Karnataka High Court

Sri. K. V. Bhaskar Murthy vs Smt. K. Lalitha on 6 October, 2023

Bench: J.M.Khazi

                          1       CRL. A NO.126 OF 2018 C/W
                                       CRL. A NO.127 OF 2018


    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 6TH DAY OF OCTOBER, 2023

                        BEFORE

           THE HON'BLE MS.JUSTICE J.M.KHAZI

          CRIMINAL APPEAL NO.126 OF 2018
                       C/W
          CRIMINAL APPEAL NO.127 OF 2018

IN CRIMINAL APPEAL NO. 126 OF 2018:

BETWEEN:

SRI. K. V. BHASKAR MURTHY
S/O. LATE V. VENKATANARAYANA,
AGED ABOUT 59 YEARS,
RESIDING AT NO.245, 6TH MAIN,
4TH BLOCK, JAYANAGAR,
BENGALURU-560 011.

                                              ...APPELLANT
(BY SRI. SACHIN V.R., ADVOCATE)

AND:

SRI. K. LAKSHMINARASIMHA MURTHY
S/O. SRI. KRISHNAPPA,
AGED ABOUT 50 YEARS,
RESIDING AT NO.248, 6TH MAIN,
JAYANAGARA 4TH BLOCK,
BENGALURU-560 011.
                                        .....RESPONDENT

(BY SRI.K.R. NAGARAJ, ADVOCATE)

    THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO SET
ASIDE A) THE JUDGMENT AND ORDER DATED 11.12.2017
PASSED BY THE HON'BLE XXII ACMM, BENGLURU; B)
CONSEQUENTLY ALLOW THE COMPLAINT IN C.C. NO. 10202 /
2016 AND THEREBY CONVICT THE ACCUSED PERSONS;
                           2        CRL. A NO.126 OF 2018 C/W
                                        CRL. A NO.127 OF 2018


C)PASS ANY SUCH ORDER AS THIS HON'BLE COURT DEEMS
FIT TO PASS IN THE CIRCUMSTANCES OF THIS CASE IN THE
ENDS OF JUSTICE.

IN CRIMINAL APPEAL NO. 127 OF 2018:

BETWEEN:

SRI. K. V. BHASKAR MURTHY
S/O. LATE V. VENKATANARAYANA,
AGED ABOUT 59 YEARS,
RESIDING AT NO. 245, 6TH MAIN,
4TH BLOCK, JAYANAGAR,
BENGALURU-560 011.
                                               ...APPELLANT
(BY SRI.SACHIN V.R., ADVOCATE)

AND:

SMT. K. LALITHA
W/O. SRI. K. LAKSHMINARASIMHA MURTHY,
AGED ABOUT 44 YEARS,
RESIDING AT NO.248, 6TH MAIN,
JAYANAGARA 4TH BLOCK,
BENGALURU-560 011.
                                          .....RESPONDENT
(BY SRI.K. R. NAGARAJ, ADVOCATE)

     THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
(4) OF CODE OF CRIMINAL PROCEDURE PRAYING TO A)SET
ASIDE THE JUDGMENT AND ORDER DATED 11.12.2017
PASSED BY THE HON'BLE XXII ACMM, BENGALURU;
B)CONSEQUENTLY ALLOW THE COMPLAINT IN C.C. NO.
10203/2016 AND THEREBY CONVICT THE ACCUSED
PERSONS; C)PASS ANY SUCH ORDER AS THIS HON'BLE
COURT DEEMS FIT TO PASS IN THE CIRCUMSTACES OF THIS
CASE IN THE ENDS OF JUSTICE.

     THESE CRIMINAL APPEALS HAVING BEEN HEARD AND
RESERVED ON 28TH JUNE OF 2023, COMING ON FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:
                                    3        CRL. A NO.126 OF 2018 C/W
                                                 CRL. A NO.127 OF 2018


                      JUDGMENT

& ORDER ON I.A.No.2/2023

These appeals filed u/sec.378(4) of Code of

Criminal Procedure (for short, 'Cr.P.C.'), are by the

complainant challenging the impugned judgment and

orders dated 11.12.2017 in C.C.No.10202 and 10203 of

2016, whereby both complaints filed by the complainant

for the offence punishable u/sec.138 of N.I. Act, came to

be dismissed.

2. In the said complaints, complainant is

common, whereas accused are different. However the

accused are husband and wife and the transaction

through which these complaints arose is same. The

accused are joint account holders. In respect of the

cheque signed and issued by the husband, C.C.No.10202

of 2016 and in respect of the cheque signed and issued

by the wife, C.C.No.10203 of 2016 came to be filed.

Though separate complaints were filed and separate

evidence is led in both cases and the trial Court has

disposed off them separately, having regard to the fact

that the parties are common and the transaction between 4 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

the complainant and accused is common, it would be

appropriate to club these two appeals and dispose off by

a common order.

3. For the sake of convenience, the parties are

referred to by their rank before the trial Court and

wherever necessary accused are referred with suffix of

their names.

4. It is the case of the complainant that accused

K.Lakshminarasimha Murthy and accused K.Lalitha are

husband and wife. The complainant and accused are

neighbours residing next to each other. Accused are joint

owners of site No.248, 6th Main, 4th Block Jayanagar,

Bengaluru-11. During April 2014, accused planned to

construct a residential building. As complainant and

accused are family friends, well-wishers and close to

each other, accused requested complainant to help them

financially in a sum of Rs.1.25 crores by way of hand

loan so that they could complete the construction. After

frequent interactions, deliberations and discussions,

accused offered to sell 2nd floor of the construction for a 5 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

sum of Rs.2 crores and Rs.1.25 crores which they are

borrowing from the complainant would be treated as

advance and for some reason if they could not sell the

2nd floor, they would return the hand loan with interest.

4.1 In this regard, complainant paid Rs.50 lakhs

on 02.04.2014 and an agreement of sale and

memorandum of understanding dated 02.04.2014 was

entered into between the parties. Accused issued

undated cheque No.976840 for Rs.50 lakhs.

4.2 Complainant paid Rs.25 lakhs/- on

09.06.2014. In this regard amendment to agreement

dated 02.04.2014 and memorandum of understanding of

even date 09.06.2014 was executed. Accused issued an

undated cheque No.467970 for Rs.25 lakhs

4.3 Complainant paid Rs.25 lakhs/- on

08.09.2014. In this regard on 08.09.2014 amendment to

agreement dated 02.04.2014 and memorandum of

understanding dated 12.09.2014 was executed. Accused

took back cheque No.976840 and 467970 and issued an 6 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

undated consolidated cheque for Rs.1 crore signed by

accused-K.Lalitha.

4.4 Complainant paid Rs.25 lakhs/- on

24.11.2014. In this regard amendment to agreement

dated 02.04.2014 and memorandum of understanding of

even date 24.11.2014 was executed. Accused issued an

undated cheque No.473215 for Rs.25 lakhs/- signed by

accused-K.Lakshminarasimha Murthy.

4.5 With the timely hand loan provided by the

complainant, accused completed the construction before

the end of March 2015. Infact, the complainant and his

wife attended the house warming ceremony. However

they came to know that accused have already leased the

2nd floor during November 2014 itself, which they had

agreed to sell to the complainant. They did not bother to

response to queries of the complainant. Sensing some

danger, complainant addressed a letter dated 11.12.2015

to the accused with a request to repay the amount due.

Though it is duly served, accused have neither paid the

money nor sent any reply.

                                7       CRL. A NO.126 OF 2018 C/W
                                            CRL. A NO.127 OF 2018


    4.6    When things stood thus, to his shock and

surprise, complainant received summons in O.S.No.450

of 2016 which is a suit filed by the accused for

permanent injunction alleging illegal interference. In the

said suit, accused have not even whispered about the

monitory transaction between them and the complainant.

When enquired, accused expressed that they are not

interested in selling the property. They directed the

complainant to present the cheques for Rs.1.25 crores

and get the money due.

4.7 Accordingly, on 09.03.2016 complainant

presented cheque No.473215 for Rs.25 lakhs issued by

accused-K.Lakshminarasimha Murthy. However it is

returned with endorsement 'funds insufficient'.

4.8 Similarly on 09.03.2026 complainant

presented the cheque No.466349 for Rs.1 crore issued by

accused-K.Lalitha. It was returned dishonoured on the

ground 'payment stopped by drawer'.

4.9 Hence, complainant got issued a legal notice

dated 17.03.2016 through RPAD and speed post.

                                         8     CRL. A NO.126 OF 2018 C/W
                                                   CRL. A NO.127 OF 2018

Accused have received the notices sent through RPAD,

but the one sent through courier is returned with

endorsement 'door locked'. However instead of

complying with the legal notice, the accused have sent

untenable reply dated 04.04.2016.

4.9(a) In the reply notice, the accused have

admitted receipt of hand loan in a sum of Rs.1.25 crores.

They have denied that they offer to sell 2nd floor for Rs.2

crores. They admitted receipt of letter dated 11.12.2015

sent by complainant demanding repayment of the

amount. Accused have claimed that they have repaid the

entire sum of Rs.1.25 crores and alleged that

complainant has misused the cheques given by them by

way of security.

4.10 In the light of the fact that accused have

failed to comply with the legal notice and have taken up

a false defence, without any alternative, the complainant

is forced to file separate complaints.

                              9      CRL. A NO.126 OF 2018 C/W
                                         CRL. A NO.127 OF 2018

5. After due service of summons, accused have

put in their appearance through counsel. They have

pleaded not guilty and claimed trial.

6. In C.C.No.10202 of 2016, complainant has

examined himself as PW1 and got marked Exs.P1 to 14.

6.1 During the course of his statement u/sec.313

Cr.P.C., accused-K.Lakshminarasimha Murthy has denied

the incriminating evidence brought on record by the

complainant.

6.2 Accused-K.Lakshminarasimha Murthy has

stepped into the witness box by examining himself as

DW1 and got marked Exs.D1 to 7.

7. In C.C.No.10203 of 2016, complainant has

examined himself as PW1 and got marked Exs.P1 to 14.

7.1 During the course of her statement u/sec.313

Cr.P.C., accused-K.Lalitha has denied the incriminating

evidence brought on record by the complainant.

                                    10         CRL. A NO.126 OF 2018 C/W
                                                   CRL. A NO.127 OF 2018


        7.2   Accused-K.Lalitha         has     stepped     into     the

witness box by examining herself as DW1 and got

marked Exs.D1 to 4.

8. Vide the impugned judgment and order, the

trial Court has dismissed both complaints.

9. Being aggrieved by the impugned judgments

and orders, the complainant is before this Court

contending that the defence taken by the accused does

not appeal to the law of commonsense and is false. The

trial Court has not bestowed its attention to the

inconsistency in the defence taken by the accused and

thereby rendered its judgment which is erroneous and

liable to be set aside. The trial Court has not appreciated

the falsehood of the defence taken by the accused.

Having taken up a defence that the loan is discharged,

the accused have failed to prove it and in the light of the

same, the trial Court has erred in holding that the

cheques were issued only for security purpose and

therefore, the accused are not liable to be prosecuted.

                                   11        CRL. A NO.126 OF 2018 C/W
                                                 CRL. A NO.127 OF 2018

10. The trial Court has also failed to appreciate

the fact that the sale deeds at Ex.D3 to 6 are between

the accused persons and their relatives and the accused

have failed to prove that through the sale deeds, they

have received sale consideration and repaid the amount

due to the complainant. The trial Court has not

appreciated the same and fell into error in dismissing the

complaints and prays to allow the appeals, set aside the

impugned judgments and orders of the trial Court,

convict the accused and punish them in accordance with

law.

11. In support of his arguments, learned counsel

for complainant has relied upon the following decisions:

i. Sunil Todi and others V/s State of Gujarat and another (Sunil Todi)1

ii. Sripati Singh (since deceased) through his son Gaurav Singh V/s State of Jharkhand and another (Sripati Singh)2

AIR 2020 SC 147

AIR 2021 SC 5732 12 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

iii. Sampelli Satyanarayana Rao V/s India Renewable Energy Development Agency Limited (Sampelli Satyanarana Rao)3

iv. Uttam Ram V/s Devinder Singh Hudan and another (Uttam Ram)4

v. T.Vasanthkumar V/s Vijayakumari (Vasanthkumar)5

vi. M.S.Srikara Rao V/s H.C.Prakash (Srikara Rao)6

12. On the other hand, learned counsel

representing the accused supported the impugned

judgment and order and submitted that appreciating the

oral and documentary evidence placed on record, the

trial Court has come to a correct conclusion and there are

no justifiable grounds to interfere and prays to dismiss

the appeals and confirm the judgment and order of the

trial Court.

2016 SCC 458

AIR Online 2019 SC 1285

2015 AIR SCW 3040

ILR 2013 KAR 4493 13 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

13. In support of his arguments, learned counsel

for accused has relied upon the following decisions:

i. Criminal Revision Petition No. 106/2005 dated 1/11/2006(Del.H.C) (Virender Singh v/s Laxmi Narain & another)

Cases Referred:

(a) Mohd. Salimuddin v/s Misri Lal(1986)2 SCC 378,

(b) Sita Ram V/s Radha Bai, (1968)1 SCR 805,

(d) Tarsem Singh v/s Sukhminder Singh, 1998(2) All MR 528(s.c.), (1998)3 SCC 471,

ii. 2005 Cri.L.J.4095 (Kerala H.C.) J.Daniel v/s State of Kerala, Money Lending without License iii. 2010 Cri.L.J. 1217 (Bom. H.C.) Anil Baburao Kataria V/S Purshottam Prabhkar Kawane Citation of Security Cheques iv. (2008)7 Supreme Court Cases 137, Sudhik Kumar Bhalla v/s Jagdish Chand and others,

v. ILR 2008 KAR 3635 K.Narayana Nayak V/s Sri. M.Shivarama Shetty,

5. Any violation of terms agreement Claim Before Civil Court,

vi. ILR 2006 KAR 3579 M/s Sathavahana Ispat Ltd v/s Umesh Sharma and others, 14 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

vii. 2009 Supreme (Kar) 535 A. Venkatesh Bhat v/s Rohidas Shenoy

6. U/s 118(a) & 139 of N.I. Act, Presumption, Standard of preponderance of probabilities

viii. (2009)2 Supreme Court Cases 513 Kumar Exports v/s Sharma Carpets,

ix. (2013)3 Supreme court cases 86 Vijay v/s Laxman and another x. (2019)5 Supreme Court cases 418 Basalingappa v/s Mudibasappa,

xi. Criminal Appeal No. 1497/2022 Dashrathbhai Trikambhai Patel v/s Hitesh Mahendrabhai Patel and another.

7. Mere marking of document as an exhibit does not dispense with its proof.

xii. AIR 1971 SUPREME COURT 1865 Sait Tarajee Khimchand and others v/s Yelamarti Satyam and others.

14. In both appeals, the complainant has filed

I.A.No.2/2023 u/sec.391 Cr.P.C. to permit him to

produce the following documents:

i. Copy of final order dated 16.09.2021 passed in MFA No.6685 of 2016 c/w WP No.52331 of 2016 -Annexure-A.

                               15        CRL. A NO.126 OF 2018 C/W
                                             CRL. A NO.127 OF 2018

ii. Copy of the statement of objections filed by the present respondent in RFA No.406 of 2022 dated 06.01.2023-Annexure-B.

iii. Certified copy of entire order sheet in RFA No.406 of 2022-Annexure-D.

iv. Copy of legal notices issued by the respondent dated 18.05.2022-Annexure-D and D1.

v. Copy of the reply dated 02.06.2022 of the appellant-Annexure-E.

15. In support of the application, the complainant

has sworn to the effect that these documents have come

into existence after the completion of the trial. In MFA

No.6685 of 2016 c/w W.P.No.52331 of 2016, this Hon'ble

Court reversed the order dated 23.08.2016 on I.A.No.1

and 2 in O.S.No.3090 of 2016 and held that the

observations made therein are premature. In RFA No.406

of 2022, which was filed by the accused against the order

passed in O.S.No.3090 of 2016, the Hon'ble Division

Bench of this Court observed the fact that accused have

admitted receipt of hand loan of Rs.1.25 crores and 16 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

claimed discharged. Annexure-C is certified copy of entire

order sheet in RFA No.406 of 2022. Annexure-D and D1

are the legal notices dated 18.05.2022 issued by accused

and Annexure-E is reply dated 02.06.2022 sent by

complainant. Since these documents are admitted

documents, no prejudice would cause to the accused and

prays to allow the application.

16. The accused have not filed any objections to

this application. Infact, the learned counsel for accused

has fairly conceded that since these documents pertains

to judicial proceedings between the parties, the Court

can look into them.

17. Heard elaborate arguments of both sides and

perused the record.

18. Thus, it is the definite case of the complainant

that accused who are husband and wife borrowed hand

loan of Rs.1.25 crores in four installments i.e. Rs.50

lakhs on 02.04.2014, Rs.25 lakhs on 09.06.2014, Rs.25

lakhs on 08.09.2014 and Rs.25 lakhs on 24.11.2014 to

complete the construction of their house and issued 17 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

undated cheques. Though they agreed to sell 2nd floor of

the construction for a sum of Rs.2 crores and executed

agreement of sale promising to treat the amount so

received by way of hand loan as advance, later when

they leased the 2nd floor to some other person, the

complainant has not pressed for sale of 2nd floor and on

the other hand, demanded repayment of the hand loan.

19. It is the also the case of complainant that

after complainant advanced Rs.50 lakhs on 02.04.2014

and Rs.25 lakhs on 09.06.2014, the accused issued

undated cheque No.976840 for Rs.50 lakhs at Ex.D2 and

467970 for Rs.25 lakhs at Ex.D1 (marked in

C.C.No.12202/2016) by way of security. However on

12.09.2014, when complainant advanced further sum of

Rs.25 lakhs, accused took back cheque No.976840 and

467970 and accused-K.Lalitha issued a consolidated

cheque No.466349 for Rs.1 crore at Ex.P1

(C.C.No.12203/2016). On 24.11.2014, when complainant

advanced further sum of Rs.25 lakhs, accused-


K.Lakshminarasimha        Murthy       issued     undated        cheque
                                18         CRL. A NO.126 OF 2018 C/W
                                               CRL. A NO.127 OF 2018


No.473215           for    Rs.25          lakhs      at      Ex.P1

(C.C.No.12202/2016).

20. It is further contention of the complainant that

when accused aborted his chance of purchasing one floor

of construction made by them, he insisted upon the

accused to return the hand loan and on their instructions

presented the cheques at Ex.P1 of both complaints,

which were issued by way of security for realization.

While the cheque issued by accused-K.Lakshminarasimha

Murthy was dishonoured for 'insufficient funds', the one

issued by accused-K.Lalitha was dishonoured on the

ground of 'stop payment instructions'.

21. Though the accused have admitted borrowing

hand loan of Rs.1.25 crores from the complainant for

construction purpose, they have denied of having agreed

to sell one floor of the construction for Rs.2 crores.

Accused have admitted issue of undated cheques at

Ex.P1 of both complaints, but they have pleaded

discharge by claiming that they have repaid the hand

loan along with interest.

                              19         CRL. A NO.126 OF 2018 C/W
                                             CRL. A NO.127 OF 2018


    22.    As   noted   earlier   the    complainant     is   not

enforcing his right with regard to the sale agreement and

consequently confined his relief to dishonour of the

subject cheques. In the light of the specific defence taken

by the accused and having regard to the fact that they

admit issue of subject cheques, drawn on their account

maintained with their banker and that they bear their

signatures, as held by the Hon'ble Supreme Court in

Kumar Exports, Srikara Rao, Vijaya, Vasanthkumar,

Basalingappa, Uttam Ram and Dashrathbhai,

presumption u/sec.118 and 139 of N.I. Act that the

subject cheques were issued towards repayment of

legally recoverable debt or liability is attracted and

therefore, initial burden is on the accused to rebut the

presumption i.e. to prove that the subject cheques were

issued only for security and they have discharged the

loan and as such instead of returning the subject cheques

to them, to make unlawful gain, the complainant has

presented them for encashment and on their dishonour

chosen to file the complaints to harass them. Only after

the accused rebut the presumption, the burden would 20 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

shift on the complainant to prove his case. Ofcourse,

while the accused are required to rebut the presumption

by preponderance of probabilities, it is for the

complainant to prove his case beyond reasonable doubt.

23. Though the subject cheques are stated to be

issued by way of security, as held by the Hon'ble

Supreme Court in Sampelli Satyanarayan Rao, Sripati

Singh and Sunil Todi, when the accused fails to

discharge his liability, the right of the complainant to

recover the amount due through the cheque issued by

way of security would become enforceable. Merely

labeling a cheque as security would not obviate its

character as instrument designed to meet legally

enforceable debt or liability, once agreement between the

parties provided for which money is due and payable.

The cheque furnished as a security is covered under

provisions of Section 138 of N.I.Act.

24. Despite admitting borrowing loan of Rs.1.25

crores, issue of subject cheques by way of security and

claimed discharge, the accused have cross-examined the 21 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

complainant elaborately touching the validity of various

documents executed by them as per Ex.P8 and capacity

of the complainant to advance huge sum of Rs.1.25

crores to them and whether these facts are reflected in

his income tax returns etc., which is an exercise in futile

in the light of their admission of having borrowed Rs.1.25

crores.

25. In the light of admission by the accused that

they have borrowed hand loan of Rs.1.25 crores from the

complainant and claimed discharge, the dispute between

the parties boiled down to the issue whether the accused

have succeeded in establishing due discharge of the hand

loan taken from the complainant.

26. During the course of their evidence, both

accused who are examined as DW1 in their respective

cases have deposed that they repaid Rs.1.25 crores by

selling their property through 3 sale deeds to different

purchasers and accumulated Rs.50 lakhs in cash and

they withdrew remaining Rs.75 lakhs from their bank

account and in all paid Rs.1.25 crores to the complainant.

                           22        CRL. A NO.126 OF 2018 C/W
                                         CRL. A NO.127 OF 2018

The 3 sale deeds through which accused have claimed to

have accumulated Rs.50 lakhs in cash are marked as

Exs.D4 to 6 in C.C.No.10202/2016.

27. As admitted during his cross-examination by

accused-K.Lakshminarasimha Murthy, for construction

purpose in addition to borrowing Rs.1.25 crores from the

complainant, he has borrowed Rs.1.9 crores from one

Jayaram and for recovery of the same, he has filed

O.S.No.7996/2016. He had borrowed Rs.3 lakhs from

Smt.Gayatri w/o Prem Babu. He has admitted that Prem

Babu has filed C.C.No.17862/2016 for dishonour of

cheque in a sum of Rs.23 lakhs. He has conceded that in

O.S.No.450/2016 filed by him against the complainant he

has pleaded that to repay Rs.1 crores taken from the

complainant, he had taken loan of Rs.1 crore from bank.

He has also admitted that for recovery of Rs.1.25 crores

complainant filed O.S.No.3090/2016 and in the said suit

also he has taken up a contention that he would take

loan from bank and repay the money due to the

complainant. He has admitted that the contents of 23 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

Ex.P14 request letter sent by complainant are correct

and he has not sent any reply to the same. He has also

admitted that in Ex.P7-reply notice, he has claimed that

he has repaid Rs.1 crore and only Rs.25 lakhs is due to

the complainant.

28. Accused-K.Lakshminarasimha Murthy has also

admitted that the purchasers of Ex.D5 to 7 are his

brother and nephews. He has also admitted that in Ex.D6

though it is stated that said consideration is paid through

cheque and demand draft, the numbers of cheque and

demand drafts are left blank. Similarly in Ex.D5 also the

cheque number and date through which the purchaser

has allegedly paid the sale consideration are left blank.

Though he has denied that Ex.D7 does not reflect the

realization of cheque and demand draft as reflected in

sale deeds at Exs.D5 and 6, in the next breath he has

claimed that the cheques and demand drafts might have

been credited to his other account. Admittedly accused

have not produced account statement of their other

account. Though he has denied that Ex.D4 to 6-sale 24 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

deeds are concocted, as admitted by him they were not

produced in the civil suit.

29. The perusal of cross-examination of accused-

K.Lakshminarasimha Murthy makes it amply clear that

the accused have failed to prove that they have

discharged loan of Rs.1.25 crores taken from the

complainant. The documents relied upon by them are

contrary to the defence taken by them. They have failed

to prove that they were in receipt of Rs.50 lakhs in cash

from the purchaser of their property and they were also

in possession of another sum of Rs.75 lakhs in cash and

they paid the same to the complainant towards discharge

of loan of Rs.1.25 crores taken from him. Ofcourse they

have not led any evidence to prove that they have also

paid interest for the said hand loan.

30. At the outset it is relevant to note that

complainant who has lent Rs.1.25 crores to the accused

has paid substantial sum by way of cheques and demand

draft barring a meager amount through cash as detailed

in Ex.P8. Though initially the relationship between the 25 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

complainant and accused was cordial, after the accused

leased out the 2nd floor to some third person without

intimation to the complainant, their relationship stained.

Accused has gone to the extent of filing suit against the

complainant for permanent injunction to restrain him

alleging that he brought rowdies etc. Such being the case

at any stretch of imagination it cannot be accepted that

accused would pay a huge sum of Rs.1.25 crores to the

complainant by way of cash. A prudent person would

never take the risk of complainant denying receipt by

way of cash.

31. If really the accused have repaid the said

loan, they could have done it either through cheque or

demand draft by which they would have proof. Atleast

the accused could have taken an acknowledgment for

having repaid such huge sum of Rs.1.25 crores. From the

oral and documentary evidence placed on record and in

the light of cross-examination of the accused, this Court

has no hesitation to hold that the accused have taken a

false defence of discharge and have miserable failed to 26 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

prove the same even by preponderance of probabilities.

In Sudhik Kumar Bhalla and K Narayan Naik on facts, the

contention of accused that the cheques were issued by

way of security was upheld. Since the accused have

failed to prove the repayment of hand loan taken from

the complainant, there defence that the subject cheques

were issued by way of security cannot be accepted and

therefore these decisions are not applicable to the facts

and circumstances of the present cases. Since the

complainant has not pressed for his right to claim

property of the accused i.e., a floor in the construction

put up by them by way of sale agreement, the other

decisions are not relevant.

32. The findings of the trial Court is contrary to

the oral and documentary evidence placed on record and

as such perverse. The trial Court has failed to appreciate

the evidence led by the parties in its right perspective

and thereby fell into error, calling for interference by this

Court. In the result, the appeals filed by complainant

deserves to be allowed and the accused are liable to be 27 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

convicted for the offence punishable u/sec.138 of N.I.

Act.

33. When the Court comes to the conclusion that

the charge levelled against the accused is proved for the

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

appeal is allowed by setting aside the impugned

judgment and order of acquittal, the next question would

be to what punishment accused are liable.

34. The punishment prescribed for the offence

under Section 138 of the N.I.Act is imprisonment for a

term which may extend to 2 years or with fine which may

extend to twice the amount of cheque or with both. In

the present case, so far as accused-K.Lakshminarasimha

Murthy is concerned, the cheque amount is Rs.25 lakhs.

So far as accused-K.Lalitha is concerned, the cheque

amount is Rs.1 crore. Though accused promised to repay

the hand loan with interest ranging from 18 to 24%, they

have not repaid either the principle or interest. They

have taken up a false defence that they have repaid the

same with interest. Taking into consideration all these 28 CRL. A NO.126 OF 2018 C/W CRL. A NO.127 OF 2018

aspects, this Court is of the considered opinion that it

would be appropriate to sentence the accused to pay fine

which shall be double the cheque amount. In default of

paying the fine sentencing the accused to undergo

imprisonment for a period of 1 year would meet the ends

of justice and accordingly, the following:

ORDER

(i) I.A.No.2/2023 filed in both appeals are allowed.

The documents produced with I.A.No.2/2023

are taken on record.

(ii) Both appeals filed by the complainant under

Section 378(4) of Cr.P.C. are allowed. The

impugned judgment and order dated

11.12.2017 in C.C.No.10202/2016 and

C.C.No.10203/2016, on the file of XXII ACMM,

Bengaluru are set aside.

(iii) Accused-K.Lakshminarasimha Murthy and

K.Lalitha are convicted for the offence

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

                              29        CRL. A NO.126 OF 2018 C/W
                                            CRL. A NO.127 OF 2018


    (iv)   Accused-K.Lakshminarasimha               Murthy      is

sentenced to pay fine in a sum of Rs.50 lakhs.

In default of payment of fine, he shall undergo

imprisonment for a period of 1 year.

(v) Similarly accused-K.Lalitha is sentenced to pay

fine in a sum of Rs.2 crores. In default of

payment of fine, she shall undergo

imprisonment for a period of 1 year.