Smt. D. Roopa vs Sri. D.S. Siddaraju
2024 Latest Caselaw 3189 Kant

Karnataka High Court

Smt. D. Roopa vs Sri. D.S. Siddaraju on 2 February, 2024

                             -1-
                                     CRL.A.No. 1132 of 2014


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

   DATED THIS THE 2ND DAY OF FEBRUARY, 2024

                          BEFORE
        THE HON'BLE MR JUSTICE ANIL B KATTI
         CRIMINAL APPEAL No.1132 OF 2014 (A)
BETWEEN:

   SMT.D.ROOPA
   W/O.B.NEELAKANTA SWAMY
   AGED ABOUT 51 YEARS
   RESIDING AT NO.171/A
   BAPUJI NAGAR, 5TH MAIN
   MYSORE ROAD
   BENGALURU-560 026
                                               ...APPELLANT
(BY SRI.MURALIDHAR H.M., ADVOCATE)

AND:

   SRI.D.S.SIDDARAJU
   AGED ABOUT 54 YEARS
   C/O.SRI G.RAVI, NO.1646
   KRISHNARPITHA NILAYA
   PATEL LAYOUT, BEGUR ROAD
   CANARA BANK OPPOSITE LAYOUT
   BENGALURU-560 068
                                          ...RESPONDENT
(BY SRI. SATHYANARAYANA S.CHALKE, ADVOCATE)

       THIS APPEAL FILED U/S.378 (4) CR.P.C, PRAYING TO SET
ASIDE THE ORDER DATED 06.12.2014 PASSED BY THE XXII-
ACMM, BANGALORE IN C.C.NO.5248/2012- CONVICTING THE
ACCUSED FOR THE OFFENCE P/U/S 138 N.I. ACT AND IMPOSE ON
HIM THE MAXIMUM SENTENCE AS PROVIDED IN LAW.

       THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
16.01.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
                                  -2-
                                           CRL.A.No. 1132 of 2014




                          JUDGMENT

Appellant/complainant feeling aggrieved by

judgment of Trial Court on the file of XXII Additional Chief

Metropolitan Magistrate, Bengaluru City, in

C.C.No.5248/2012 dated 06.12.2014 preferred this

appeal.

2. Parties to the appeal are referred with their

ranks as assigned in the Trial Court for the sake of

convenience.

3. Heard the arguments of both sides.

4. After hearing arguments of both sides and on

perusal of Trial Court records, the following points arise for

consideration:

1) Whether the impugned judgment under appeal passed by Trial Court in acquitting the accused for the offence punishable under Section 138 of N.I.Act is perverse, capricious and legally not sustainable?

2) Whether interference of this Court is required?

5. On careful perusal of oral and documentary

evidence placed on record, it would go to show that

accused has borrowed Rs.6,50,000/- from complainant

promising to return the same by April, 2011. However,

accused did not keep up his promise in making repayment

of the loan and requested some time pay the money.

Accused at the time of borrowing loan issued cheque

bearing No.874331 dated 13.04.2011 drawn on Bank of

Baroda, BTM Layout Branch, Bengaluru, for Rs.6.50,000/-

on the account maintained by him Ex.P.1. Complainant

presented the said cheque through her banker Bengaluru

City Co-op. Bank Ltd. Vijayanagar Branch, Bengaluru

through challan Ex.P.2 and 3. The said cheque issued by

the accused was dishonoured as "opening balance

insufficient" Ex.P.4. On informing the said fact, accused

requested for some time. Complainant again presented

the said cheque on 18.8.2011 Exs.P.5 and P.6 through her

Banker, Bengaluru City Co-op. Bank Ltd. Vijayanagar

Branch, Bengaluru and the same was dishonoured as

"opening balance insufficient" and "account is

inoperative/dormant" vide Bank endorsement Ex.P.7.

Complainant issued demand notice dated 29.8.2011

Ex.P.8 through RPAD and the same is duly served to the

accused vide acknowledgment card Ex.P.9 and complaint

is filed on 26.09.2011 Ex.P.10. Accused has not replied to

the demand notice nor paid the amount covered under the

cheque. Therefore, complainant has filed the complaint

Ex.P.10.

6. Accused has denied that cheque in question Ex.P.1 was

issued for lawful discharge of debt and also challenged the

financial capacity of complainant to pay the huge loan of

Rs.6,50,000/- to the accused. The learned counsel for the

complainant has argued that accused has not replied to

the demand notice Ex.P.8 though it is duly served vide

acknowledgement Ex.P.9 and thereby failed to make

proper foundation to set up his defence as claimed in the

cross-examination of PW.1. In support of such contention,

placed reliance on the judgment of the Hon'ble Apex Court

in Tedhi Singh Vs. Narayan Dass Mahant reported in

(2022) 6 SCC 435 wherein it has been observed and held

in paragraph 9 of the judgment as under :

"9. xxxx The proceedings under Section 138 of the N.I. Act is not a civil suit. At the time, when the complaint gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines."

In view of the principles enunciated in this judgment, the

complainant was not expected to initially lead evidence

that he had the financial capacity. The defence of accused

in challenging the financial capacity was not known to the

complainant and as such, the complainant was not

expected to give evidence of his financial capacity when he

led his evidence. However, in the very same paragraph,

the Hon'ble Apex Court has further held as under :

"However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by

producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.

The Hon'ble Apex Court has held that though accused

has not replied to the demand notice, the accused has the

right to challenge the financial capacity during the cross-

examination of PW.1 and the witnesses relied by the

complainant. Therefore, it is open for the accused to

challenge the financial capacity of complainant in giving

loan amount covered under Ex.P.1.

7. It is pleaded in paragraph (4) of the complaint that

accused at the time of borrowing loan has issued cheque

No.874331 dated 13.4.2011 for a sum of Rs.6,50,000/-

drawn on Bank of Baroda, BTM Layout Branch, Bengaluru

on the account maintained by him. It means as on the

date of issuance of cheque dated 13.04.2011 Ex.P.1, there

was no any legally enforceable debt. Accused has issued

post dated cheque for Rs.6,50,000/- dated 13.4.2011

Ex.P.1. It has been elicited in the cross-examination of

PW.1 that complainant is a house wife and not doing any

work. She further deposed to the effect that her husband

was working in Karnataka Power Corporation as a

Personnel Manager and retired two years back. However,

he was not getting any pension and she does not know

what was the salary her husband was getting but she

volunteers that he was getting Rs.30,000/- to Rs.40,000/-

salary. PW.1 has categorically admitted that other than

her husband, nobody was working in the family and the

family was being maintained out of the salary income of

her husband. It has been further elicited in the cross-

examination of PW.1 that her husband got money after his

retirement and she has not produced any document as to

how much retirement benefit was received by her

husband. From the said material evidence brought on

record in the cross-examination of PW.1, it would go to

show that the complainant has no any independent source

of income and has not produced any documents to show

that how she has generated huge money of Rs.6,50,000/-,

so as to give as hand loan to the accused. It is true that

in view of the aforementioned judgment of the Hon'ble

Apex Court in Tedhi Singh Supra, the complainant was not

expected to give evidence regarding her financial capacity.

In the very same judgment, the Hon'ble Apex Court has

also held that the accused has right to demonstrate in the

cross-examination of complainant and challenge the

financial capacity to lend money. When material evidence

has been produced on record through the evidence of

PW.1 create serious doubt regarding the financial capacity

of the complainant to give loan of Rs.6,50,000/- covered

under Ex.P.1, then again onus shifts on the complainant to

produce requisite evidence and demonstrate the same to

substantiate the source of income or how she has

generated the fund of Rs.6,50,000/- to give the same to

the accused. However, the complainant has not chosen to

place rebuttal evidence on the claim of accused that the

complainant has no financial capacity to give loan of

Rs.6,50,000/- to the accused covered under Ex.P.1.

8. Indisputably, the cheque Ex.P.1 was twice presented

for collection. On the first presentation vide bank

challans, Exs.P.2 and P.3 dated 13.4.2011, the cheque

was dishonoured vide Bank endorsement as "opening

balance insufficient" Ex.P.4. The said cheque was

presented for the second time on 18.04.2011 vide bank

challan Exhibits P.5 and P.6 and same came to be

dishonoured vide endorsement Ex.P.7 as "opening balance

insufficient" and "account is inoperative/dormant". The

Bank of Baroda issued two inconsistent endorsements

Exhibits P.4 and P.7 as referred above. It is the duty of

complainant to plead and prove that accused has issued

cheque Ex.P.1 for lawful discharge of debt and the same

came to be dishonoured for want of sufficient funds in the

account of accused. In view of the aforementioned two

inconsistent endorsements Ex.P.4 and P.7, it was

obligatory on the part of the complainant to examine the

Manager of Bank of Baroda to prove as to whether cheque

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in question Ex.P.1 was dishonoured for want of sufficient

fund in the account of accused or the account was

inoperative/dormant. Accused has no any role in giving

endorsement Ex.P.7 as account is inoperative/dormant

and no any fault can be found with the accused in giving

such endorsement.

9. Learned counsel for the accused in support of his

contention that it was the duty of the complainant to prove

that at the instance of accused, the account was not

closed, relied on the judgment of Co-ordinate Bench of this

Court in B.S.Arunkumar Vs. Keshava Murthy M.G., in

Criminal Appeal No.1091 of 2012 reported in

LAWS(KAR)-2023-7-1014 wherein it has been observed

and held in paragraph 13 as under :

"xxxx the burden is on the complaint to prove that the account was frozen, at the instance of accused or that accused was in the knowledge of freezing of his account and issued the cheque with the intention of cheating him."

Reliance is also placed on another Co-ordinate Bench

judgment of this Court in Adinarayana Vs.Sri.P.N.Sridhar

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Bhattar in Criminal Appeal No.951 of 2008 reported in

LAWS(KAR)-2013-12-190 wherein it has been held in

paragraph 4 as under :

"As could be seen from the endorsement issued by bank, account was closed by banker, as accused had failed to operate his bank account. The bank account of accused was not closed at the instance of accused."

Reliance is also placed on another Co-ordinate Bench

decision of this Court in Nagaraja Upadhya Vs.

M.Sanjeevan in Criminal Appeal 1283 of 2001 reported in

LAWS(KAR)-2007-6-42 wherein it ahs been observed and

held that :

"Even according to the complainant, the account of the accused in the Bank had been closed and the account of the accused was closed on 25-06- 1996 at the instance of the Bank and not at the instance of accused, provision of Section 138 of the Negotiable Instrument Act is not attracted in this case."

Therefore, in view of the principles enunciated in the

aforementioned judgments where the account is closed by

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the Bank and not at the instance of accused, the

provisions of Section 138 of the N.I Act is not attracted.

10. Learned counsel for the complainant has argued that

accused has admitted the loan transaction covered under

the cheque Ex.P.1 and executed memorandum of

understanding Ex.P.11 dated 14.07.2012. Indisputably

complainant had already initiated proceeding before the

Trial Court on 26.09.2011. If at all there is any settlement

between the complainant and the accused as claimed

under the MOU dated Ex.P.11 and pursuant to it accused

has made part payment on 16.07.2012 Ex.P.12, then

nothing has prevented the complainant to report the

amount so collected and bring it on record in the manner

known to law that accused under the memorandum of

understanding Ex.P.11 has admitted the liability to pay the

amount Ex.P.11. It is also pertinent to note that accused

is said to have paid the amount of Rs.1,20,000/- and that

was apportioned towards interest and still there was

balance of Rs.6,70,500/- including interest. However, the

parties have agreed to settle for full and final settlement of

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payment of Rs.6,25,000/-. Complainant has not pleaded

in the complaint that accused has borrowed money

agreeing to pay the interest and therefore, whatever the

amount accused has paid is apportioned towards interest

cannot be sustained, since complainant has not pleaded

basic fact that accused availed hand loan of Rs.6,50,000/-

agreeing to pay the interest. However, for the first time it

is stated in Ex.P.11 that amount already paid by the

complainant was apportioned towards interest. Therefore,

subsequent development during the pendency of the

proceeding without bringing the same on record in the

manner known to law, the memorandum of understanding

under Ex.P.11 cannot be accepted as evidence of accused

admitting liability to pay the amount covered under

cheque.

11. It has been elicited in the cross-examination of PW.1

that accused is known to complainant for about 7 to 8

years. Mahadevamma is her sister and Channaveerappa is

her husband and their daughter's name is Parvathi.

Complainant was having some financial transaction with

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her brother-in-law Channaveerappa who is now no more.

It is the defence of accused that complainant is the aunt of

Parvathi and accused has kept signed cheque in the

custody of Parvathi, since he was residing in a rented

house and used to travel frequently. Complainant after

the death of Channaveerappa came to the house of

Parvathi and sought for return of money given to

Channaveerappa. There was dispute over the said issue

and the complainant has taken the cheque and other

documents from the house of Parvathi and she has

misused the cheque to file this false case. However,

accused or Parvathi has not taken any action against

complainant for misusing the cheque taken from the

custody of Parvathi kept in the house. Accused remained

silent even after stealing the cheque from the house of

Parvathi and even without taking any action against the

complainant. If for the said reason even if the defence of

the accused is held to be not acceptable, then also in view

of the fact elicited in the cross-examination, the

complainant has failed to discharge initial burden of

proving that cheque in question is issued for lawful

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discharge of debt. The material evidence elicited in the

cross-examination of PW.1 would be sufficient enough to

establish that complainant has no financial capacity to lend

huge money of Rs.6,50,000/- to the accused. Secondly,

the complainant has failed to examine the Manager of

Bank of Baroda in view of the inconsistent endorsements

Exs.P.4 and P.7 regarding dishonour of cheque. The

account being closed by the Bank as inoperative and not

at the instance of the accused. Therefore, in view of the

principles enunciated in the aforementioned judgment of

this Court, it is evident that the offence under Section 138

of the N.I. Act is not attracted.

12. The Trial Court has rightly appreciated the oral and

documentary evidence placed on record and was justified

in holding that complainant has failed to prove that

accused has committed offence under Section 138 of the

N.I. Act. The findings recorded by the Trial Court in

holding the accused not guilty for the offence under

Section 138 of the N.I. Act are based on the material

evidence placed on record and the same does not call for

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any interference by this Court. Consequently, proceed to

pass the following :

ORDER

Appeal filed by the appellant/complainant is hereby

dismissed as devoid of merits.

Registry to send back the records to Trial Court with

a copy of this order.

Sd/-

JUDGE

rs