M/S Jai Matha Finance vs Sri Susheer Kumar
2022 Latest Caselaw 2876 Kant

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       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 21ST DAY OF FEBRUARY, 2022

                        BEFORE

    THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR

             CRIMINAL APPEAL No.945/2016
BETWEEN:

M/S JAI MATHA FINANCE
ASSISI BUILDING, DON BOSCO HALL
BALMATTA ROAD, MANGALURU-575 001
REPRESENTED BY ITS MANAGING PARTNER
HEMACHANDRA, S/O LATE K. SANJEEVA
AGED ABOUT 43 YEARS
R/AT BROOK LANE,
FALNIR, MANGALURU-575 002, DK
                                            ....APPELLANT
(BY SRI. A.C. NAGARAJ, ADVOCATE)

AND:

SRI. SUSHEER KUMAR
S/O LATE R.D. SUVARANA, ACCOUNTANT
AGED ABOUT 60 YEARS
KARNATAKA RAJYA KAIGARIKA BANK NIYAMITHA
BALMUTT ROAD
MANGALURU-575 001
                                       .... RESPONDENT
(BY SRI. SHASHIKANTH PRASAD, ADVOCATE)

      THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT DATED
18.11.2015 PASSED BY THE JMFC (V-COURT) MANGALURU,
D.K., IN C.C.NO.122/2013, 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

Though this appeal is listed for admission, with the consent

of the learned counsel appearing for the parties on both sides,

the same is taken-up for final disposal.

2. This appeal is filed by the appellant/complainant

against the judgment of acquittal dated 18.11.2015 passed by

JMFC-V, Mangaluru, DK, in C.C. No.122/2013, whereby the

learned Magistrate has acquitted the respondent/accused for the

offence punishable under Section 138 of Negotiable Instruments

Act, 1881 (' N.I. Act' for short).

3. For the sake of convenience, the parties herein shall

be referred with the original ranks occupied by them before the

trial Court.

4. The brief facts of the case are that, the complainant

is a partnership firm carrying on money lending business and it

is represented by the Managing Partner. The accused is

working as an Accountant at Karnataka Rajya Kaigarika

Sahakara Bank Niyamitha, Balmatta Road, Mangaluru and had

good acquaintance with the complainant. Accused has availed

loan of Rs.1,50,000/- by way of cash on 02.04.2012 from the

complainant by executing 'On Demand Promissory Note'. On

22.10.2012, the accused/respondent herein has issued a cheque

(Ex.P1) in favour of the complainant-Firm for Rs.1,58,000/-

towards discharge of the said loan and when the said cheque

was presented for encashment, it bounced for 'Insufficient

Funds'. As such, the complainant has issued a legal notice and

in spite of service of legal notice, the accused did not repay the

loan amount and hence, the complainant has filed a private

complaint under Section 200 of Criminal Procedure Code, 1973

(Cr.P.C' for short).

5. The learned Magistrate after recording the sworn

statement, has issued process against accused and the accused

has appeared through his counsel and was enlarged on bail. The

accusation was read-over and explained to accused and he

pleaded not guilty.

6. The so-called Managing Partner of the appellant/

complainant-Firm was examined as PW.1 and the complainant

has also placed reliance on Thirteen documents marked at

Exs.P1 to P13. After conclusion of evidence of prosecution, the

statement of accused under Section 313 of Cr.PC was recorded

to enable the accused to explain the incriminating evidence

appearing against him in the case of prosecution. The case of

accused is of total denial and he got examined himself as DW.1.

7. After hearing the learned counsels on both sides and

on perusing the documents available on record, the learned

Magistrate has found that the complainant has failed to prove

the guilt of accused for the offence punishable under Section

138 of N.I. Act and as such, acquitted him of the charge levelled

against him. Being aggrieved by this judgment of acquittal, the

complainant has filed this appeal under Section 378(4) of

Cr.PC.

8. Heard the learned counsels appearing for the

appellant and the respondent. Perused the records.

9. Learned counsel for appellant would contend that the

judgment of acquittal passed by the trial Court is perverse,

erroneous and based on surmises. He would also contend that

the legal notice issued to the accused is served on him and the

same is not replied and accused has also executed 'On Demand

Promissory Note' for a sum of Rs.1,58,000/- as per Ex.P6. He

would also contend that, since cheque and signature have been

admitted, the presumption is in favour of the complainant and

further he contends that accused has failed to rebut the

presumption and as such, sought for allowing the appeal by

convicting the accused/respondent herein.

10. Per contra, the learned counsel for

accused/respondent would contend that, the complainant-Firm is

alleged to be a registered Financial Corporation and no records

have been produced to show that there is any transaction in the

form of agreement between the parties. He would also contend

that, no documents have been produced regarding statement of

accounts pertaining to account of accused to show that, as on

date issuance of cheque under Ex.P1, the balance was

Rs.1,58,000/- and no documents have been produced to show

that loan of Rs.1,50,000/- was advanced to accused on

02.04.2012. Further, he would also contend that the

presumption stands rebutted in view of evidence on record and

burden is on the complainant to establish the existence of

legally enforceable debt and the same is not done and as such,

he would contend that the trial Court has properly appreciated

the oral and documentary evidence and arrived at a just

decision. Hence, he would request for dismissal of the appeal.

11. Having heard arguments advanced by the learned

counsels appearing on both sides and on perusing the records, it

is important to note here that the complainant is a Finance

Company. In that view of the matter, it is evident that, it is a

registered Finance Company doing money lending business. If

that is the case, then PW.1, who claims to be an authorized

officer, is required to produce an Authorization Certificate or on

the contrary the resolution of the Finance Company to show

that PW.1 was authorized to lodge complaint and to prosecute

the matter. But, no such documents are forthcoming. Hence,

the authority of PW.1 to prosecute the matter itself is in dispute.

12. PW.1 in his examination-in-chief has specifically

deposed regarding availment of loan of Rs.1,50,000/- by

accused on 02.04.2012. However, in cross-examination, he

admitted that in the statement of accounts (Ex.P9) there is no

reference of advancement of loan of Rs.1,50,000/- to accused.

On contrary, he simply deposes that, they have got executed an

'On Demand Promissory Note' ie., Ex.P6. He also deposes in

cross-examination that, they have charged interest at the rate

of 16% per annum and in Ex.P6 there is also a reference

regarding interest to be paid at the rate of 16% per annum.

Very interestingly, it is to be noted here that, all along it is

claimed that, amount is advanced by way of cash. It is relevant

to note here that the complainant- Company is a Registered

Financial Institution. Under such circumstances, question of

complainant-company disbursing the loan amount by cash does

not arise at all and in such case, the amount should have been

transferred to the account of accused, but that is not

forthcoming.

13. Apart from the above, if at all there is a loan

transaction between the complainant and accused, there should

be a loan agreement between the parties. But, the complainant

has not produced any loan agreement and the cross-examination

of PW.1 reveals that, they have only obtained 'On Demand

Promissory Note'. Further, PW.1 has admitted that no

documents are available to show that Rs.1,50,000/- was

withdrawn from any Bank on 02.04.2012. This clearly discloses

that no material piece of evidence is placed by the complainant

to show that the loan of Rs.1,50,000/- was disbursed to accused

by the complainant on 02.04.2012. Even the complainant has

not maintained statement of accounts pertaining to accused.

Except Ex.P6, no other document is forthcoming in this regard

and Ex.P6 should be coupled with some documents regarding

disbursement of loan, but that is not available. Further, Ex.P7

to Ex.P10 do not disclose the statement of account pertaining to

account of accused. Even this daily statements are not certified

in the manner provided under the Banking Rules and

Regulations. Hence, it is evident that, PW.1 is not an

authorized person and there is no document to show that the

alleged loan was disbursed on behalf of the complainant-Finance

Institution to the accused. Ex.P13 is placed as reliance. But, it

simply discloses that, it is a Deed of Unregistered Partnership.

When the loan documents are not produced before the Court and

documents pertaining to disbursement of loan amount were

with-held by the complainant, an adverse inference is required

to be drawn against the complainant. Hence, the evidence

clearly discloses that presumption available in favour of the

complainant is rebutted by accused. The rebuttal need not be by

accused entering into witness-box and even by way of cross-

examination, accused can rebut the presumption. In the instant

case, the evidence clearly discloses that the presumption

available in favour of complainant stands rebutted. No

documents have been forthcoming for disbursement of loan of

Rs.1,50,000/- as claimed by the complainant. Further, an

authorization also not forthcoming for prosecuting the matter.

14. Under these circumstances, the complainant has

failed to establish that, accused having availed loan of

Rs.1,50,000/- has issued the cheque under Ex.P1 having

knowledge that, he had no sufficient funds in his account and

thereby committed an offence under Section 138 of N.I. Act. The

learned Magistrate has appreciated all these facts in a proper

perspective and has rightly acquitted the accused of the said

offence. The impugned judgment is neither perverse nor

arbitrary so as to call for any interference by this Court. Under

these circumstances, the appeal fails and accordingly, I proceed

to pass the following:-

ORDER

The appeal is dismissed. The judgment of acquittal dated 18.11.2015 passed by the JMFC-V, Mangaluru, D.K., in C.C. No.122/2013, stands confirmed.

Sd/-

JUDGE

KGR*