Under such circumstances, the contention of

the learned counsel for the appellant that, 'Ex.D1

establish the financial capacity of the

appellant/complainant', holds no water, as it is only a

guarantee latter and it does not establish his financial

capacity to advance loan. Further, the said letter was of

the year 2009 and the alleged transaction is of the year

2011. Learned counsel for the appellant/complainant has

contended that, the accused/respondent has admitted

issuance of the cheque and asserted that the cheque was

issued towards renovation of the Company. But, the

cheque was issued in his name and pertaining to his

personal account and it is not the cheque issued on behalf

of the company and there is no signature of other

directors. This does not have any relevance, as the

primary burden is the complainant to prove his financial

capacity, once his financial status to advance such a huge

amount is disputed by the accused. Hence, in view of the

decisions referred above, it is evident that the

complainant has failed to establish his financial capacity

to advance loan. Hence, it cannot be presumed that the

cheque was issued in discharge of legally enforceable

debt or liability. As such, the presumption under

Section 139 of the N.I. Act stands rebutted and the

accused by cross-examining the complainant, has

rebutted the said presumption. As such, the

appellant/complainant has failed to substantiate the

contention that the cheque was issued towards legally

enforceable debt, which is a mandatory requirement for

attracting the offence under Section 138 of the N.I. Act.

Hence, the learned Magistrate is justified in answering

point under consideration in the negative and the

principles enunciated in the above cited decisions relied

on by the learned counsel for the respondents are directly

applicable to the facts and circumstances of the case in

hand.

19. The learned counsel for appellant has further

placed reliance on the unreported decision of the High

Court in Crl.A.No.2563/2008 dated 06.09.2013

(Chandrashekhar v. Smt.Prathiba). But the facts and

circumstances of the said case are entirely different and

the said decision is not applicable to the case on hand, in

view of the decision of the Hon'ble Apex Court reported in

2008(4) SC 54 and the decision of the Hon'ble Apex Court

in Crl.A.No.363/2019 (arising out of SLP Criminal

No.8641/2019).

20. Considering the facts and circumstances of this

case, I am constrained to answer the point under

consideration in the negative and proceed to pass

following:

ORDER

The appeal is dismissed by confirming the

judgment of acquittal dated 19.11.2015 passed in

C.C.No.427/2011, by the Court of the Civil Judge, Yadgiri.

Send back the Trial Court Records to Trial Court

immediately with a certified copy of this judgment.

Sd/-

JUDGE

KGR*