Sri. M Nagaraju vs Sri. Lokesh Bagal
2021 Latest Caselaw 3525 Kant

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

    DATED THIS THE 26TH DAY OF OCTOBER, 2021

                         BEFORE:

   THE HON'BLE MR. JUSTICE MOHAMMAD NAWAZ

        CRIMINAL APPEAL NO.1194 OF 2018

BETWEEN:

SRI M. NAGARAJU,
S/O LATE MAYANNAGOWDA
AGED ABOUT 62 YEARS
R/AT NO.9, 1ST 'A' CROSS, 24TH MAIN
MARENAHALLI, J.P.NAGAR 2ND PHASE
BENGALURU - 560 078                           ...   APPELLANT

[BY SRI C.S. NAGENDRA, ADVOCATE]

AND:

SRI LOKESH BAGAL
S/O G.L. RAMA RAO
AGE: 49 YEARS
PROPRIETOR, R.K. ENTERPRISES
NO.120, S-12,
PAMADI CHAMBERS
DVG ROAD, BASAVANAGUDI
BENGALURU - 560 004                     ...     RESPONDENT

[BY SRI HARISH H.V, ADVOCATE]

                           ***

      THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CR.P.C., PRAYING TO SET ASIDE THE ORDER/JUDGMENT
DATED 30.04.2018 PASSED BU THE XII AND XXXVII
ADDITIONAL     CHIEF   METROPOLITAN     MAGISTRATE    AT
BENGALURU IN C.C.NO.7851/2017 - ACQUITTING THE
RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF
N.I.ACT.
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     THIS CRIMINAL APPEAL COMING ON FOR ADMISSION,
THIS DAY THE COURT DELIVERED THE FOLLOWING:

                         JUDGMENT

This is an appeal preferred by the complainant against the

judgment and order of acquittal passed by the trial Court in

acquitting the respondent/accused in respect of an offence

punishable under Section 138 of the Negotiable Instruments Act,

1881 (for short N.I. Act).

2. Heard the learned counsel for appellant/complainant

and respondent/accused and perused the evidence and material

on record.

3. The case of the complainant is that the complainant

and accused are well known to each other and they are friends.

During second week of April 2016, accused approached him and

requested for financial assistance to the tune of Rs.7,25,000/- to

meet his domestic problems and assured to repay the same

within six months. Believing his version, complainant mobilized

the funds and paid the said amount by way of cash and while

borrowing the amount, accused executed an on demand

promissory note in favour of the complainant. After the lapse of

stipulated period of time, when the complainant approached the

accused for repayment of the hand loan, accused issued a

cheque bearing No.340046 dated 04.11.2016 for a sum of

Rs.7,25,000/- drawn on Corporation Bank, Padmanabhanagara

Branch, Bengaluru in favour of the complainant with instructions

to encash the said cheque on due date and took back the on

demand promissory note. When the said cheque was presented

for encashment through his banker namely State Bank of

Mysore, J.P. Nagara Branch, Bengaluru, it was dishounoured with

a bank endorsement "fund insufficient" on 04.01.2017.

Thereafter, a legal notice was issued on 12.01.2017 and inspite

of receipt of the same on 18.01.2017 no amount was paid. On

the other hand, evasive and untenable reply was given on

01.02.2017 by suppressing the true and real facts. Hence, it is

alleged that the accused has committed an offence punishable

under Section 138 of N.I. Act.

4. It is the specific defence of the accused that he had

never issued the cheque and the loan transaction as alleged by

the complainant has never taken place and there is no legal

debt. It is stated that the complainant was running a chit

business and for security purpose in connection with the said chit

transaction, he obtained two blank/unfilled cheques bearing

No.304067 and 340046 from the accused and later misused the

said cheques.

5. In order to establish the guilt of the accused, the

complainant got examined himself as PW1 and got marked

Exs.P1 to P6. The accused got examined himself as DW1 and got

marked Exs.D1 to D9. The Trial Court after considering the

entire material and evidence on record and after giving reasons,

acquitted the accused, which is under challenge in this appeal.

6. It is contended by the learned counsel for the

appellant that the cheque at Ex.P1 belongs to the accused, which

is not in dispute and the signature is also not in dispute and

therefore the presumption mandated by Section 139 that there

exists a legally enforceable debt and liability, attracts. It is

contended that the accused has raised a contention that the

cheque was issued for security purpose in respect of a chit

transaction, however, no documents relating to the chit

transaction and no particulars have been placed by the accused

and therefore, the presumption has not been rebutted by the

accused. He would also contend that the trial court was not

justified in acquitting the accused, observing that there is change

in handwriting with regard to the contents of the cheque. He

would place reliance on the judgment of the Hon'ble Apex Court

in 'Bir Singh v/s. Mukesh Kumar' (Crl.A.Nos.230-231 of 2019,

dated 06.02.2019), wherein it is held that 'if a signed blank

cheque is voluntarily presented to a payee, towards some

payment, the payee may fill up the amount and other

particulars. This in itself would not invalidate the cheque. The

onus would still be on the accused to prove that the cheque was

not in discharge of a debt or liability by adducing evidence.' He

would also place reliance on a decision of this court in the case of

'M. Krishnappa v/s. K. Kumar' reported in 2021 ACD 127 (KAR),

to contend that merely disputing the lending capacity of the

complainant is not sufficient unless the presumption is rebutted,

in accordance with law.

7. The learned counsel for the accused has contended

that the trial court having considered the entire evidence and

material on record and after giving cogent reasons, has acquitted

the accused. Hence, being an appeal against acquittal, there is

no justifiable grounds to interfere with the judgment and order

passed by the trial court. He would contend that the trial court

has taken into consideration not only the fact that the

complainant has failed to adduce any evidence by placing

acceptable documents to show his lending capacity, but also

considered the fact that the cheque was not issued in discharge

of a legally enforceable debt and therefore he contends that

there are no grounds to interfere with the impugned judgment

and order passed by the trial court.

8. According to the complainant, at the time of lending

a cash of Rs.7,25,000/-, he received an on demand promissory

note from the accused and when the cheque was issued, accused

took back the on demand promissory note. It is contended by

the learned counsel for the respondent that the case of the

complainant that the accused has issued an on demand

promissory note and then took it back cannot be accepted for the

reason that no person will return the on demand promissory note

back to the accused unless the amount due was paid. He has

contended that except the bald statement there is no legal

evidence adduced to show that the accused had executed an on

demand promissory note.

9. The accused who is examined as DW1 has stated

that, towards security, two cheques in respect of a chit

transaction was received by the complainant from him and after

the transaction was over, when the accused requested the

complainant to return the cheque, he informed that both the

cheques have been destroyed. According to him, the complainant

and one Suresh misused the said two cheques and filed two

different complaints. He has got marked Exs.D1 to 9 namely the

certified copies of the documents produced in CC No.7846/2017.

The complainant has denied that he knows one Suresh.

According to the complainant, the contents of the cheque in

question was filled up by the accused. The Trial Court has taken

into consideration the evidence adduced in CC No.7846/2017,

wherein the complainant by name Suresh has admitted that both

the cheques are filled up by him.

10. If a signed blank cheque is voluntarily presented to a

payee, the payee himself can fill up the payment and other

particulars. However, it is the specific case of the complainant

that cheque was issued for a payment of Rs.7,25,000/- by

accused by filling the contents. As per the evidence adduced in

CC No.7846/2017 by the complainant in the said case namely

Suresh, he has clearly admitted in the cross-examination that

the contents of both the cheques are filled by him. PW1 in his

cross-examination has admitted that he is not aware as to who

filled the name and amount mentioned in the cheque. Hence, the

case of the complainant that the accused issued a cheque for

asum of Rs.7,25,00/- can not be believed.

11. It is also the contention of the accused that after

completing the chit transaction, when he requested the

complainant to return the cheques, he was informed that the

cheques are torn and thus destroyed. The trial court on

observing the cheque - Ex.P1, has noticed that the cheque was

torn on the right side and some whitener was put and pasted.

The complainant/PW1 has expressed that he is unaware of the

same, which also gives rise to a suspicion about the case as

putforth by him.

13. No doubt, there is a presumption in favour of the

holder of the cheque under Sections 118 and 139 of N.I. Act,

that when a cheque is issued by the accused, the same is

presumed to be issued in discharge of a debt or other liability.

However, the said presumption is rebuttable one. In the instant

case, the accused has been able to rebut the presumption.

Further, it is necessary for the complainant in a reasonable

manner to show the capacity to lend a huge amount of

Rs.7,25,000/-. In the case on hand, PW1 has admitted that

though he was doing bar and restaurant business in the name

'Divya Wines' and he is also having agricultural income etc., he

has not placed a single document to prove the same. Further, he

has admitted that he has not shown the amount mentioned in

the cheque in the income tax returns. In that view of the matter,

the trial court has come to the conclusion that the complainant

has not established that the amount mentioned in the cheque

was in connection with any legally enforceable debt. There is no

illegality or perversity in the order passed by the trial. Hence, the

appeal is dismissed.

Sd/-

JUDGE

snc