Sri K P Prakash vs Sri K Prasanna Kumar
2022 Latest Caselaw 7217 Kant

       IN THE HIGH COURT OF KARNATAKA AT BENGALURU

           DATED THIS THE 05TH DAY OF MAY, 2022

                           BEFORE

           THE HON'BLE MR. JUSTICE S. RACHAIAH

             CRIMINAL APPEAL NO.1020 OF 2011


BETWEEN:

SRI K.P. PRAKASH,
S/O LATE PUTTASWAMY GOWDA,
AGED ABOUT 49 YEARS,
R/AT NO.39,
3RD CROSS,
CHOLARAPALYA,
BANGALORE - 560 023.
                                                   ... APPELLANT
(BY SMT. P.V. KALPANA, ADVOCATE/AMICUS CURIAE)

AND:

SRI K. PRASANNA KUMAR,
S/O KAMBAIAH,
AGED ABOUT 44 YEARS,
CHOWDESWARI EDUCATION SOCIETY (R),
ITTAMADU,
KATHRIGUPPE,
BANGALORE - 560 085.

AND ASLO AT:
NO.115/2,
7TH 'A' LINK ROAD,
BANASHANKARI III STAGE,
NEW KEMPEGOWDA LAYOUT,
KATHRIGUPPE,
BANGALORE - 560 085
                                                 ... RESPONDENT
(BY SRI. LEELADHAR H.P., ADVOCATE)
                                      2




      THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED 27.08.2011
PASSED     BY    THE   XXII   ACMM   &   XXIV   ASCJ,    BANGALORE   IN
C.C.NO.27327/2007 - ACQUITING THE RESPONDENT/ACCUSED FOR
THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT.


      THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED
ON 01.04.2022, COMING ON FOR PRONOUNCEMENT OF JUDGMENT,
THIS DAY, THE COURT DELIVERED THE FOLLOWING:-



                              JUDGMENT

This appeal is filed by the complainant / appellant against

the impugned judgment and order of acquittal passed in

C.C.No.27327/2007 dated 27.08.2011 passed by the learned

XXII ACMM & XXIV ASCJ, Bangalore, wherein the trial Court

acquitted the accused / respondent for the offence under section

138 of N.I. Act.

2. Brief facts of the case are as under:-

It is the case of the appellant/complainant that the

respondent / accused had borrowed a sum of Rs.4 lakhs in the

first week of December 2006, promising to repay the same

within six months. The Respondent borrowed the loan from the

Appellant to extend the class building of the school and to

purchase furniture. In lieu of having received the amount from

the Appellant, the Respondent has issued a cheque bearing

No.232856 dated 25.06.2007 for a sum of Rs.4 lakhs drawn on

Central Bank of India, Kathriguppe, Bengaluru.

3. When the Appellant presented the said cheque

through his banker on 05.07.2007, he received a message from

the Bank that the cheque had been dishonored, with a shara as

"funds insufficient". The Appellant had issued a legal notice on

03.08.2007 both by RPAD and UCOP. Despite the service of

notice, the respondent neither replied nor paid the cheque

amount. Hence, the appellant/complainant has lodged the

complaint before the trial Court.

4. The trial Court recorded the sworn statement of the

Appellant and registered the case as Criminal Case

No.27327/2007. After that, the Respondent appeared before the

Court on 29.05.2010 and executed the bail bond. The trial Court

recorded the Respondent's plea in the open Court and explained

to him in the language known to him. The Respondent denied

the plea and claimed to be tried.

5. To prove the case, the appellant / complainant had

examined himself as PW.1 and also got examined one more

witness as PW.2. He got marked Ex.P1 to Ex.P11.

On the other hand, the respondent / accused has

examined himself as DW.1, but no documents were marked

through him.

6. Heard the learned counsel for the parties.

7. Smt.P.V.Kalpana, learned Amicus Curiae appearing

for the Appellant, has vehemently contended that the

Respondent has issued a cheque in lieu of the amount borrowed

from the complainant/Appellant. The cheque, the signature, and

the correction made have been admitted by him during the

cross-examination. The trial Court committed an error in not

raising the presumption as envisaged under section 139 of

Negotiable Instruments Act (hereinafter referred to as "N.I.

Act").

8. Learned Amicus Curiae further contended that even

though the Respondent denied the transaction with the

Appellant, that itself would not be sufficient to rebut the

presumption as to how the signed cheque had reached the

Appellant. The Respondent contended that he had borrowed a

sum of Rs.50,000/- from the mother-in-law of the Appellant, and

he has cleared the amount. In spite of having cleared the

amount which he has borrowed from the mother-in-law of the

Appellant, it has been misused by the complainant. The cheque

in question had been issued for security. The mere allegation

about the transaction would not be sufficient to rebut the

presumption. Hence, the Respondent is entitled to repay the

amount mentioned in Ex.P1 -cheque. As such, learned Amicus

Curiae sought to allow the appeal.

Learned Amicus Curiae relied on the judgment of the

Hon'ble Supreme Court in the case of ROHIT BHAI JIVANLAL

PATEL vs. STATE OF GUJARAT & Another, reported in AIR

2019 SC 1876.

9. Per contra, Sri.Leeladhar H.P., learned counsel for

the Respondent, submits that the cheque in question had been

issued as collateral security to the mother-in-law of the

Appellant. The mother-in-law of the Appellant died after the

Respondent cleared the loan amount which he had borrowed

from her. The cheque had not been returned to the Respondent

since she died. Taking advantage of the death of the mother-in-

law, the Appellant has filled the cheque for Rs.4 lakhs and filed

a complaint which the Respondent does not admit. The

Respondent has not made any transaction with the Appellant

herein and the question of liability to repay the cheque amount

would not arise at all at any point of time. Hence, learned

counsel for the Respondent sought to dismiss the appeal filed by

the Appellant.

10. After having considered the rival contention of the

learned counsel for respective parties and after having perused

the oral and documentary evidence on record, the questions

which would arise for my consideration are:-

(i) Whether the trial Court is justified in

acquitting the respondent / accused for the offence

punishable under section 138 of N.I. Act?

(ii) Whether the appellant/complainant has

made out the ground to interfere with the

impugned judgment of acquittal?

11. The Appellant's case is that, he knows the

Respondent as he used to come to the house of his mother-in-

law - Gowramma. With the said acquaintance, the Respondent

requested the Appellant to lend him a sum of Rs.4 lakhs for the

development of the school building and also for purchase of

furniture. The Appellant, though he had no sufficient money as

on that day, borrowed from his co-brother - PW.2 and handed

over the amount to the Respondent. The Respondent in lieu of

the said financial transaction, as a token of security, issued a

cheque for a sum of Rs.4 lakhs to the Appellant.

12. The Respondent took a defence that he has not

borrowed the amount from the Appellant at any point of time

and he has received the amount from the mother-in-law of the

Appellant namely Smt.Gowramma, in a sum of Rs.50,000/- only,

and he further admits that he had issued a signed blank cheque

as collateral security. The said cheque, after the death of

Smt.Gowramma, has been misused by the Appellant and he

demanded the Respondent pay the amount, which the

Respondent is not liable to repay.

13. The Appellant, during the cross-examination, has

admitted that he had stopped financial transactions after the

death of his mother-in-law. However, he has admitted that the

Respondent was doing the financial transaction with his mother-

in-law. The Respondent, when specifically has raised the

question regarding the financial capacity of the Appellant to lend

such a huge amount to him, the burden of proving the same

would be shifted to the Appellant. In this case, though the

complainant/Appellant had stated before the Court that he had

lent a sum of Rs.4 lakhs to the Respondent and got examined

PW.2, who is none other than the co-brother of the Appellant,

the financial capacity to lend such a huge amount creates doubt

after having perused the oral and documentary evidence. P.W.2

had stated before the Court that he was working as a Welder in

NGEF and got voluntary retirement on 18.06.2002. Towards the

benefit of voluntary retirement from the employment, a sum of

Rs.3,89,634/- had been received by him from the Company.

Admittedly, the loan transaction took place in the year 2006.

However, he had received the voluntary retirement benefit in the

year 2002. Ex.P10, which is the document that shows the

financial transaction of PW.2, that on 26.06.2002, 27.06.2002,

28.06.2002, and 02.07.2002, the amount has been debited in

three different transactions. Therefore, the contention of PW.1

regarding the source of income which he has borrowed from

PW.2 to lend the amount to the Respondent in the year 2006 is

doubtful and not tenable.

14. The offence punishable under section 138 of N.I. Act

can be completed only with the concatenation of a number of

acts. The following are the acts which are components of the

offence. (1) drawing of the cheque, (2) presentation of cheque

to the bank, (3) returning the cheque unpaid by the drawee

Bank, (4) giving notice in writing to the drawer of the cheque

demanding payment of the dishonoured cheque amount, (5)

failure of the drawer to make payment within 15 days of the

receipt of the notice.

Section 139 of the N.I. Act says, it shall be presumed,

unless the contrary is proved, that the holder of a cheque

received the cheque of the nature referred to in section 138 for

the discharge, in whole or in part, of any debt or other liability.

15. The Respondent, who deposed as DW.1, has stated

that he had a money transaction with Smt.Gowramma for 12

years. In the year 2006, he received Rs.50,000/- and has issued

the cheque as security.

16. On perusal of Ex.P1 - cheque, which indicates that

there are two signatures found on it. The Respondent has denied

the signature affixed in the amount corrected. No effort has

been made to prove the signature of the Respondent. The

Appellant admitted that the Respondent had a money

transaction with his mother-in-law and his mother- in- law has

died. A specific question was put to the Appellant during cross-

examination that he had no financial capacity to lend such a

huge amount; it was the Appellant who had to discharge the

initial burden. In this case, PW.1 has examined his co-brother -

PW.2 and tried to convince the Court about the financial capacity

to give the loan to the Respondent, which created doubt. The

Appellant has failed to establish the monetary transaction with

the Respondent and was unable to discharge the initial burden to

raise the presumption as envisaged under section 139 of N.I.

Act. On the other hand, the Respondent has established the fact

of money transaction with the mother-in-law of the Appellant

through admissions in the cross-examination. Such being the

fact, the contention of the Respondent about issuance of the

cheque as collateral security to Smt.Gowramma, who is none

other than the mother-in-law of the Appellant, cannot be

denied.

17. In view of the observations made above, I answer

the points which arose for consideration. Point No.1 is answered

in 'Affirmative', by holding that the trial Court is justified in

acquitting the accused for the offence punishable under section

138 of N.I. Act. Point No.2 is answered in the 'Negative,' by

holding that the Appellant has not made out grounds to interfere

in the order of acquittal passed by the trial Court.

18. With the above observations, I pass the following:-

ORDER

(i) The appeal filed by the appellant/complainant is

dismissed.

(ii) The impugned judgment and order of acquittal

passed in C.C.No.27327/2007 dated 27.08.2011

passed by the learned XXII ACMM & XXIV ASCJ,

Bengaluru is hereby confirmed.

(iii) Registry is directed to transmit the records to the

trial Court, if necessary.

(iv) This Court placed appreciation on record for the

service rendered by the learned Amicus Curiae

Smt. P.V.Kalpana and direct the Legal Services

Authority to pay a sum of Rs.5,000/- (Rupees

Five Thousand only) as honorarium.

Sd/-

JUDGE

Bss