Karnataka High Court

Sri. Ananda K Karkera vs Sri. Yadav S Amin on 2 November, 2023

Bench: S Rachaiah

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                                     CRL.A No. 78 of 2013



  IN THE HIGH COURT OF KARNATAKA AT BENGALURU
     DATED THIS THE 2ND DAY OF NOVEMBER, 2023
                       BEFORE
        THE HON'BLE MR JUSTICE S RACHAIAH
        CRIMINAL APPEAL NO. 78 OF 2013 (A)
BETWEEN:
   SRI ANANDA K KARKERA
   S/O LATE KOOSA TANDELA
   AGED ABOUT 46 YEARS
   RESIDING AT SAI KIRAN
   BADANIDIYOOR POST
   KEMMANNU, UDUPI TALUK &
   DISTRICT.
                                             ...APPELLANT

(BY SRI. H JAYAKARA SHETTY, ADVOCATE)

AND:
   SRI YADAV S AMIN
   AGED ABOUT 43 YEARS
   S/O SOMAYYA KOTIAN
   R/O SOMAGIRI NIVAS
   POST BADANIDIYOOR
   KADIKA (VIA), KEMMANNU
   UDUPI TALUK AND DISTRICT
                                           ...RESPONDENT

(BY SRI. NAGARAJA HEGDE, ADVOCATE)


     THIS CRL.A FILED U/S.378(4) OF CR.P.C PRAYING TO
SET ASIDE THE ORDER IMPUGNED DATED 15-11-2012 MADE
IN CRIMINAL CASE NO.4372/2008 PASSED BY THE III
ADDITIONAL CIVIL JUDGE & JMFC, UDUPI, AND ETC.,

     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON     24.08.2023, COMING  ON   FOR
PRONOUNCEMENT OF JUDGMENT, THIS DAY, THE COURT
DELIVERED THE FOLLOWING:-
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                                           CRL.A No. 78 of 2013



                        JUDGMENT

1. This appeal is filed by the appellant being aggrieved

by the judgment and order of acquittal dated 15.11.2012

passed in C.C.No.4372/2008 on the file of III Addl. Civil Judge

and JMFC, Udupi, wherein, the Trial Court acquitted the

respondent for the offence punishable under Section 138 of the

Negotiable Instruments Act (for short 'N.I. Act').

2. The rank of the parties in the Trial Court henceforth

will be considered accordingly for convenience.

Brief facts of the case:

3. It is the case of the complainant that accused had

availed a hand loan of Rs.3.00 lakhs in cash to purchase the

tempo and assured that he would repay the said loan along

with 15% interest per annum. When the accused failed to repay

the amount as agreed upon by him, the complainant demanded

for repayment of the said amount and the accused issued a

cheque bearing No.023260 dated 06.12.2007 for a sum of

Rs.3.00 lakhs. When the same was presented for encashment,

it was dishonoured with a shara as 'insufficient funds'. The

same was brought to the notice of the accused and inspite of

CRL.A No. 78 of 2013

service of notice, the accused did not repay the amount. Hence,

the complainant was constrained to file a complaint before the

jurisdictional Magistrate.

4. To prove the case of the complainant, the

complainant examined himself as PW.1 and got marked five

documents as Ex.P1 to Ex.P5. On the other hand, the accused

examined himself as DW.1 and got marked eight documents as

Ex.D1 to Ex.D8. The Trial Court after appreciating the oral and

documentary evidence on record opined that the complainant

failed to prove the transaction and acquitted the accused.

5. Heard Sri.H.Jayakara Shetty, learned counsel for

the appellant and Sri.Nagaraja Hegde, learned counsel for the

respondent.

6. It is the submission of learned counsel for the

appellant that the findings recorded by the Trial Court in

acquitting the accused is erroneous, perverse and illegal and

the same requires to be set-aside.

CRL.A No. 78 of 2013

7. It is further submitted that the cheque and signature

are admitted by the accused, however, the transaction has

been denied by him. The Trial Court failed to take note of the

presumption which is required to be raised under Section 139

of N.I. Act. In addition to raising the presumption, the Trial

Court failed to appreciate the evidence of PW.1 and DW.1

properly, as a result, the impugned judgment is passed which is

required to be set aside.

8. It is further submitted that once the presumption is

raised in favour of the complainant, the burden lies on the

accused to rebut the presumption by leading the cogent

evidence. Unless the accused adduces the cogent evidence, it

cannot be said that the presumption would be rebutted.

However, the Trial Court failed to take note of this aspect and

recorded the acquittal which is perverse and illegal and the said

order of acquittal has to be set aside. Making such submission,

learned counsel for the appellant prays to allow the appeal.

9. Per contra, learned counsel for the respondent

justified the order of acquittal passed by the Trial Court and

submitted that the Trial Court while appreciating the oral and

documentary evidence opined that, Ex.P1 cheque was of the

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year 1995 and the transaction is of the year 2007, hence, the

loan transaction between the accused and the complainant has

not been proved. In addition to the said findings, the Trial

Court further considered the contradiction and inconsistency in

respect of the transaction between the complainant and the

accused and also further considered that the said contradiction

became material contradiction. Hence, recorded the acquittal

which is appropriate and relevant and interference with the said

findings may not be warranted. Making such submission,

learned counsel for the respondent prays to dismiss the appeal.

10. Having heard the learned counsel for the respective

parties and also having perusing the averments made in the

said findings, the points which arise for my consideration are:-

(i) Whether the judgment and order of acquittal passed by the Trial Court for the offence punishable under Section 138 of Negotiable Instruments Act is justified?

     (ii)     Whether    the    appellant     has    made     out
               grounds   to    interfere   with     the   findings

recorded for acquittal by the Trial Court?

11. This Court being an Appellate Court, necessarily

appreciate both oral and documentary evidence. However, in

CRL.A No. 78 of 2013

the case of appeal against acquittal, interference by the

Appellate Court would be where the perversity is noticed in the

findings of the acquittal passed by the Trial Court.

12. In order to avoid repetition of the facts, only the

relevant points are to be considered to re-appreciate the

findings of the Trial Court. The complainant is stated to have

lent an amount of Rs.3.00 lakhs to the accused to purchase the

tempo. When the amount was not repaid to the complainant as

agreed upon by the accused, the complainant has insisted the

accused to repay the amount. The accused in lieu of repayment

of cash, issued a cheque. On presentation of the said cheque

for encashment, it got dishonoured as 'insufficient funds'. In

spite of notice having been served to the accused, the accused

neither repaid the amount nor issued reply to defend his case.

13. Before adverting to the facts of the case, it is

relevant to refer to the provisions of Sections 118 and 139 of

N.I. Act which reads as follows:-

"118. Presumptions as to negotiable instruments.--Until the contrary is proved, the following presumptions shall be made:--

(a) of consideration:--that every negotiable instrument was made or drawn for consideration,

CRL.A No. 78 of 2013

and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;

(b) as to date:--that every negotiable instrument bearing a date was made or drawn on such date;

(c) as to time of acceptance:--that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;

(d) as to time of transfer:--that every transfer of a negotiable instrument was made before its maturity;

(e) as to order of indorsements:--that the indorsements appearing upon a negotiable instrument were made in the order in which they appear then on;

(f) as to stamp:-- that a lost promissory note, bill of exchange or cheque was duly stamped;

(g) that holder is a holder in due course:--that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.

CRL.A No. 78 of 2013

139. Presumption in favour of holder.--It shall

be presumed, unless the contrary is proved, that the

holder of a cheque received the cheque of the nature

referred to in section138 for the discharge, in whole

or in part, of any debt or other liability."

14. On careful reading of the above said provisions, it

states that once the cheque and the signature are admitted by

the drawer of the cheque, it is presumed that the holder of the

cheque received the cheque of the nature referred to in

Section 138 of N.I. Act for the discharge, in whole, or in part of

any debt or liability. However, the presumption is rebuttable

by proving to the contrary. Mere denial of the transaction is

not sufficient to rebut the presumption. In the absence of any

cogent evidence to show that the cheque was not issued in

discharge of debt it cannot be said that the presumption is

rebutted.

15. It is no doubt that initially the burden lies on the

accused to rebut the presumption by leading cogent evidence.

Therefore, it is appropriate to refer to the evidence of accused.

He states in his evidence that no monetary transaction has

taken place between himself and the complainant. In fact,

CRL.A No. 78 of 2013

cheque in dispute was issued to Pooja Finance at the time of

borrowing loan from the said Pooja Finance. In order to

substantiate his evidence, the accused got marked eight

documents as Exs.D1 to D8.

16. It is further stated in his evidence that he knew the

complainant since 13 years and both were doing boat business

as a partners. During the said period, the accused stated to

have borrowed loan of Rs.1.00 lakh from Pooja Finance and

the complainant stood as guarantor. The said Pooja Finance

received the cheque in dispute as a security to the said loan.

After some days, the accused and the complainant have

dissolved the partnership since they sustained loss in the said

business. It is also stated in his evidence that the said Pooja

Finance has registered a case against the accused in the same

Court and the said dispute was settled between the accused

and Pooja Finance for a sum of Rs.75,000/-. It is further

stated in his evidence that, despite the settlement, the cheque

in question had not returned from the Pooja Finance to the

accused. It is the contention of the accused that instead of

returning the cheque, it was issued to the complainant and

case has been registered through the complainant. In order to

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CRL.A No. 78 of 2013

substantiate his contention, the accused has produced Ex.D1-

on demand promissory note.

17. On careful reading of the evidence of the accused,

it may be true that the accused had borrowed loan of Rs.1.00

lakh from the Pooja Finance and also true that he has executed

promissory note. However, he has not produced any

documents to show that the present cheque was issued as a

security for the said loan. The accused further admitted that

both himself and the complainant were doing boat business as

a partners and the said partnership has been dissolved due to

loss sustained in the said business. It is not the case of the

accused that the cheque in dispute has been taken by the

accused when they were doing business together as a

partners. However, he contended that the cheque in dispute

was issued to Pooja Finance as a security and the said Pooja

Finance given the said cheque and got the complaint filed

through the complainant. In the absence of evidence on

record to show the nexus between the complainant with the

Pooja Finance, it cannot be accepted that the complainant

took the cheque from Pooja Finance and filled it and presented

it for encashment and claimed the amount through the said

cheque and the Trial Court failed to take note that the

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CRL.A No. 78 of 2013

presumption has not been rebutted. Even though the

presumption has not been rebutted, the Trial Court asked the

complainant to prove the case beyond all reasonable doubt and

recorded the acquittal for not having proved the case of the

complainant which appears to be erroneous and the judgment

of acquittal cannot be sustainable.

18. In the light of the observations made above, the

points which arose for my consideration are answered as:

     Point No.(i)           : in the "Negative"

     Point No.(ii)          : in the "Affirmative"

19. Hence, I proceed to pass the following;

ORDER

i) The criminal appeal is allowed.

ii) The judgment and order dated 15.11.2012

passed in C.C.No.4372/2008 by III Additional

Civil Judge and JMFC, Udupi is set aside.

iii) The respondent / accused is convicted for the

offence punishable under Section 138 of the N.I.

Act and he is sentenced to pay a sum of

Rs.4,10,000/- (Rupees Four Lakhs Ten thousand

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CRL.A No. 78 of 2013

only), in default of payment of fine, he shall

undergo simple imprisonment for one year.

iv) It is ordered that out of Rs.4,10,000/- (Rupees

Four lakhs ten thousand only), Rs.4,00,000/-

(Rupees Four lakhs only) shall be paid to the

complainant as compensation in terms of

Section 357-A of the Code of Criminal Procedure

and the balance of Rs.10,000/- (Rupees Ten

thousand only) would be adjusted to the

exchequer of the State.