Karnataka High Court
T S Sathyanarayana vs Chamundi on 22 April, 2024
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CRL.A No. 1785 of 2021
NC: 2024:KHC:15913
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 22ND DAY OF APRIL, 2024
BEFORE
THE HON'BLE MS JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1785 OF 2021
BETWEEN:
T S SATHYANARAYANA
S/O LATE T R SIDDARAJU,
AGED ABOUT 61 YEARS
RESIDING AT NO.3042,
18TH CROSS, NEAR CAUVERY CIRCLE,
HEBBAL II STAGE, MYSORE - 570017
...APPELLANT
(BY SRI. KARUMBAIAH T.A, ADVOCATE)
AND:
CHAMUNDI
W/O GANGADHARA,
AGED ABOUT 46 YEARS
R/AT NO.5608, II MAIN,
3RD CROSS, HEBBAL,
MYSORE - 570 017
Digitally signed ...RESPONDENT
by REKHA R
Location: High (BY SRI. SRINIVASA D C, ADVOCATE)
Court of
Karnataka THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF
ACQUITTAL DATED 27.09.2021 PASSED BY THE V J.M.F.C.,
MYSURU IN C.C.NO.933/2020 AND CONVICT THE ACCUSED
FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE
N.I ACT AND DIRECT HIM TO PAY COMPENSATION DOUBLE
THE CHEQUE AMOUNT TO THE APPELLANT IN THE INTEREST
OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
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JUDGMENT
This appeal filed under Section 378 (4) of Cr.P.C is by
the complainant challenging the acquittal of
respondent/accused for the offence punishable under
Section 138 of Negotiable Instruments Act, 1881 (for short
'the Act').
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. It is the case of the complainant that accused is
well known to him and with that acquaintance in order to
meet her household expenses and also for urgent legal
necessities accused approached complainant for hand loan
in the sum of Rs.6 lakhs with a promise to repay the same
within three months. Accordingly, complainant paid Rs.6
lakhs to the accused in the month of October 2017. When
accused failed to keep up with her promise even after
lapse of six months and complainant demanded back the
money, accused issued post dated 06.03.2018 cheque for
Rs.6 lakhs with the promise of prompt payment on
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presentation. However, on 17.05.2018, when complainant
presented the cheque for encashment, it was returned
unpaid with endorsement "Funds insufficient". Hence
complainant got issued a legal notice dated 18.05.2018.
Despite due service of notice the accused has not cared to
pay the amount due and hence, the complaint.
4. The accused has appeared before the trial Court
and contested the case by pleading not guilty.
5. In order to prove the allegations against the
accused, complainant has examined himself as PW-1 and
his son as a PW-2. He has relied upon Ex.P1 to 8.
6. During the course of her statement under
Section 313 Cr.P.C, accused has denied the incriminating
evidence led by the complainant.
7. Accused has given defence evidence by
examining herself as a DW-1. She has got marked Ex.D1
to 3.
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8. Vide the impugned judgment and order the trial
Court has acquitted the accused.
9. Being aggrieved by the same, complainant has
filed this appeal, contending that the impugned judgment
and order are not sustainable either in law or on facts and
liable to be set aside. Having regard to the fact that
accused admit the fact that the cheque in question
belongs to her, drawn on her account, maintained with her
banker and it bears her signature and also the fact that
complainant and accused are known to each other, the
trial Court ought to have convicted the accused. Though,
the trial Court has held that presumption under Section
139 of N.I Act is attracted, it has erred in not accepting
the case of the complainant and acquitting the accused.
Despite the complainant relying upon the decisions of the
Hon'ble Supreme Court and this Court, the trial Court has
failed to appreciate and apply them to the present case.
The trial Court has mainly acquitted the accused on the
ground that complainant has failed to prove the legal debt.
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Viewed from any angle, the impugned judgment and order
are not sustainable and pray to allow the appeal, convict
the accused and sentence her in accordance with law.
10. On the other hand learned counsel for accused
supported the impugned judgment and order and
submitted that at the relevant point of time accused never
had the necessity to borrow and complainant did not have
the financial capacity to lend Rs.6 lakhs. Misusing a Blank
cheque issued by the accused in respect of Chit
transaction with the wife of accused, complainant has filed
the unrighteous complaint and sought for dismissal of
appeal.
11. In support of his arguments learned counsel for
accused has relied upon the following decisions.
(i) Basalingappa Vs. Mudibasappa
(Basalingappa)1
(ii) APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)2
(2019) 5 SCC 418
(2020) 12 SCC 724
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12. Heard arguments of both sides and perused the
record.
13. Having regard to the fact that the accused does
not dispute that the cheque in question belongs to her,
drawn on the account maintained with her banker and it
bears her signature, presumption under Section 139 of the
N.I Act is operating in favour of the complainant, placing
the initial burden on the accused to prove that the cheque
was not issued towards repayment of any debt or liability
and on the other hand to establish the circumstances in
which the cheque has reached the hands of the
complainant. Though in the reply notice, accused has not
disputed the financial capacity of complainant, during the
trial he has challenged his financial capacity.
14. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)3, the Hon'ble
Supreme Court held that in order to draw presumption
(2014) 2 SCC 236
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under Sections 118 and 139 of N.I Act, the burden lies on
the complainant to show that:
(i) She had the requisite funds for advancing the
sum of money/loan in question to accused.
(ii) The issuance of cheque by accused in support
of repayment of money advanced was true
and
(iii) The accused was bound to make payment as
had been agreed while issuing cheque in
favour of the complainant.
15. As held by the Hon'ble Supreme Court in Tedhi
Singh Vs Narayan Das Mahant (Tedhi Singh)4, where the
accused has failed to send reply to the legal notice,
challenging the financial capacity of the complainant or he
has sent reply, but not challenged the financial capacity of
complainant, at the first instance, complainant need not
prove his financial capacity. However, at the trial if the
financial capacity of complainant is challenged, then it is for
the complainant to prove the same.
2022 SCC OnLine SC 302
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16. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)5, the Hon'ble Supreme Court
held that when accused raises issue of financial capacity of
complainant, in support of his probable defence, despite
presumption operating in favour of complainant regarding
legally enforceable debt under Section 139 of N.I. Act, onus
shifts again on the complainant to prove his financial
capacity by leading evidence, more particularly when it is a
case of giving loan by cash and thereafter issue of cheque.
17. In Vijay Vs. Laxman and Anr (Vijay)6,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)7 and
K.Prakashan Vs. P.K.Surenderan (K.Prakashan)8, also
the Hon'ble Supreme Court held that the presumption
under Section 139 of N.I. Act, is a rebuttable presumption
and when accused rebut the same by preponderance of
probabilities, it is for the complainant to prove his case
beyond reasonable doubt including the financial capacity.
(2020) 12 SCC 724
(2013) 3 SCC 86
(2015) 1 SCC 99
(2008) 1 SCC 258
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18. In Basalingappa, the Hon'ble Supreme Court
held that it is sufficient for accused to rebut the
presumption by preponderance of probabilities. Where
accused dispute the financial capacity of complainant, it is
for the complainant to prove his financial capacity. At the
same time the Hon'ble Supreme Court held that in case of
acquittal the Appellate Court can interfere with the
findings of the trial Court only when it is perverse i.e.,
against the weight of the evidence.
19. Keeping the ratio in the above decisions in
mind, it is necessary to examine whether complainant has
proved that in the month of October 2017, accused
borrowed hand loan of Rs.6 lakhs and the subject cheque
was issued towards repayment of the same, which came
to be dishonoured for want of sufficient funds. Since the
accused has challenged the financial capacity of
complainant, the burden is on him to prove his financial
capacity.
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20. Accused admit the receipt of legal notice and
claim that through her counsel, she has sent reply as per
Ex.D1 and 2. Complainant has disputed that accused has
sent reply. Accused has not produced the postal
acknowledgement regarding the service of reply notice
sent to the address of counsel for the complainant from
who the legal notice was received. Ex.D3 is the postal
receipt for having sent reply notice to the address of
counsel for complainant through RPAD. Complainant do
not dispute the address of his counsel to whom the reply
notices were addressed. Consequently, as per Section 27
of General Clauses Act, where any Central Act or
Regulation made after the commencement of the General
Clauses Act, authorize or requires any document to be
served by post, whether the expression serve or either of
the expressions give or send, or any other expression is
used, then, unless a different intention appears, the
service shall be deemed to be effected by properly
addressing, preparing and posting by registered post, a
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letter containing the document, and, unless the contrary is
proved to have been effected at the time at which the
letter would be delivered in the ordinary course of post.
21. In the light of this provision, it is deemed that
the reply notice sent to the counsel for complainant has
reached him. The complainant has failed to prove the
contrary. In the reply notice, the accused at the earliest
available opportunity has disputed the fact of having
borrowed hand loan of Rs.6 lakhs and issued the subject
cheque towards repayment of the same. On the other
hand, she has claimed that a blank cheque was issued in
respect of Chit fund run by the wife of complainant and
misusing it complaint is filed.
22. It is pertinent to note that since the accused
has disputed the very transaction itself, in the reply notice
she has not disputed the financial capacity of the
complainant. However, at the trial, she has challenged the
financial capacity of the complainant. As help by the
Hon'ble Supreme Court in Tedhi Singh, at the trial, if the
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financial capacity of complainant is challenged, then it is
necessary for the complainant to prove the same.
23. At the relevant point of time when he had
allegedly lent hand loan of Rs.6 lakhs, complainant was
working as driver in case KSRTC. He has deposed that at
that time, he was getting salary of Rs.25,000/- p.m. He
has also deposed that he had 2 deposits in Mysore and 1
deposit in Bengaluru Credit Co-operative Society and also
out of the savings received from the rent and advance
amount and also utilising the money kept for purchasing a
bus, he paid Rs.6 lakhs to the Accused. However, the
complainant has not produced even a scrap of paper to
prove that he had and withdrew deposits from the credit
cooperative societies and also was in receipt of rent and
advance and also out of the savings meant for purchasing
the bus, he paid Rs.6 lakhs to the accused. Again, in page
No.2 of his cross-examination, the complainant has
deposed that he withdrew Rs.1,50,000/- from the co-
operative societies, he had received Rs.3 lakhs by
mortgaging his house and Rs.1,50,000/- from the income
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of travel agency run by him. He has not produced any
documents to show that he was running a travel agency
and had received the above referred amount.
24. To prove his financial capacity, the complainant
has examined his son Viveka T.S as PW-2. He has deposed
that he paid Rs.3 lakhs which he had saved for purchasing
a bus and accused requested for hand loan of Rs.6 lakhs
from his father in his presence. However, in the complaint,
the fact of presence of PW-2 Vivek.T.S when accused
requested for hand loan of Rs.6 lakhs is not forth coming.
Even complainant has also not deposed to this effect. It is
an improvement made by PW-2 during the course of
evidence.
25. During his cross-examination, PW-2 has
deposed that he had availed loan of Rs.3 lakhs from Indus
Ind Bank on his tempo traveller. Even though he has
produced his pass book at Ex.P8, as admitted by PW-2
himself it does not reflect the receipt of Rs.3 lakhs from
Indus Ind Bank. During the cross-examination of the
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accused, a suggestion is made that in order to improve
the service station business run by her husband, she
borrowed the hand loan of Rs.6 lakhs. However, in the
complaint, this fact is not forthcoming. Therefore, the
complainant has miserably failed to prove his financial
capacity and that at the relevant point of time, he was in
possession of Rs.6 lakhs and he handed over the same to
the complainant by way of hand loan.
26. In order to prove that the subject cheque was
issued to the wife of complainant in connection with Chit
fund transaction, the accused is emphazising on the fact
that it was issued blank. From the manner in which
accused affixed her signature it indicates that she is not an
educated person and appears to know only to sign. While
her signature is in Kannada, the rest of the document is
filled in English. This factor also supports the contention of
accused that the subject cheque was issued blank and it
has been later filled up to suit the convenience of
complainant.
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27. Thus, while the complainant has failed to prove
his financial capacity and that he has lent hand loan of
Rs.6 lakhs to the accused, by preponderance of
probabilities accused has established that the cheque in
question was not issued towards repayment of any legally
recoverable debt or liability and on the other hand, the
circumstances in which it has reached the hands of
complainant. Taking into consideration the oral and
documentary evidence placed on record, the trial Court
has come to a correct conclusion that the allegations
against accused are not proved and acquitted her. This
Court finds no justifiable grounds to interfere with the
findings of trial Court. In the result of the appeal fails and
accordingly the following:
ORDER
(i) Appeal filed by the complainant under
Section 378(4) of Cr.P.C. is dismissed.
(ii) The impugned judgment and order dated
27.09.2021 in C.C.No.933/2020 on the
file of V JMFC, Mysuru, is confirmed.
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(iii) The Registry is directed to send back the
trial Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
