Karnataka High Court

Smt R Vijaya Kumari vs Smt Moksha Bhagyam on 15 February, 2024

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                                     CRL.A.No.665/2014


  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE 15TH DAY OF FEBRUARY, 2024

                       BEFORE
         THE HON'BLE MR JUSTICE ANIL B KATTI
         CRIMINAL APPEAL No. 665 OF 2014(A)


BETWEEN:


SMT R VIJAYA KUMARI
W/O RAMESH J
AGED ABOUT 47 YEARS
R/A #72, MARUTHI NAGARA
KOODLIYAPPA EXTENSION
KOGILE CROSS
YELAHANKA OLD TOWN
BANGALOORU-560 060.

                                           ...APPELLANT

(By Sri.M C VEERABHADRAIAH, ADVOCATE)

AND

SMT MOKSHA BHAGYAM
PROPRIETRIX OF THE SWARNA ENTERPRISES
W/O LATE OBAIAH
R/A #47, 1ST CROSS
CHOWDAIAH BLOCK, HMT LAYOUT
R T NAGAR POST
BANGALOORU -560 032.

                                         ...RESPONDENT

(By Smt NIVEDITHA PRAKASH, ADVOCATE FOR SRI. G. JEEVA
PRAKASH, ADVOCATE)

     THIS APPEAL IS FILED UNDER SECTION 378(4) CR.P.C.,
PRAYING TO SET ASIDE THE ORDER DATED:12.06.2014
PASSED BY THE XV ADDL.C.M.M., BANGALORE CITY IN
                                  -2-
                                                  CRL.A.No.665/2014


C.C.NO.28333/2011-ACQUITTING THE RESPONDENT/ACCUSED
FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
      [




     THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
09.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

                            JUDGMENT

Appellant/complainant feeling aggrieved by judgment

of Trial Court on the file of XV Additional Chief

Metropolitan Magistrate, Bengaluru City, in

C.C.No.28333/2011, dated 12.06.2014, 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, so also the impugned

judgment under appeal, 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 the

accused is Proprietrix of M/s. Swarna Enterprises and she

is manufacturing spare parts of watch belt. Accused is a

friend of complainant and she approached the complainant

for financial assistance of Rs.4 Lakhs. Complainant gave

money of Rs.4 Lakhs in the month of October 2009.

Accused in order to discharge legally enforceable debt

issued a cheque bearing No.081263 - Ex.P1 dated

08.07.2011 drawn on Canara Bank, Vasanthanagara

Branch, Bengaluru, for a sum of Rs.4 Lakhs. Complainant

presented the said cheque through his banker - State

Bank of Mysore, Yelahanka Branch, Bengaluru, the same

was dishonoured vide Bank endorsement - Ex.P2 on

09.07.2011 as "Account Closed". Complainant issued

demand notice dated 25.07.2011 and the postal receipt is

produced at Ex.P4. The demand notice issued by the

complainant is duly served to the accused vide

acknowledgment card - Ex.P5. Accused in spite of due

service of demand notice neither replied to the same nor

paid the amount covered under cheque - Ex.P1. Therefore,

Complainant has filed complaint on 17.08.2011. If the

above referred documents are perused and appreciated

with the oral testimony of PW.1, then it would go to show

that complainant has complied all the necessary legal

requirements in terms of Section 138(a) to (c) of

Negotiable Instruments, Act, 1881 (hereinafter for brevity

referred to as "N.I.Act"). Complainant within a period of

one month from the date of accrual of cause of action, has

filed the complaint in terms of Section 142(1)(b) of

N.I.Act. Therefore, statutory presumption in terms of

Sections 118 and 139 of the NI Act will have to be drawn

in favour of the complainant.

6. In this context of the matter, it is useful to refer

the judgment of Hon'ble Apex Court in APS Forex

Services Pvt. Ltd. Vs. Shakti International Fashion

Linkers and others reported in AIR 2020 SC 945,

wherein it has been observed and held that once the

issuance of cheque with signature on cheque is admitted,

there is always a presumption in favour of complainant

that there exist legally enforceable debt or liability. Plea

by accused that cheque was given by way of security and

same has been misused by complainant is not tenable.

7. It is also profitable to refer another judgment

of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and

another reported in 2022 SCC OnLine SC 1131,

wherein it has been observed and held that:-

" Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Section 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."

In view of the principles enunciated in the aforementioned

two judgments of Hon'ble Apex Court, it is evident that

when once issuance of cheque with signature of accused

on the account maintained by him is admitted or proved

then statutory presumption in terms of Sections 118 and

139 of N.I. Act will have to be drawn. Now, it is up to the

accused to place rebuttal evidence to displace the

statutory presumption available in favour of Complainant

in terms of Sections 118 and 139 of N.I. Act. The burden

of placing rebuttal evidence to displace the statutory

presumption is on the accused.

8. The burden is now on the accused to place

rebuttal evidence to displace the statutory presumption

available in favour of complainant. Accused apart from

relying on the evidence produced by the complainant also

chose to rely on her own evidence as DW.1 and one

witness on her behalf as DW.2, so also got marked the

documents - Exs.D1 to D4. Whether the said material

evidence placed on record by the accused would be

sufficient rebuttal evidence to displace the statutory

presumption available in favour of complainant or not has

to be decided.

9. The Trial Court has acquitted the accused on

the following grounds:-

i) Complainant has not pleaded specific date of lending money.

ii) No documents were produced evidencing the loan transaction with accused.

iii) The writings in the cheque - Ex.P1 and signature of accused are in different ink.

iv) Complainant had no Bank balance of Rs.4 Lakhs.

v) Complainant has lent Rs.2 Lakhs to one K.H.Ramu and Rs.1,50,000/- to D.Jayaram within a period of two years, which is highly improbable.

vi) Complainant is in the habit of taking blank cheque and she used to misuse the same.

10. It is the specific defense of accused that she

has availed loan of Rs.50,000/- from complainant in the

year 2006 and at that time she has issued blank signed

cheque as security for the said purpose. Accused has

repaid the entire loan amount in the year 2007. However,

complainant did not return the blank signed cheque given

by accused as security and misused the same to file this

false case, which she came to know on service of demand

notice on her in the year 2009. The burden of proving this

defense is on accused.

11. Accused - DW.1 has deposed to the effect that

in the year 2006, she has taken loan of Rs.50,000/- from

the complainant and she has issued blank signed cheque

as a security for the said loan. She has repaid the entire

loan amount in the year 2007. However, complainant did

not return the blank signed cheque. In the year 2009, she

received notice from the complainant that she has availed

loan of Rs.4 Lakhs. She immediately approached the co-

sister of complainant - Amaravathi, who has arranged the

loan of Rs.50,000/- and witness to giving blank signed

cheque to the complainant. The said Amaravathi asked the

accused to give reply to demand notice and accordingly

she gave reply to the demand notice of complainant which

she has produced at Ex.D1. She produced the documents -

Exs.D2 to D4 viz., the proceedings in C.C.No.15497/2010,

C.C.No.9621/2012 and C.C.No.28333/2011.

12. Accused has also examined the co-sister of

complainant Amaravathi as DW.2 and she has deposed to

the effect that in the year 2006, accused has asked loan of

Rs.50,000/- from her and she has arranged Rs.50,000/-

loan to the accused from the complainant, which accused

has repaid to the complainant during the year 2007. When

accused demanded to return the cheque given by her, she

stated that the same is in the house and she will give the

same afterwards and postponed the return of cheque on

one or the other pretext and she filed this false case by

using the said cheque.

13. It has been elicited in the cross-examination of

DW.2-Amaravathi that complainant has filed a complaint

against her husband D. Jayaram in C.C.No.9621/2012 -

Ex.D3 and on account of filing of the said case, she is

having enmity against the complainant and deposing

falsely to help the accused, which she denies. Accused-

DW.1 during the course of her evidence has denied that

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she has issued the cheque - Ex.P1 for lawful discharge of

debt and also the financial capacity of complainant to pay

huge loan of Rs.4 Lakhs to the accused.

14. Learned counsel for the complainant has argued

that accused has not replied to the demand notice by

making basic foundation regarding the defense of accused

in challenging the financial capacity of complainant to

mobilize the fund of Rs.4 Lakhs for giving loan to the

accused. However, accused during the course of her

evidence has produced the reply notice issued by her on

29.07.2011 at Ex.D1. The said notice was addressed to

counsel for complainant on the correct address given in

the demand notice at Ex.P3. The present complaint is filed

by complainant on 17.08.2011. The reply notice dated

29.07.2011 to the demand notice was issued well within a

period of 15 days from the date of issuance of demand

notice dated 25.07.2011. The very same Advocate is

representing the complainant in this case and he has

never denied the correctness of the address shown in the

demand notice - Ex.P3 and the one address by accused in

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the reply - Ex.D1. Therefore, it will have to be held that

reply dated 29.07.2011 - Ex.D1 to the demand notice

issued by the complainant was well within the knowledge

of complainant's counsel. However, there is no any

reference of the said reply in the complaint filed by

complainant. Therefore, from the reply of accused -

Ex.D1 to the demand notice issued by the complainant, it

is evident that the accused on the first available

opportunity has denied the financial capacity of

complainant. However, in spite of such defense put forth

by accused, complainant has not produced any documents

evidencing her source of income.

15. Complainant during the course of her evidence

in the affidavit filed in support of examination-in-chief has

described herself that her occupation is Cooking Contract.

However, complainant has not produced any documents to

show the income that she get from the cooking contract

and she is doing cooking contract business. Out of the

said profession, she has saved the money of Rs.4 Lakhs,

so as to advance loan to the accused. It has been elicited

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in the cross-examination of PW.1 regarding the source of

income of complainant. PW.1 claims that out of the

retirement benefits of her husband, who retired from the

Military Service in the year 2002 given the amount of Rs.4

Lakhs to the accused. She admits that there was no any

balance in the account of herself and her husband account

to the tune of Rs.4 Lakhs during the month of October

2009. Complainant has not produced any documents to

show the retirement benefits received by her husband.

According to the complainant her husband retired from the

Military Service in the year 2002 and the loan transaction

involved in this case is in the year 2009. There is a long

gap of more than seven years from the date of retirement

of husband of complainant from Military Service till the

date of loan transaction of accused. Complainant has not

produced any documents evidencing the fact that in the

said long gap of time, still an amount of Rs.4 Lakhs was

available with the husband of complainant so that she can

borrow money to give as loan to the accused. PW.1 has

admitted in her cross-examination that in the year 2009,

she was residing in a rented house and paying rent of

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Rs.3,500/- per month. Therefore, from the said material

evidence elicited in the cross-examination of PW.1, it is

evident that complainant has not produced any evidence

to prove the source of income either from her cooking

profession or from the savings of the retirement benefits

received by her husband. Complainant out of the evidence

on record has failed to demonstrate her source of income

or she was capable of mobilizing the fund to arrange huge

loan of Rs.4 Lakhs to the accused.

16. It is also the defense of accused that she has

availed loan of Rs.50,000/- from complainant during the

year 2006 and as a security she issued a blank signed

cheque to the complainant. She repaid the entire loan

amount in the year 2007. However, Complainant did not

return the blank signed cheque of accused and misuse the

same to file this complaint. Complainant is also in the

habit of collecting blank signed cheque and to file the

cases against others for the offence punishable under

Section 138 of the NI Act. It has been elicited in the

cross-examination of PW.1 that one D.Jayaram is the

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cousin brother of Complainant and his wife name is

Amaravathi. Complainant also admits that she filed cases

in C.C.No.15508/2010 and C.C.No.15497/2010 and

she also filed a case against D.Jayaram. The document at

Ex.D2 - Certified Copy of the order sheet in

C.C.No.15497/2010 would go to show that J. Ramesh,

who is the husband of complainant had filed a cheque

bounce case against K.H. Ramu. Complainant has filed a

cheque bounce case in C.C.No.9621/2012 - Ex.D3 against

D.Jayaram. The husband of complainant also filed another

case against K.H.Ramu in C.C.No.28333/2011 - Ex.D4.

Accused has examined Amaravathi w/o. D. Jayaram, who

has arranged the loan of Rs.50,000/- to the accused from

complainant. The evidence of DW.2 would go to show that

she has arranged loan of Rs.50,000/- to the accused from

complainant and accused has issued cheque as a security

for the said loan and accused has repaid the loan amount

in the year 2007. However, complainant did not return

the blank signed cheque to the accused. The only ground

on which the evidence of DW.2 - Amaravathi has been

challenged is to the effect that the complainant had filed

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complaint against her husband D. Jayaram, Ex.D3,

therefore, she is deposing falsely. Other than this, there is

no evidence that has been brought on record in the cross-

examination of DW.2 to discredit her evidence. In view of

the admitted relationship of D. Jayaram being cousin

brother of complainant and Smt.Amaravathi is the wife of

D.Jayaram, so also, the aforementioned proceedings

initiated by complainant and her husband would go to

show that cheque bounce cases have been filed against

accused, K.H.Ramu and D. Jayaram. Therefore, looking to

the conduct of complainant and her husband in filing the

cheque bounce cases and advancing money, the defense

of accused appears to be more probable in view of the fact

that the complainant has failed to demonstrate her source

of income to mobilize huge amount of Rs.4 Lakhs to give

the same as loan to accused.

17. It is settled position of law that accused is not

expected to prove his defect beyond reasonable doubt. If

the accused could able to demonstrate by evidence on

record which would be sufficient to cast cloud of doubt on

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the basis of preponderance of probability then it can be

accepted that statutory presumption stood rebutted by

rebuttal evidence. In this context, it is profitable to refer

the judgment of the Hon'ble Supreme Court in Rajaram

S/o Sriramulu Naidu (Since Deceased) through L.Rs.

Vs. Maruthachalam (Since deceased) through LRs.

reported in 2023 LiveLaw (SC) 46 wherein it has been

observed and held that :

"The standard of proof for rebutting the presumption is that of preponderance of probabilities- once the execution of cheque is admitted, Section 139 of the N.I Act mandates a presumption that the cheque was for the discharge of any debt or other liability - The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities- To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence- inference of preponderance of probabilities can be drawn not only from the materials brought on record by the

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parties but also by reference to the circumstances upon which they rely."

In view of the principles enunciated in the aforementioned

judgment of the Hon'ble Supreme Court, if the evidence of

DWs.1 and 2 coupled with the documents of Exs.D1 to D4

is appreciated, then, it is evident that statutory

presumption in favour of complainant stood rebutted by

virtue of the above referred evidence placed on record.

18. The findings recorded by the Trial Court in

holding that the complainant has failed to prove the

financial capacity to lend the huge loan amount and there

is a serious cloud of doubt in view of the evidence on

record that the cheque in question - Ex.P1 was issued for

lawful discharge of debt is based on the material evidence

placed on record. The Trial Court has rightly appreciated

the oral and documentary evidence placed on record

before it and was justified in holding that the accused has

probabalised her defense to displace the statutory

presumption available in favour of complainant.

Therefore, the said findings recorded by the Trial Court