Mr. Vinay Shiva Gowda vs Mr. Avinash Kumar P Ghatge
2023 Latest Caselaw 10505 Kant

Karnataka High Court

Mr. Vinay Shiva Gowda vs Mr. Avinash Kumar P Ghatge on 14 December, 2023

Author: Rajendra Badamikar

Bench: Rajendra Badamikar

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                                                    NC: 2023:KHC:45609
                                                CRL.A No. 1449 of 2018




               IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                  DATED THIS THE 14TH DAY OF DECEMBER, 2023

                                      BEFORE
                THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR
                       CRIMINAL APPEAL NO. 1449 OF 2018
             BETWEEN:


             MR. VINAY SHIVA GOWDA,
             S/O LATE PUTASWAMY,
             R/AT NO.64, 4TH 'A' BLOCK,
             3RD FLOOR, 2ND MAIN ROAD,
             2ND CROSS, DOMLUR,
             BENGALURU-560 071.
                                                          ...APPELLANT
             (BY SRI. SHARATH .S GOWDA, ADVOCATE)
             AND:

             MR. AVINASH KUMAR .P GHATGE,
             S/O SRI. PRABHAKAR RAO G.S.,
             AGED MAJOR,
             FLAT NO.F-2 PLATINUM ENCLAVE
             APARTMENTS, PHASE-4,
             KEREGODU ADA HALLI,
Digitally    CHIKKABANAVAR ROAD,
signed by    BENGALURU-560 090,
SOWMYA D     ALSO WORKING AS CLERK, TALUK OFFICE,
Location:    YELAHANKA, MINI VIDHAN SOUDHA,
High Court   YELAHANKA NEW TOWN,
of           BENGALORE-560 064.
Karnataka                                               ...RESPONDENT

             (BY SMT. ARCHANA .K.N, AMICUS CURIAE, V/O DTD:29.9.23)
                  THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO
             SET ASIDE THE JUDGMENT OF ACQUITTAL DATED 06.06.2018
             PASSED BY THE LVIII ADDL.C.M.M., BENGALURU IN
             C.C.NO.58431/2016        -       ACQUITTING        THE
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                                              NC: 2023:KHC:45609
                                        CRL.A No. 1449 of 2018




RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.
ACT.

     THIS APPEAL COMING ON FOR FURTHER HEARING THIS
DAY, THE COURT DELIVERED THE FOLLOWING:


                       JUDGMENT

This appeal is filed by the complainant under

Section 378 (4) of Code of Criminal Procedure

(hereinafter referred to as 'Cr.P.C' for short)

challenging the judgment of acquittal passed by

LXVIII Additional Chief Metropolitan Magistrate, Mayo

Hall Unit, Bangalore in C.C.No.58431/2016 dated

06.06.2008 whereby the learned Magistrate acquitted

the accused / respondent herein for the offence

punishable under Section 138 of Negotiable

Instruments Act, 1881 (hereinafter referred to as 'the

N.I.Act' for short).

2. For the sake of convenience, the parties

herein are referred with original ranks occupied by

them before the trial Court.

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3. The brief factual matrix leading to the case

are as under:

That the complainant and accused were well

acquainted with each other and as per the request of

the accused, the complainant had advanced a sum of

Rs.9,50,000/- on 05.02.2016 as a hand loan. The

accused has agreed to repay the loan within 4

months, but he failed to do so and when the

complainant has insisted for the payment of the said

amount, he has issued a cheque drawn on Corporation

Bank, Nrupathunga Road Branch dated 06.06.2016 for

a sum of Rs.9,50,000/-. When the said cheque was

presented for encashment, it was returned for

'insufficient of funds'.

4. Thereafter, the complainant has got issued a

legal notice and inspite of service of legal notice, the

accused has neither replied to the legal notice nor paid

the cheque amount and hence, the complainant claims

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to have filed the complaint before the learned

Magistrate under Section 200 of Code of Criminal

Procedure (hereinafter referred to as 'Cr.P.C' for

short) against the accused for the offences punishable

under Section 138 of N.I.Act.

5. The learned Magistrate after recording the

sworn statement of the complainant has taken

cognizance of the offence and issued process against

the accused. The accused has appeared through his

counsel and was enlarged on bail. The plea under

Section 138 of N.I.Act is framed and accused denied

the same.

6. To prove the guilt of the accused, the

complainant got examined himself as PW1 and also

placed reliance on 7 documents marked at Ex.P1 to

Ex.P7. After conclusion of the evidence of

complainant, the statement of accused under Section

313 of Cr.P.C is recorded to enable the accused to

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explain the incriminating evidence appearing against

him in the case of the complainant, but his case of

total denial. The accused got himself examined as

DW1. However, he has not produced any documents

in support of his contention.

7. Having heard the arguments and after

appreciating the oral and documentary evidence, the

learned Magistrate has acquitted the accused for the

offence punishable under Section 138 of N.I.Act on the

sole ground that the complainant has not explained

the source of income to advance such a huge amount.

Being aggrieved by this judgment of acquittal, the

complainant is before this court.

8. Heard the arguments advanced by the

learned counsel for the appellant and learned amicus

curiae for respondent. Perused the records.

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9. The learned counsel for the appellant would

contend that on 05.02.2016, an amount of

Rs.9,50,000/- was advanced to accused and the same

was repaid through cheque under Ex.P1, but the

cheque was bounced. It is also asserted that the

signature on the cheque and that the cheque belongs

to the accused are undisputed facts and thereby the

presumption under Section 139 of N.I.Act is in favour

of the complainant, which is not at all rebutted by the

accused. He would also contend that the accused has

taken inconsistent defences regarding he only acting

as a surety by issuing a security cheque to the loan

advanced to one Aslam and subsequently, during the

course of arguments, he has set up a defence of

disputing financial capacity of the complainant. It is

argued that the financial status of complainant was

never challenged and the presumption under Section

139 of N.I.Act was never rebutted, which is mandatory

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and the learned Magistrate has erred in acquitting the

accused only on the ground of financial status of the

complainant, which was never challenged. Hence, he

would seek for allowing the appeal by convicting the

accused for the offences punishable under Section 138

of N.I.Act by setting aside the impugned judgment of

acquittal.

10. The learned amicus curiae would submit

that the complainant is required to prove that the

cheque was issued towards legally enforceable liability

and the cross-examination of PW1 discloses that the

financial status is challenged and no documents

regarding financial capacity of the complainant to

advance huge amount of loan of Rs.9,50,000/- were

produced and hence, the presumption deemed to have

been rebutted. Hence, she would contend that the

learned Magistrate is justified in acquitting the

accused and sought for dismissal of the appeal.

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11. Having heard the arguments and perusing

the records, now the following point would arise for

my consideration:

(i) Whether the judgment of acquittal passed by the trial court is perverse, arbitrary and erroneous so as to call for any interference by this court?

12. It is the specific contention of the

complainant that the accused has availed a hand loan

of Rs.9,50,000/- from him for his financial

commitments on 05.02.2016 assuring to repay the

same within four months and after four months, when

the repayment was demanded, he has issued a

cheque under Ex.P1 towards discharge of legally

enforceable liability. The accused has not disputed

that cheque belongs to his account and it bears his

signature. Hence, the initial presumption under

Section 139 of N.I.Act to the effect that the cheque

was issued towards legally enforceable liability is in

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favour of the complainant and accused is required to

rebut the said presumption on the basis of

preponderance of probability.

13. The complainant examined himself as PW1

and in his examination-in-chief, he has reiterated the

complaint allegations. In the cross-examination of

complainant, a suggestion was made that the

complainant has paid the amount to one Aslam

through accused and a cheque was obtained as

security from the accused. Quite contrary to this

defence, the accused who was examined as DW1 has

set up a new defence in his examination-in-chief

asserting that Aslam was in need of amount and

therefore, he along with Aslam approached the wife of

the complainant and the loan was advanced by wife of

complainant and as a security, cheque was obtained

by wife of the complainant from him. This defence is

completely inconsistent and contrary to the defence

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set up in the cross-examination of the complainant.

Both the defences cannot go simultaneously. The

burden is on the accused to rebut the presumption on

the basis of preponderance of probability, but

considering the inconsistent defences raised by the

accused regarding availment of loan from the

complainant and his wife, it is evident that he has

failed to rebut the said presumption.

14. Apart from that, the accused has admitted

in his cross-examination that he has received a legal

notice issued as per Ex.P3 and he has not replied to

the same. There is no explanation from the accused

for not replying to the legal notice and he could have

set up his defence in the reply notice itself, but after

appearance, the accused is setting up two inconsistent

defences.

15. Now the arguments were advanced

regarding financial capacity of the complainant to

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advance loan, but on perusal of the cross-

examination, the financial status of the complainant

was never challenged, though certain questions were

posed regarding his avocation and income tax returns

submitted by him. When the financial status is not

specifically disputed and when there is a specific

assertion that the loan was advanced through the

accused to one Aslam, question of again accused

disputing the financial status of the complainant does

not arise at all. The learned Magistrate is carried away

in this regard and hence, the presumption available in

favour of the complainant is not at all rebutted.

16. The learned counsel for the appellant has

placed reliance on a decision reported in 'P.RASIYA

VS. ABDUL NAZER AND ANR.', AIR ONLINE 2022

SC 1373 and 'TEDHI SINGH VS. NARAYAN DASS

MAHANT', AIR online 2022 SC 942, wherein it

mandates that drawing of presumption under Section

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139 of N.I.Act is mandatory. Even in the decision in

'RAJESH JAIN VS. AJAY SINGH', (2023) 10 SCC

148, the Hon'ble Apex Court has laid down the

guidelines in this regard and drawing the presumption

is held mandatory. Under these circumstances, the

learned Magistrate has erred in acquitting the accused

only on presumptions and assumptions on the ground

that the complainant has failed to prove his financial

status, which was never disputed or challenged. As

such, the judgment of acquittal passed by the learned

Magistrate is perverse as well as arbitrary and it calls

for interference and accused is required to be

convicted for offence under Section 138 of N.I.Act.

17. The offence punishable under Section 138 of

N.I.Act is punishable with imprisonment, which may

extend to 2 years or with fine, which may be double

the amount of the cheque or both. Considering the

private financial transaction between the parties, the

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sentence of imprisonment is unwarranted. However,

the accused is required to be sentenced to pay fine.

The cheque amount is Rs.9,50,000/- and it is

advanced in 2016. Considering these facts and

circumstances, in my considered opinion, it is just and

proper to impose fine of Rs.14 Lakhs on accused,

which would serve the purpose. As such, the point

under consideration is answered in the affirmative and

accordingly, I proceed to pass the following:

ORDER

(i) The appeal is allowed.

(ii) The impugned judgment of acquittal passed by LXVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bangalore in C.C.No.58431/2016 dated 06.06.2008 is set aside.

(iii) The accused is convicted for the offence punishable under Section 138 of N.I.Act. He sentenced to pay a fine of Rs.14 Lakhs, in default, to undergo Simple Imprisonment for a period of one year.

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(iv) Out of the fine amount of Rs.14 Lakhs, Rs.13,75,000/- shall be paid to the complainant by way of compensation under Section 357 of Cr.P.C and balance Rs.25,000/- shall be credited to the State towards cost of the litigation.

(v) Send back the trial court records along with a copy of this judgment to trial court with a direction to the trial court to secure the presence of the accused and recover the fine amount including the fees of amicus curiae to the tune of Rs.5,000/- paid in this case.

(vi) The court places its word of appreciation on record regarding the assistance rendered by the amicus curiae and her fees are fixed at Rs.5,000/-.

(vii) In view of the disposal of the main matter, pending I.A., if any, stands disposed of.

Sd/-

JUDGE

SS