Karnataka High Court

Sri Mallikarjuna H vs Sri K C Ravindranath on 6 August, 2024

                           1             CRL.A NO.995 OF 2015




    IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 06TH DAY OF AUGUST, 2024

                       BEFORE

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

         CRIMINAL APPEAL NO.995 OF 2015

BETWEEN:

SRI MALLIKARJUNA H
S/O SIDDAPPA,
AGED ABOUT 38 YEARS,
R/AT NO.31, RAMAKRISHNAPPA LAYOUT,
II CROSS, GEDDALAHALLI,
BENGALURU - 560 094
                                          ......APPELLANT
(BY SMT. BALAKRISHNA M R, ADVOCATE)

AND:

SRI K C RAVINDRANATH
S/O CHIKKAMUNIYAPPA,
AGED ABOUT 51 YEARS,
R/AT NO.637, M.C.LAYOUT,
13TH CROSS, 5TH MAIN,
VIJAYANAGAR,
BENGALURU - 560 040.
                                         ....RESPONDENT
(BY SRI. PRASANNA KUMAR R S, ADVOCATE)

     THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO ALLOW THE APPEAL, SET
ASIDE THE JUDGMENT AND ORDER DATED 08.08.2014
PASSED BY THE COURT OF THE CITY FAST TRACK
(SESSIONS) JUDGE, BENGALURU CITY, FTC-II IN CRIMINAL
APPEAL NO.550/2014 AND RESTORE THE JUDGMENT AND
ORDER DATED 24.04.2014 PASSED BY THE COURT OF THE
XIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BENGALURU IN C.C.NO.29859/2005 TO MEET THE ENDS OF
JUSTICE.
                               2              CRL.A NO.995 OF 2015




     THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
05.04.2024, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:

                      JUDGMENT

This appeal is filed by the complainant challenging

the impugned judgment and order passed by the

Sessions Court, dismissing the complaint filed by him,

thereby reversing the conviction and sentence imposed

on the accused, by the trial Court for the offence

punishable under Section 138 of Negotiable Instruments

Act, 1881 (for short 'N.I Act').

2. For the sake of convenience, parties are

referred to by their ranks before the trial Court.

3. It is the case of the complainant that he and

accused are known to each other since five years. In this

background during the first week of August 2005,

accused pleaded financial urgency and requested for

hand loan of Rs.5 lakhs. Complainant was having ready

cash of Rs.5 lakhs borrowed from his parents, friends,

and relatives for purchasing a site in Bengaluru. He paid

the same to the accused by way of hand loan. Towards

repayment, accused issued a post dated 06.10.2005

cheque drawn on State bank of Mysuru, with the

assurance that he would arrange for funds. Accordingly

on 06.10.2005 complainant presented the cheque for

realisation. However, it was returned with endorsement

dated 08.10.2005 'Not arranged for'. Complainant got

issued legal notice dated 22.10.2005 through RPAD and

certificate of posting. Despite due service of notice, the

accused has not repaid the amount due under the

cheque. He has also not sent any reply. Without any

alternative complaint is filed.

4. After the service of notice accused has

appeared through counsel and contested the case by

pleading not guilty.

5. At the trial complainant has given evidence as

PW-1 and relied upon Exs.P1 to 9.

6. During the course of statement under Section

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

evidence led by the complainant.

7. Accused has led the defence evidence by

examining himself as DW-1. He has relied upon Exs.D1

to 35.

8. The trial Court found accused guilty of the

offence and convicted and sentenced him to pay fine of

Rs.5,05,000/- with the default sentence and directed a

sum of Rs.5 lakhs be paid by way of compensation to the

complainant.

9. Accused challenged the same before the

Sessions Court, which came to be allowed and accused

was acquitted.

10. Aggrieved by the same complainant is before

this Court, contending that Sessions Court has erred in

setting aside a well reasoned judgment and order of the

trial Court. It has erred in making use of the photographs

produced and marked on behalf of the complainant and

holding that accused and Nandakumar were known to

each other and in all probabilities complainant was an

employee of Nandakumar and in connection with site

purchase accused had given the cheques in question to

Nandakumar and misusing one such cheque the

complaint is filed. The approach of the Sessions Court

that complainant was required to prove the allegations

beyond reasonable doubt as in other criminal cases is

erroneous. It has failed to raise the presumption under

Section 139 of N.I Act. The Sessions Court has also erred

in holding that the complainant has failed to prove source

of payment of Rs.5 lakhs to the accused. Viewed from

any angle, the impugned judgment and order is not

sustainable and prays to set aside the same and restore

the judgment and order of the trial Court.

11. In support of his arguments, learned counsel

for complainant has relied upon the following decisions:

(i) P.Rasiya Vs. Abdul Nazer and Anr. (P.Rasiya)1

(ii) APS Forex Vs. Shakti International Fashion Linkers Pvt. Ltd (APS Forex)2

2022 SCC online SC 1131

(2020) 12 SCC 724

12. On the other hand learned counsel appearing

for the accused supported the impugned judgment and

order. He would submit that despite the statutory

presumption available under Section 139 of the N.I Act,

when the accused has specifically disputed the financial

capacity of the complainant and also the alleged hand

loan transaction, it was incumbent upon the complainant

to prove that he was in possession of cash of Rs.5 lakhs.

When complainant has failed to prove the same, the

burden has not shifted on the accused. Considering the

entire oral and documentary evidence placed on record,

the Sessions Court has rightly held that the allegations

against accused are not proved and reversed the order of

the trial Court and prays to dismiss the appeal also.

13. In support of his arguments, learned counsel

for accused has relied upon the following decisions:

(i) Vijay Vs. Laxman and Another (Vijay)3

(ii) K. Subramani Vs. K. Damodara Naidu (K. Subramani)4

(2013) 3SCC 86

(2015) 1 SCC 99

(iii) ANSS Rajashekar Vs. Augustus Jeba Ananth (ANSS Rajashekar)5

14. Heard elaborate arguments of both sides and

perused the record.

15. Thus it is the definite case of the complainant

that he know the accused since five years. He responded

to his request for hand loan of Rs.5 lakhs in the first

week of August and on the same day, accused issued a

post dated 06.10.2005 cheque for Rs.5 lakhs with an

assurance of prompt repayment on presentation.

However, when presented the cheque was dishonoured

on the ground that the accused has not arranged for the

same.

16. The defence of accused is one of total denial

in as much as he has alleged that the cheque in question

along with three other cheques were given to his cousin

brother Nandakumar, who is a real estate agent in

connection with purchase of a site from one

Chandrasekhar. The said the deal did not go through and

(2020) 15 SCC 348

Nandakumar failed to return the cheques, saying that

they have been misplaced. It is also alleged by the

accused that complainant is working as office boy with

said Nandakumar and utilising one of the cheque,

Nandakumar has got filed this complaint through the

complainant. Though the accused has not sent reply to

the legal notice disputing the financial capacity of the

complainant, at the trial he has done so and in the light

of the specific defence taken by the accused, it is

necessary to examine whether the allegations against

accused are proved.

17. Before appreciating the respective contentions

of both parties, it is necessary to refer to the decisions

relied upon by them.

18. In P.Rasiya referred to supra, the Hon'ble

Supreme Court held that when the complainant has

discharged the initial burden that the cheque was issued

by accused and the signature and issuance of the cheque

is not disputed by him, the High Court erred by reversing

the conviction imposed by the trial Court and confirming

the order of the Sessions Court, by not raising

presumption under Section 139 of N.I Act and that the

accused has failed to rebut the same.

19. In APS Forex referred to supra, the Hon'ble

Supreme Court held that when the accused rises issue of

financial capacity of the complainant in support of his

probable defence, despite presumption in favour of

complainant regarding legally enforceable debt, under

Section 139 of N.I. Act burden 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. However, in

that case on facts the Supreme Court held that the

accused failed to rebut the presumption and his

contention that cheque was issued by way of security

and it was misused by the complainant cannot be

accepted.

20. In Vijay referred to supra, the Hon'ble

Supreme Court held that the presumption under Section

139 of N.I Act is a rebuttable presumption and when the

accused rebut the same by preponderance of

probabilities, it is for the complainant to prove his case

beyond reasonable doubt, including the financial

capacity.

21. In K Subramani referred to supra, the

Hon'ble Supreme Court held that the trial Court was

justified in acquitting the accused as the complainant

failed to prove his financial capacity.

22. In Rajashekar referred to supra, the Hon'ble

Supreme Court held that the presumption under Section

139 of N.I Act is rebuttable presumption and the

standard of proof to rebut the presumption is

preponderance of probabilities. On a probable defence,

which creates doubts about the existence of legally

enforceable debt or liability, prosecution can fail. In

determining whether the presumption has been rebutted,

the test of proportionality must guide the determination.

23. Now coming to the facts of the present case.

The accused admit that the cheque in question is drawn

on his account maintained with his banker and it bears

his signature. Therefore, presumption under Section 139

of N.I Act is attracted and it is operating in favour of the

complainant. Consequently, it would place the initial

burden on the accused to prove that it was not issued for

repayment of any legally recoverable debt or liability, but

on the other hand to establish the circumstances under

which the cheque in question has reached the hands of

complainant, after which the burden would shift on the

complainant to prove his case. Of course it is sufficient

for the accused to probabalise his defence, whereas

complainant is required to prove his case beyond

reasonable doubt.

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

Abraham & Anr (John K.Abraham)6, 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.

(2014) 2 SCC 236

(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.

25. In Tedhi Singh Vs Narayan Das Mahant

(Tedhi Singh)7, the Hon'ble Supreme Court held that

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, if during the

course of trial accused has taken up such defence, then it

is necessary for the complainant to prove his financial

capacity, when he allegedly advanced the amount and

towards repayment of it, the accused has issued the

cheque.

26. In the present case, the notice is duly served

on the accused. However, he has not sent any reply to

the same. Consequently, he has lost an opportunity to

2022 SCC OnLine SC 302

put forth his defence at the earliest available opportunity.

However, as held by the Hon'ble Supreme Court in Tedhi

Singh, despite the fact that the accused has not sent

reply, thereby challenging the financial capacity of the

complainant, at trial if he raises such presumption, it is

necessary for the complainant to prove his financial

capacity. Similarly, in APS forex, the Hon'ble Supreme

Court held that when the accused rises the issue of

financial capacity of the complainant in support of his

probable defence, despite presumption in favour of the

complainant regarding legally enforceable debt under

Section 139, the 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.

27. In the light of the ratio in the above decisions,

it is necessary for the complainant to prove his financial

capacity. It is also necessary to examine whether the

accused has proved his defence that the cheque in

question was handed over to Nandakumar and he in turn

has got filed the present complaint through complainant.

28. At the outset it is relevant to note that the

complainant has not led any evidence to prove his

financial capacity. In fact in the complaint itself, he has

pleaded that he has collected Rs.5 lakhs from his

parents, relatives and friends for the purpose of

purchasing a site and when accused requested for a hand

loan to meet his emergent need, he handed over the

same to the accused. By pleading that the said sum of

Rs.5 lakhs was collected by him from his parents and

others, the complainant has indirectly conceded the fact

that he had no financial capacity and it was not the sum

earned by him.

29. In the complaint, the complainant has not

disclosed his avocation. During his cross-examination, he

has stated that he is doing vegetable vending in a

pushcart and every day he purchases vegetables from

Yeshwanthpur market and sell in the city in pushcart and

earn an average of Rs.200/- per day. During his cross-

examination, complainant has admitted that in the

morning, he used to supply newspaper and earning

Rs.500/- p.m. Though the complainant has stated that

his family is having landed properties, he has not

produced any documents to evidence the said fact and

also establish that he or his family members were having

any income from those lands. Accused has also not

proved that the sum of Rs.5 lakhs which he had allegedly

paid to the accused were given to him by his parents and

other relatives. He could have examined anyone or few

of them to show that at the relevant point of time he was

in possession of Rs.5 lakhs to probable his case that he

handed over the said sum of Rs.5 lakhs to the accused in

the first week of August 2005.

30. The accused has taken a specific defence that

his cousin by name Nandakumar is a real estate agent

and through him, he wanted to purchase a site from one

Chandrasekhar and in that connection he had handed

over four cheques for Rs.5 lakhs, 5 lakhs, 9 lakhs and

Rs.90,000/- by filling up the amount and signature.

However, the seller wanted the entire amount in one

lumpsum and therefore the deal could not go through.

Nandakumar did not return the cheques under the

pretext that he has misplaced them and utilising one

cheque for Rs.5 lakhs, he has got filed the complaint

through the complainant who is working as office boy in

his real estate office.

31. In order to establish his defence, the accused

has led evidence to show that complainant is working as

a office boy with the said Nandakumar, Ex.D6 is the 'B'

04-W-1427 standing in the name of Nandakumar.

Exs.D3 and 5 are the driving license extract of

complainant to drive motorcycle with gear. Accused has

produced photographs at Ex.D1, 2, 11 to 34. These

photographs depict the complainant and Nandakumar

moving on the motorcycle belonging to Nandakumar and

the complainant is also locking and opening the door of

the office of Nandakumar. In some of the photographs,

complainant is alone riding the motorcycle belonging to

Nandakumar. Despite possessing a driving license to

drive motorcycle, the complainant has gone to the extent

of saying that he is not having any driving license. There

is no justification for the complainant to deny the said

fact.

32. Ex.D7 to 9 are duplicate telephone bills of

Nandakumar. Ex.D10 and 11 are the statements of

telephone bills of the Nandakumar and accused to show

that at the relevant point of time, they were conversing

with one another. Ex.D5 is the CD pertaining to the

photographs in question. Through these documents, the

accused has established that complainant is not only

knowing Nandakumar, but also working with him. If at all

the complainant is knowing Nandakumar and working

with him, there is no necessity for him to conceal the

said fact.

33. The trial Court has not accepted the defence

of the accused that Nandakumar is doing real estate

business and in connection with purchase of site from

one Chandrasekhar through Nandakumar, the subject

cheque as well as three more cheques were issued by the

accused to Nandakumar, solely on the ground that

accused has not examined either Chandrashekar or

Nandakumar. The accused has clearly deposed that he

came to know Chandrashekar in connection with the

proposed sale transaction and subsequently he is not in

touch with him after the talks for purchase of site failed.

When the accused is making allegations against

Nandakumar that he is instrumental in getting a false

complaint filed through the complainant, it cannot be

expected that accused would examine him and during his

evidence, Nandakumar would admit the said fact.

Therefore, it would not appeal to reason that the accused

ought to have examined Nandakumar.

34. On the other hand indirectly, the accused has

established that Nandakumar is doing real estate

business and complainant was working as a office boy

under him and thereby probabalising the defence of the

accused that, complainant has come in possession of the

cheque in question through the said Nandakumar. Had

the complainant was able to prove that he had the

financial capacity to lend Rs.5 lakhs to the accused,

things would have been different.

35. Except stating that he came to know the

accused about five years back, the complainant has

failed to establish that he and accused were known to

each other and their relationship was such that it would

be very natural for the complainant to trust him and

handover cash of Rs.5 lakhs. Moreover, the complainant

also failed to establish what was the legal necessity of

the accused to borrow such a huge sum of Rs.5 lakhs

and also whether he was in a position to repay the same.

Without examining these aspects, the trial Court only on

the basis of presumption convicted the accused.

However, the Sessions Court after proper analysis of the

entire evidence on record and in the light of ratio in the

various decisions rendered by the Hon'ble Supreme Court

has come to a correct conclusion that the allegations

against accused are not proved and acquitted him.

36. On re-appreciation of the entire material

placed on record, this Court finds no justifiable grounds

to disbelieve the findings of 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

08.08.2014 in Crl.A.No.550/2014 on the

file of City Fast Track Court (Sessions)

Judge, Bengaluru is confirmed.

(iii) The Registry is directed to send back the

trial Court and Sessions Court records

along with copy of this judgment

forthwith.

Sd/-

JUDGE