Karnataka High Court

Smt. Saroja.S vs M/S Satabdi Engineering Works on 3 April, 2024

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                                                       CRL.A No. 93 of 2015
                                                        NC: 2024:KHC:13678




               IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                     DATED THIS THE 3RD DAY OF APRIL, 2024

                                       BEFORE
                       THE HON'BLE MS JUSTICE J.M.KHAZI
                         CRIMINAL APPEAL NO.93 OF 2015
              BETWEEN:

                   SMT. SAROJA.S
                   W/O LATE M DEVARAJ,
                   AGED ABOUT 43 YEARS,
                   R/AT NO.36, RAGHAVENDRA NILAYA,
                   KRISHNANAGARA MAIN ROAD,
                   CHIKKADEVASANDRA,
                   K R PURAM, BENGALURU - 560 036
                                                               ...APPELLANT
              (BY SRI. M S NAGARAJA, ADVOCATE)

              AND:

                   M/S SATABDI ENGINEERING WORKS
                   C-90, ITI INDUSTRIAL ESTATE,
                   WHITEFIELD ROAD, MAHADEVAPURA,
                   BENGALURU - 560 048
                   REP BY ITS L A HOLDER,
Digitally signed
by REKHA R         SRI ASHOK MANDAL
Location: High                                               ...RESPONDENT
Court of         (BY SRI. G JEEVA PRAKASH, ADVOCATE)
Karnataka
                    THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C
              PRAYING THAT a) AFTER EXAMINE THE LEGALITY, PROPRIETY
              AND CORRECTNESS OF THE IMPUGNED JUDGMENT BE
              PLEASED TO SET ASIDE THE JUDGMENT OF ACQUITTAL
              PASSED BY THE LEARNED P.O. AND ADDL. SESSIONS JUDGE,
              F.T.C.-III, MAYO     HALL,  BENGALURU   IN   CRL.APPEAL
              NO.25011/2013 DATED 25.11.2014; b) CONSEQUENTLY,
              RESTORE THE JUDGMENT OF CONVICTION PASSED BY THE
              LEARNED XIV ADDL. CHIEF METROPOLITAN MAGISTRATE,
              MAYO HALL AT BENGALURU IN C.C.NO.35785/2010 DATED
              17.12.2012; c) GRANT SUCH OTHER EQUITABLE RELIEFS
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                                                 CRL.A No. 93 of 2015
                                                  NC: 2024:KHC:13678




DEEMED FIT UNDER THE CIRCUMSTANCES OF THE CASE AND
IN THE INTERESTS OF JUSTICE AND EQUITY.

    THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE
COURT DELIVERED THE FOLLOWING:

                              JUDGMENT

In this appeal filed under Section 378(4) of Cr.P.C,

the complainant has challenged the acquittal of

respondent/accused for the offence punishable under

Section 138 of Negotiable Instruments Act, 1881 (for short

'N.I. Act'), by the Session Court by reversing the

conviction imposed by the trial Court.

2. For the sake of convenience, the parties are

referred to by their rank before the trial Court.

3. Complainant filed the complaint against accused

contending that in the first week of June 2009, accused

approached the complainant for financial assistance for the

purpose of his business and availed hand loan of

Rs.6,50,000/- on 10.6.2009. He agreed to repay the same

within 10 months and issued a post dated 27.05.2010

cheque for Rs.6,50,000/-. On the direction of the accused

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when complainant presented the cheque for realization, it

was returned unpaid/dishonoured with endorsement

"Debit is not allowed". Complainant got issued legal notice

to the accused, requesting him to pay the amount due

under the cheque. Despite service of notice, the accused

has neither paid the amount due nor sent any reply and

hence the complaint.

4. After due service of summons, the accused has

appeared before the trial Court and contested the case by

pleading not guilty to the plea recorded by the trial Court.

5. In order to prove the allegations against the

accused, complainant got herself examined as PW-1 and

relied upon Ex.P1 to 7.

6. During the course of his statement under

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

incriminating evidence led by the complainant.

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7. In fact, the accused has stepped into the

witness box and examined himself as DW-1. No

documents are marked on behalf of the accused.

8. Vide the judgment and order dated 17.12.2012,

the trial Court held the accused guilty of the of the charge

and sentenced him to pay fine in a sum of Rs.7,00,000/-

with default sentence. Out of the fine amount, a sum of

Rs.6,90,000/- was ordered to be paid to the complainant

by way of compensation.

9. Aggrieved by the same, the accused

approached the Session Court in Crl.A.No.25011/2013.

Vide the impugned judgment and order the Sessions Court

has allowed the appeal, setting aside the judgment and

order of the trial Court and acquitted the accused.

10. Aggrieved by the same the complainant is

before this Court contending that the order of acquittal

passed by the Session Court by reversing the findings of

conviction recorded by the trial Court is highly arbitrary,

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capricious, perverse, illegal and the same is liable to be

set aside. The Sessions Court has committed gross error in

not appreciating the evidence in proper perspective. The

findings of the Sessions Court are contrary to the evidence

placed on record and as such it is liable to be set aside.

The Sessions Court has totally ignored the evidence and

documents produced by the complainant and has not

given weight to the same. When the accused is not

disputing the issue of cheque and his signature, the

complainant has proved existence of legally recoverable

debt and the Sessions Court has committed grave error in

not considering the same. The Sessions Court has

committed grave error in reversing the findings of the trial

Court without proper appreciation of the evidence placed

on record. There is no application of mind to the fact that

the accused has failed to rebut the presumption under

Section 139 of N.I Act. The Sessions Court has also not

applied to the ratio in the decision of the Hon'ble Supreme

Court in Rangappa Vs. Sri.Mohan (Rangappa)1.

(2010) 11 SCC 441

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11. The Sessions Court has also erred in observing

that complainant had no financial capacity to lend loan of

Rs.6,50,000/- especially when the accused has failed to

rebut the evidence of complainant that she was in

possession of Rs.10,00,000/- received from her husband,

by selling the property. The Sessions Court is not justified

in reversing the well reasoned judgment of the trial Court,

solely on the ground that complainant has failed to prove

her financial capacity. Viewed from any angle, the

impugned judgment and order is not sustainable and pray

to allow the appeal, set aside the judgment and order of

the Sessions Court and restore the judgment and order of

the trial Court.

12. On the other hand, learned counsel appearing

for accused has supported the judgment and order passed

by the Sessions Court and submitted that the husband of

complainant and accused were friends and he used to go

to the factory of accused and assist him and could lay his

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hands on the cheque book and utilizing one such a

cheque, false complaint is filed. He also submitted that in

the reply notice itself, at the earliest available opportunity,

he has denied the alleged transaction and taken up a

specific defence that the husband of complainant has

misused one of the cheques and filed false complaint. He

also submitted that at the trial the financial capacity of

complainant is challenged and she has failed to prove her

financial capacity and taking into consideration the oral

and documentary evidence placed on record the Sessions

Court has rightly reversed the judgment and order of the

trial Court and sought for dismissal appeal also.

13. Heard elaborate arguments of both sides and

perused the record.

14. Having regard to the fact that the accused admit

that cheque in question belongs to him, drawn on his

account maintained with his banker and it bears his

signature, presumption under Section 139 of the N.I Act is

operating in favour of the complainant, placing the initial

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burden on the accused to prove that the cheques were 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. In the

reply notice, having denied the very transaction, naturally

the accused has not disputed the financial capacity of

complainant to lend him Rs.6,50,000/. However, at the trial

he has challenged her financial capacity.

15. However, in John K.Abraham Vs. Simon C.

Abraham & Anr (John K.Abraham)2, the Hon'ble

Supreme Court held that in order to draw presumption

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

(2014) 2 SCC 236

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(iii) The accused was bound to make payment as had been agreed while issuing cheque in favour of the complainant.

16. As held by the Hon'ble Supreme Court in Tedhi

Singh Vs Narayan Das Mahant (Tedhi Singh)3, where the

accused has failed to send reply to the legal notice,

challenging the financial capacity of the 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. As noted earlier in the present case though

the accused has sent reply, therein he has not challenged

the financial capacity of complainant, but at trial he has

challenged their financial capacity.

17. In Basalingappa Vs. Mudibasappa

(Basalingappa)4, the Hon'ble Supreme Court held that

when accused dispute the financial capacity of complainant

to pay the amount and lead evidence to prove it and thereby

2022 SCC OnLine SC 302

(2019) 5 SCC 418

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probabilise his defence, then burden would be on the

complainant to establish his financial capacity.

18. In fact 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 her

financial capacity by leading evidence, more particularly

when it is a case of giving loan by cash and thereafter issue

of cheque.

19. 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

(2020) 12 SCC 724

(2013) 3 SCC 86

(2015) 1 SCC 99

(2008) 1 SCC 258

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when accused rebut the same by preponderance of

probabilities, it is for the complainant to prove his case

beyond reasonable doubt including his financial capacity.

20. Keeping in mind the ratio in the above decisions

of the Hon'ble Supreme Court and having regard to the

fact that accused has challenged the financial capacity of

complainant, at the outset it is necessary to examine

whether the complainant has proved her financial capacity

after which it would be necessary for the accused to prove

his defence.

21. During her cross-examination, complainant has

admitted that her late husband used to visit the factory of

accused and assist him in his office work. However, she

has denied that her husband used to do mechanical and

other official work in the factory of accused and also

looking after the cheque transaction in his factory. During

the course of his evidence, the accused has deposed that,

the husband of complainant namely late M Devaraj was his

friend and earlier he and accused worked in VST Tillers

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and Tractors Ltd, for a period of 20 years and after

resigning from the said factory, he started his own

engineering works in the name and style of Satabdhe

Engineering Works with his wife as Proprietor and he was

the PA holder. He has also deposed that during his leisure

time late Devaraj used to visit his factory and assist him.

22. Though the accused has deposed that he used

to pay certain amount to the services rendered by late

Devaraj, no such documents are produced. However, the

evidence of accused coupled with admission by

complainant that the late husband of complainant used to

regularly visit the factory of accused and assist him in the

office work supports the defence of the accused that he

was able to lay his hands on the cheque maintained by the

accused.

23. Now coming to the defence of the accused that

complainant never had the financial capacity to lend him

hand loan in a sum of Rs.6,50,000/-. During the course of

his evidence, the accused has specifically deposed that the

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complainant herself has taken bank loan for purchasing

house and paying installments. Even her late husband had

purchased a car on hire purchase and the installments

were also being paid and in such situation, question of she

lending hand loan of Rs.6,50,000/- would not arise. In

fact, accused has cross-examined the complainant

elaborately with regard to her financial capacity.

24. It is pertinent to note that complainant is a

homemaker. She is not having any income or avocation of

her own. With regard to her means to pay substantial sum

of Rs.6,50,000/-, during her cross-examination

complainant has deposed that her husband had land and

getting income from them. About 10 years back, he had

sold his site and the sale consideration was with her and

utilising the same she has lent Rs.6,50,000/- to accused.

She has also stated that neither herself nor her husband

were Income Tax Assessees. Admittedly, the complainant

has not produced any documents to show that her

husband was owning lands and getting income and also

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that about 10 years back, he had sold a site and she was

in possession of the said amount. The complainant has

also not produced the passbook or account extract either

of herself or her husband to show that they were having

sufficient income.

25. The complainant has admitted that her husband

had purchased a swift car by taking loan from the bank

and during his lifetime housing loan was also availed and

the installments are being paid by her. Despite her lengthy

cross-examination challenging her capacity to lend

Rs.6,50,000/- to the accused, the complainant has not

chosen to produce any documents to prove her financial

capacity. Thus, the complainant has failed to prove that at

the relevant point of time she was in possession of

Rs.6,50,000/- and lent the same to the accused.

26. When the complainant has failed to prove her

financial capacity, as held in APS Forex, the burden has

not shifted on the accused to rebut the presumption under

Section 139 of N.I Act. The trial Court has accepted the

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case of the complainant only on the ground that the

accused has failed to prove that the husband of

complainant was working in his factory and he was being

paid certain remuneration. Admittedly, the husband of

complainant was not a permanent employee of accused

and therefore, no records were maintained. May be for the

service rendered by him, certain sum were being paid.

27. Anyhow, even in the absence of proof that he

was paid certain sum for the services rendered by him, the

fact remains that the complainant has failed to prove her

financial capacity to lend exorbitant sum of Rs.6,50,000/.

In fact, the admission elicited in the cross-examination of

complainant establish the fact that complainant and his

husband have borrowed loan from the bank, not only for

construction/purchase of the house, but also for

purchasing car and the said installments were being paid.

When complainant has failed to prove her financial

capacity and the burden has not shifted on the accused to

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rebut the presumption and Section 139 of N.I Act, the trial

Court has erred in convicting the accused.

28. On the other hand on re-appreciation of the oral

and documentary evidence placed on record, the Sessions

Court has rightly interfered with the order passed by the

trial Court and acquitted the accused. After going through

the elaborate evidence led by both the parties, this Court

is of the considered opinion that it is not a fit case to

interfere with the impugned judgment and order passed

by the Sessions Court. In the result, 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

25.11.2014 in CrlA.No.25011/2013 on the

file of FTC-III, Mayohall, Bengaluru,

reversing the judgment and order of

conviction dated 17.12.2012 imposed by