Karnataka High Court
Sri. Sridhar. K vs Sri. Shivashankar on 21 November, 2023
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CRL.A No. 1045 of 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 21ST DAY OF NOVEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE S RACHAIAH
CRIMINAL APPEAL NO. 1045 OF 2018 (A)
BETWEEN:
SRI SRIDHAR K
AGED ABOUT 41 YEARS
R/A NO.338/E, M G COLONY
RAILWAY QUARTERS
MAGADI ROAD POST
BANGALORE - 560 023.
...APPELLANT
(BY SRI. SHARATH KUMAR SHETTY, ADVOCATE)
AND:
SRI SHIVASHANKAR
S/O YELLUGODU
NO.3, 1ST MAIN ROAD
G C RAMAIAH BUILDING
GORUGUNTEPALYA
BANGALORE - 560 022.
...RESPONDENT
(BY SRI. M N UMESH, ADVOCATE)
THIS CRL.A FILED U/S.378(4) OF CR.P.C PRAYING TO
SET ASIDE THE JUDGMENT AND ORDER PASSED BY THE XIX
ACMM AT BANGALORE CITY MADE IN C.C.NO.13592/2012
DATED 13.04.2018 AND CONVICT THE RESPONDENT/ACCUSED
FOR THE OFFENCE PUNISHABLE U/S.138 OF N.I.ACT AND ETC.,
THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT BEFORE THE PRINCIPAL BENCH AT
BENGALURU ON 28.08.2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT, BEFORE DHARWAD BENCH,
THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
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CRL.A No. 1045 of 2018
JUDGMENT
1. This appeal is filed by the complainant being
aggrieved by the judgment and order of acquittal dated
13.04.2018 in C.C.No.13592/2012 on the file of the XIX
Addl.C.M.M. at Bengaluru City. The Trial Court acquitted the
respondent herein for the offence punishable u/sec.138 of the
Negotiable Instruments Act, 1881 (for short, 'N.I. Act').
2. The rank of the parties in the Trial Court henceforth
will be considered as it is, for convenience.
3. Brief facts of the case:
The complainant and accused are known to each other.
In pursuance of the said acquaintance, the accused said to
have borrowed a sum of Rs.8,00,000/- during the month of
October 2011 for the purpose of improving the medical store
business. The accused assured that he would repay the said
amount in the month of December 2011. However, the
accused did not repay the amount even after lapse of stipulated
period. Inspite of repeated demands having been made, the
accused had issued a post-dated cheque dated 05.01.2012 and
asked the complainant to present the same for encashment.
When it was presented for encashment through his banker, the
said cheque came to be dishonoured as "funds insufficient". A
legal notice was issued on 16.01.2012 calling upon the accused
to make the payment. The said legal notice served on
17.01.2012. The postal endorsement received by the
complainant on 27.02.2012. However, the accused neither
repaid the amount nor replied the legal notice. Therefore, the
complainant presented the complaint for necessary action.
4. In order to prove the case of the complainant,
complainant examined himself as PW1 and also got examined
another witness as PW2. Further, the complainant got marked
07 documents as Exs.P1 to P7. On the other hand, the accused
examined himself as DW1. No documents have been marked.
The Trial Court after appreciating the oral and documentary
evidence on record opined that the accused deserved to be
acquitted and recorded the acquittal.
5. Heard Sri Sharath Kumar Shetty, learned for the
appellant and Sri M.N.Umesh, the learned counsel for the
respondent. Perused the records.
6. It is the submission of the learned counsel for the
appellant that the order of acquittal passed by the Trial Court
which is against the facts and evidence on record. Therefore,
the impugned judgment is perverse and illegal. Hence, the said
judgment of acquittal is required to be set aside.
7. It is further submitted that the Trial Court
misconstrued that the complainant has to prove the case in
respect of lending capacity even though the accused has not
rebutted the presumption which is against the settled principles
of law and the order of acquittal is perverse and the same is
liable to be set aside.
8. It is further submitted that the signature and the
cheque is admitted and no reply was issued to the notice of the
complainant. The accused even though cross-examined the
complainant however, nothing has been elicited to contradict
either the transaction or issuance of the cheque. When the
accused failed to rebut the presumption, the Trial Court could
have recorded the conviction by raising the presumption which
is stipulated under Sections 118 and 139 of N.I. Act. Having
failed to consider the said aspect, resulted in passing the
impugned judgment. Therefore, the said judgment has to be
set aside. Making such submissions, the learned counsel for
the appellant/complainant prays to allow the appeal.
9. Per contra, the learned counsel for the respondent/
accused justified the order of acquittal and submitted that the
accused took his contention by way of conducting cross-
examination and through his defence that cheque was not
issued to the complainant and also contended that the
complainant being a public servant has not only obtained
permission to lend the loan, but also failed to establish the
liability of the cheque amount to be paid. It is further
submitted that the judgment and order of acquittal passed by
the Trial Court is appropriate and interference with the said
judgment may not be warranted. Making such submissions, the
learned counsel for the respondent prays to dismiss the appeal.
10. Having heard the learned counsel for the respective
parties and also perused the findings of the Trial Court, it is
relevant to refer the proposition of law laid down by the Hon'ble
Supreme Court in respect of Negotiable Instruments Act,
especially cheque bounce case. In the case of Rajesh Jain V/s
Ajay Singh1 Para No.61 and 62 reads thus:
"61. As rightly contended by the appellant,
there is a fundamental flaw in the way both the
Courts below have proceeded to appreciate the
2023 Live law (SC) 866
evidence on record. Once the presumption
under Section 139 was given effect to, the
Courts ought to have proceeded on the premise
that the cheque was, indeed in discharge of a
debt/liability. The entire focus would then
necessarily have to shift on the case set up by
the accused, since the activation of the
presumption has the effect of the shifting the
evidential burden on the accused. The nature of
inquiry would then be to see whether the
accused has discharged his onus of rebutting the
presumption. If he fails to do so, the Court can
straightaway proceed to convict him, subject to
satisfaction of the other ingredients of Section
138. If the Court finds that the evidential
burden placed on the accused has been
discharged , the complainant would be expected
to prove the said fact independently, without
taking aid of the presumption. The Court would
then take an overall view based on the evidence
on record and decide accordingly.
62. At the stage when the courts concluded that
the signature has been admitted, the Court
ought to have inquired into either of the two
questions (depending on the method in which
accused has chosen to rebut the presumption) :
Has the accused led any defense evidence to
prove and conclusively establish that there
absence of rebuttal evidence being led the
inquiry would entail : Has the accused proved
the nonexistence of debt/liability by a
preponderance of probabilities by referring to
the 'particular circumstances of the case'?"
11. On careful reading of the dictum of the Hon'ble
Supreme Court, it makes it clear that once the ingredients of
Section 138 of N.I. Act are established, the Court has to raise
the presumption that the complainant has received the cheque
issued by the accused for clearing the debt. Of course, the said
presumption is rebuttable, the accused has to rebut the
presumption by raising the probable defence that the said
cheque was issued not for the legally enforceable debt or
liability.
12. Coming to the present case, the case of the
complainant is that the accused had borrowed a sum of
Rs.8,00,000/- in the month of October 2011 and the accused
assured that he would repay the said amount within December
2011. However, the accused failed to repay the amount within
the stipulated period, instead he had issued cheque dated
05.01.2012 and asked the complainant to present the same for
encashment. When the said cheque was presented for
encashment, it got dishonoured for the reason that "funds
insufficient".
13. The accused after receipt of the legal notice has not
repaid the amount nor issued reply to the said notice. In the
cross-examination of PW1, he contended that the complainant
was working as a Traveling Ticket Examiner (TTE) in the
Railway Department and he could not lend such huge amount
to the accused. Further, the accused has contended that the
cheque in dispute was issued to the brother-in-law of the
complainant, the said brother-in-law gave the cheque to the
complainant and the complainant presented the same for
encashment. The complainant in the cross-examination has
denied the contention raised by the accused. PW1 further
admitted that at the time of lending loan, he had not obtained
permission from the department and also admitted that the
amount which he lent to the accused was not reflected in the
income tax returns.
14. Be that as it may. It is relevant to refer to the
evidence of DW1 to ascertain as to whether the presumption
envisaged u/sec.139 of the N.I. Act has been rebutted or not.
Except denial of the transaction, nothing has been elicited
either in the cross-examination of PW1 or in his evidence. The
accused has taken the probable defence that the cheque was
issued to the brother-in-law of the complainant for the loan
which he has borrowed in the year 2011 and the cheque in
question was issued as a security for the said transaction. It is
further stated that he repaid the amount which was borrowed
by the brother-in-law of the complainant. However, he could
not get the cheque returned to his custody. On reading of
evidence of DW.1, it appears that DW.1 has neither produced
any documents to show that he has cleared the loan nor made
any efforts to get back the cheque which was given as security.
15. It is settled principle of law that once the
presumption is not rebutted, the burden to prove the lending
capacity or the loan transaction never lies to the complainant.
However, the Trial Court failed to take note of this aspect and
asked the complainant to prove his case considering the cross-
examination of PW1 appears to be erroneous and perverse.
Therefore, the findings in respect of the loan transaction and
also issuance of the cheque to the complainant are against the
evidence on record. Therefore, the finding recorded by the Trial
Court in respect of acquittal is erroneous and unsustainable.
Therefore, I proceed to pass the following:
ORDER
(i) The criminal appeal is allowed.
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(ii) The judgment and order of acquittal dated
13.04.2018 passed in C.C.No.13592/2012 by the
Court of the XIX ACMM at Bengaluru City, is set
aside.
(iii) The respondent/accused is convicted for the
offence punishable under Section 138 of the N.I.
Act.
(iv) The respondent/accused is sentenced to pay fine
of Rs.9,00,000/- (Rupees nine lakhs only), in
default of payment of fine, he shall undergo
simple imprisonment for one and half year.
(v) On payment of fine by the respondent/accused,
it is ordered to pay compensation of
Rs.8,90,000/- (Rupees Eight Lakhs Ninety
Thousand only) to the complainant in terms of
Section 357-A of the Code of Criminal Procedure
and the rest of the amount shall be adjusted to
the exchequer of the State.
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(vi) The registry is directed to send the records along
with the copy of the judgment to the Trial Court
for its execution after loss of appeal period.
(vii) It is directed the Trial Court to secure the
respondent/accused in accordance with law for
the purpose of execution of sentence.
Sd/-
JUDGE
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