Sri Somanath Mestha vs Sri G Sainath Shet
2023 Latest Caselaw 7338 Kant

                          1             CRL.A.No.667 of 2012



   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 27TH DAY OF OCTOBER, 2023

                       BEFORE

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

          CRIMINAL APPEAL NO.667 OF 2012

BETWEEN:

SRI SOMANATH MESTHA
S/O LAXMANA MESTHA
R/O GUJJADY
KUNDAPURA TALUK
UDUPI DISTRICT
                                           ...APPELLANT
(BY SRI. MAHESH KIRAN SHETTY, ADVOCATE )

AND:

SRI G SAINATH SHET
S/O KRISHNA SHET
R/AT RAMANNA SHETTY COMPOUND
MARUTHI VEETHIKA
UDUPI, UDUPI DISTRICT
                                       .....RESPONDENT

(BY SRI. GANESH SHET.N, ADVOCATE)

    THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CODE OF CRIMINAL PROCEDURE PRAYING TO a) SET
ASIDE THE JUDGMENT DATED 21.04.2012 PASSED IN THE
C.C.NO.363/2002 ON THE FILE OF THE LEARNED ADDL. CIVIL
JUDGE AND JMFC, KUNDAPURA; c) ALLOW THE COMPLAINT
FILED BY THE APPELLANT IN C.C.NO.363/2002 ON THE FILE
OF THE LEARNED ADDITIONAL CIVIL JUDGE AND JMFC,
KUNDAPURA AND TO FURNISH THE RESPONDENT IN
ACCORDANCE WITH LAW FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENT ACT;
d) TO COMPENSATE THE APPELLANT SUITABLE IN THE
INTEREST OF JUSTICE AND EQUITY.
                                2               CRL.A.No.667 of 2012



     THIS CRIMINAL APPEAL HAVING BEEN HEARD AND
RESERVED    ON    25.07.2023, COMING   ON   FOR
PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:


                        JUDGMENT

Being aggrieved by dismissal of complaint filed by

him under Section 200 Cr.P.C alleging offence punishable

under Section 138 of N.I. Act against the respondent

accused, appellant/complainant is before this Court under

Section 378 Cr.P.C.

2. For the sake of convenience, the parties are

referred to by their rank before the trial Court.

3. It is the case of the complainant that he

knows the accused since five years. Accused for his

personal necessity borrowed loan of Rs.78,000/- to do

jewellery business and promised to repay it on demand.

Towards repayment of the said loan, accused issued

cheque dated 05.09.2001, with a promise to arrange

funds for payment of the same. However, when

complainant presented for encashment, it was

dishonoured on the ground 'Funds insufficient' and

returned with the memo dated 24.09.2001. Complainant

got issued a legal notice dated 28.09.2001 and it is duly

served on the accused on 04.10.2001. However, accused

has sent reply making false allegations. Therefore, the

present complaint is filed.

4. After due service of summons, accused

appeared through counsel and contested the matter. He

pleaded not guilty and claimed trial.

5. In support of his case, complainant got

himself examined as PW-1 and got marked Ex.P1 to 11.

6. During the course of his statement under

Section 313 Cr.P.C, accused has denied incriminating

evidence brought on record by the complainant.

7. In fact, he has chosen to examine the

Managing Partners of Ekadanta Finance and Nisarga

Finance, of which complainant is partner, as DWs-1 and

2. Accused is examined as DW-3. He has relied upon

Ex.D1 to 13.

8. Vide the impugned judgment and order the

trial Court dismissed the complaint and acquitted the

accused.

9. Being aggrieved by the same, the complainant

has come up with this appeal contending that the

impugned judgment and order of the trial Court is

against law, facts and probabilities of the case and as

such it is liable to be dismissed. The presumption under

Section 118 and 139 of N.I. Act is clearly in favour of the

complainant and as such burden is on the accused to

rebut the said presumption. The trial Court has failed to

raise this presumption. The trial Court has erred in not

appreciating the facts and circumstances of the case in

right perspective. Though the accused has entered into

the witness box and lead oral and documentary evidence,

he has failed to rebut the presumption. In the absence of

specific defence being taken by the accused, he has

failed to rebut the presumption. Viewed from any angle

the impugned judgment and order is not sustainable and

prays to allow the appeal, convict the accused and

sentenced him appropriately.

10. In support of his arguments, the learned

counsel for complainant has relied upon the following

decisions.

(i) M/s. Kalamani Tex and Anr Vs. P. Balasubramanian (M/s. Kalamani Tex)1

(ii) Sumeti Vij Vs. M/s Paramount Tech Fab Industries (Sumeti Vij)2

(iii) Rohitbhai Jivanlal Patel Vs. State of Gujarat & Anr (Rohitbhai Jivanlal Patel)3

(iv) T.P.Murugan (Dead) Thr. LRs. Vs. Bojan (T.P.Murugan)4

11. On the other hand, learned counsel

representing the accused has supported the impugned

judgment and order and sought for dismissal of the

appeal.

(2021) 5 SCC 283

AIR 2021 SC 1281

(2019) 18 SCC 106

AIR 2018 SC 3601

12. In support of his arguments, the learned

counsel for respondent has relied upon the following

decision:

(i) Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel and Anr

(Dashrathbhai)

13. Heard arguments of both sides and perused

the record.

14. Accused has disputed that he borrowed hand

loan of Rs.78,000/- from the complainant and towards

repayment of it, he has issued the cheque in question.

He has taken up a specific defence that complainant is a

partner of Ekadantha Finance and Nisarga Finance.

Accused has availed loan of Rs.10,000/- from Ekadantha

Finance and Rs.20,000/- from Nisarga Finance. At the

time of granting loan the subject cheques was taken

blank from him except his signatures. His brother is

Guarantor to both the loans. Though he was able to pay

certain sums, thre was still balance to be paid. Since he

AIR 2021 SC 1281

was harassed endlessly for repayment of the said loan

and due to financial difficulties, he is shifted to Udupi on

13.09.2001.

15. Somnath Mestha and Purusha Mestha, under

the guise of settlement took him to Kundapura and in the

lawyer's office, his signatures were taken to blank stamp

papers. However, immediately on the next day, he sent a

legal notice to both Finances. Therefore, instead of

utilising the stamp papers and as the limitation for

recovery of loans granted by the Finances was over,

utilising the blank cheque, through the complainant, a

false complaint is filed. Accused has also taken up a

specific defence that complainant is not having financial

capacity to lend and he never had the necessity of

borrowing Rs.78,000/- from the complainant and has

sought for dismissal of the complaint.

16. At the outset, it is relevant to note that

accused admitted that the subject cheque is drawn on his

account maintained with his banker and it bears his

signature. Hence, as held in M/s Kalamani Tex,

Sumeti Vij, Rohitbhai Jivanlal Patel and TP

Murugan, the presumption under Sections 118 and 139

of the N.I.Act that the cheque in question was issued

towards repayment of any legally recoverable debt or

liability is attracted and the burden is on the accused to

rebut the presumption. While rebutting the presumption,

it is for the accused to establish the circumstances under

which the subject cheque reached the hands of the

complainant and that it was not issued for discharge of

any legally recoverable debt or liability. Only after the

accused discharges the burden placed on him, the

complainant would be called upon to prove his case. Of

course it is sufficient for the accused to rebut the

presumption by preponderance of probabilities, whereas

complainant is required to prove his case beyond

reasonable doubt.

17. As already noted DWs-1 and 2, who are the

witnesses examined for the accused are no other than

the Managing Partners of Ekadantha Finance and Nisarga

Finance of which complainant is one of the partner.

Through the cross-examination of PW-1, DWs-1 and 2

the accused has proved that he had borrowed

Rs.10,000/- and Rs.20,000/- respectively from these two

Financial and as on 13.09.2001, he was still due to them.

Of course the complainant has denied that in this

connection on 13.09.2001, complainant and one Purusha

Mehta tried to kidnap him. Though the public aborted

their attempt, later on he was taken to Kundapura to an

advocate's office and his signatures were taken to blank

stamp papers. Since immediately on the next day,

accused issued a legal notice, making these allegations

and also filed a private complaint, the complainant did

not choose to utilise the blank stamp papers containing

his signatures and on the other hand used the blank

cheques to file the complaints.

18. Having regard to the fact that though the

accused was due to repay the portion of the loan taken

from both Finances, the complainant as well as other

partners have not chosen to prosecute him for recovery

of the amount due. In Ex.D11, the accused has clearly

pleaded that he was still due to repay the loan to both

Finances. Even though complainant is partner of these

Finances, in his reply notice at Ex.D12, he has not

chosen to either admit or deny the said contention of

accused. During his cross-examination that PW-1 has

admitted the loan taken by accused from these Finances,

but expressed ignorance to the suggestion that he was

still due in certain sums.

19. However, during the cross-examination of the

accused, the complainant has set up a defence that the

amount due from the accused were subsequently paid as

per Ex.D9, which is dated 29.09.2003 i.e, subsequent to

the filing of the complaint. In fact, during his cross-

examination, the accused has deposed that since his

brother was a Guarantor to the loan taken from these

two Finances, unable to bear the harassment, he has

repaid the loan. Thus, as on 13.09.2001, the accused

was still due to these two Finances and it supports his

defence that to force him to repay amount due, an

attempt was made to kidnap him and his signatures were

taken to blank stamp papers. It probabalize defence of

accused that because he choose to send legal notice on

the very next day, partners of Finances were not able to

utilise them and therefore making use of blank cheque

available with them, they got filed the complaint through

the complainant.

20. The defence of the accused that Ex.P1 cheque

was issued blank is supported by the fact that the

signature of accused and rest of the contents are in

different ink. In fact the evidence of accused prove the

fact that he is semi-illiterate and the contents of Ex.P1

are not in his handwriting. It is pertinent to note that

accused has sent a legal notice dated 27.09.2001 to both

Ekadantha Finance and Nisarga Finance regarding his

kidnap etc. The complainant has chosen to send legal

notice at Ex.P3 specifying the date as 28.09.2001.

21. However, as admitted by him it is posted on

03.10.2011 and the notices at Ex.D4 and 6 sent by

accused are prayer in point of time to Ex.P3. Of course

the complaint filed by the accused came to be dismissed

on the ground that there is no sufficient material to

frame charge. It probabalise the defence of accused.

Moreover, in the complaint, the complainant has not

stated the time when he advanced Rs.78,000/- to the

accused. However, during his cross-examination, the

complainant has stated that he lent the said amount to

the accused about 6-7 months prior to the issue of Ex.P1

cheque. Ex.P1 is dated 05.09.2001. 6-7 months prior to

it would be during February or March 2001.

22. Having regard to the fact that accused was

not regular in repaying the loan taken from both

Finances of which Complainant is one of the partner and

he had left the town and settled at Udupi and there is

allegations that the partners of said Finances, including

the complainant had to go in search of him, it creates

doubt whether despite all these facts operating against

the accused, the complainant would venture to advance

him a substantial sum of Rs.78,000/-, that too without

taking any supporting documents. Having regard to the

fact that except the signature, the rest of writing in Ex.P1

is not in the handwriting of accused, it probabalise the

defence of accused that the cheque was taken blank and

later on it is filled up to suit the convenience of

complainant. Thus through oral and documentary

evidence placed on record and through the cross-

examination of PW-1, DWs-1 and 2 the accused has

rebutted the presumption under Sections 118 and 139 of

N.I. Act and thereby shifting the burden on the

complainant to prove his case beyond reasonable doubt.

23. As noted earlier, the accused has taken up a

specific defence that complainant is not having financial

capacity to lend him Rs.78,000/-. In fact he has cross-

examined the complainant on this aspect and elicited

that complainant has taken loans for purchasing two

boats and even after 10 years he is repaying the same.

Though he has stated that he is having surplus income of

Rs.1,00,000/- through all his ventures, admittedly, the

complainant has not produced any proof that when he

allegedly paid Rs.78,000/- to the accused, he had the

said amount with him either in his account or otherwise.

24. Despite his prolonged cross-examination

regarding his capacity to lend Rs.78,000/- to the

accused, complainant has not chosen to produce any

evidence regarding his financial capacity. Taking into

consideration the oral as well as the documentary

evidence placed on record, the trial Court has come to a

correct conclusion that the accused has rebutted the

presumption and thereby shifting the burden on the

complainant. However the complainant has failed to

prove the allegations against accused beyond reasonable

doubt. On re-appreciation of oral and documentary

evidence placed on record, this Court finds no justifiable

grounds to interfere with the conclusions arrived at by

the trial Court. In the result, the appeal fails and

accordingly the following:

ORDER

(i) Appeal filed by the complainant is

dismissed.

(ii) The impugned judgment and order dated

21.04.2012 in C.C.No.363/2002 on the file

of Addl.Civil Judge and JMFC, Kundapura, is

confirmed.

(iii) The Registry is directed to send back the

trial Court records along with copy of this

order forthwith.

Sd/-

JUDGE

RR