Karnataka High Court
Sri. S. Mallesh vs Mr. Govinda Naik on 15 February, 2024
1 CRL.A NO.233 OF 2018
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 15TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.233 OF 2018
BETWEEN:
SRI. S.MALLESH
S/O SANGAPPA,
AGED ABOUT 45 YEARS
R/O 10TH CROSS,
NEAR SUBHASHCHANDRA HIGH
SCHOOL, BHARATH COLONY,
DAVANAGERE - 577 002
......APPELLANT
(BY MS. THANIMA BEKAL, ADVOCATE FOR
SRI. HAREESH BHANDARY T, ADVOCATE)
AND:
MR. GOVINDA NAIK
S/O NAGA NAIK,
R/AT 11TH CROSS, BHARATH COLONY,
DAVANAGERE - 577 002
.....RESPONDENT
(BY SRI. N.RAMAKRISHNA, ADVOCATE FOR
SRI. M R HIREMATHAD, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO ALLOW THE APPEAL AND SET
ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED
04.01.2018 MADE IN C.C.NO.30/2017 BY THE COURT OF
JUDICIAL MAGISTRATE FIRST CLASS, 3RD COURT,
DAVANAGERE AND CONVICT THE ACCUSED/RESPONDENT
FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF
NEGOTIABLE INSTRUMENTS ACT, IN THE INTEREST OF
JUSTICE.
2 CRL.A NO.233 OF 2018
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
24.01.2024, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
Aggrieved by dismissal of complaint filed by him for
the offence punishable under Section 138 of N.I. Act by the
trial Court and thereby acquitting the respondent/accused,
complainant has come up with this appeal under Section
378(4) of Cr.P.C.
2. For the sake of convenience, the parties are
referred to by their rank before the trial Court.
3. It is the case of the complainant that he and
accused are good friends since many years. In the third
week of January 2016, accused approached the
complainant for financial assistance in a sum of
Rs.2,50,000/- with a promise to repay within three months.
In the first week of February, complainant paid the said
amount to the accused. When he failed to repay the same
as agreed, on repeated request and demand by the
complainant, in the third week of October 2016, accused
issued cheque dated 01.11.2016 with a promise of prompt
payment. However, on 08.12.2016, when complainant
presented it for encashment, it was dishonoured as "Funds
insufficient". Complainant got issued legal notice dated
26.12.2016. Though duly served, accused has neither paid
the amount due nor sent any reply and hence, the
complaint.
4. After due service of summons, accused
appeared and contested the case. He pleaded not guilty
and claimed trial.
5. To prove the allegations against the accused,
complainant examined himself as PW-1 and relied upon
Ex.P1 to 6.
6. During the course of his statement under
Section 313 Cr.P.C, accused has denied the incriminating
evidence led by the complainant.
7. However, accused has not led any oral or
documentary evidence on his behalf.
8. Vide the impugned judgment and order, the
trial Court acquitted the accused.
9. Aggrieved by the same, complainant has come
up with this appeal, contending that the impugned
judgment and order is illegal, arbitrary and unreasonable.
The trial Court has committed material irregularity in
appreciating the evidence placed on record. Having regard
to the fact that accused admit that the cheque belongs to
him and it bears his signature, the presumption is
operating in favour of the complainant, the trial Court
gravely erred in dismissing the complaint. Though the trial
Court has relied upon the decision in U.N.Samanth Vs.
K.G.N.Traders, it has not followed the same. Viewed from
any angle the impugned judgment and order are not
sustainable and prayed to allow the appeal, set aside the
same and convict the accused and sentence him
appropriately in accordance with law.
10. On the other hand, learned counsel for accused
supported the impugned judgment and order and
submitted that complainant has miserably failed to prove
financial capacity to lend Rs.2,50,000/- and also the
necessity of accused to borrow the same and in the light of
the same, the impugned judgment and order does not call
for any interference and prayed to dismiss the appeal also.
11. Heard arguments of both sides and perused the
record.
12. Thus, it is the definite case of the complainant
that accused borrowed hand loan of Rs.2,50,000/- and
issued the cheque in question towards repayment of the
same, which came to be dishonoured for insufficient funds.
13. Though accused admit that the cheque in
question is drawn on his account maintained with his
banker and it bears his signature, he has denied of having
borrowed any loan from the complainant. On the other
hand he has set up a defence that complainant and brother
of accused by name Halesh Nayak are friends. About five
years back twice he had borrowed hand loan of
Rs.15,000/- each. Since, he was not having any account,
accused issued two blank signed cheques and though the
said loan was repaid, misusing one of the cheque the
present complaint is filed. The accused has also disputed
the financial capacity of complainant to lend him
Rs.2,50,000/-.
14. Having regard to the fact that accused admit
that the cheque in question is drawn on his account
maintained with his banker and bears his signature, the
presumption under Section 139 of N.I. Act is attracted in
favour of the complainant. 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 in
which the cheque 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 the complainant is
required to prove his case beyond reasonable doubt.
15. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)1, 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:
(2014) 2 SCC 236
(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.
16. In Tedhi Singh Vs Narayan Das Mahant
(Tedhi Singh)2, 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.
2022 SCC OnLine SC 302
17. In fact, in APS Forex vs Shakti International
Fashion Linkers Pvt. Ltd (APS Forex)3, the Hon'ble
Supreme Court held that when accused rises issue of
financial capacity of complainant in support of his
probable defence, despite presumption in favour of
complainant regarding legally enforceable debt under
Section 139, 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.
18. In the light of ratio in the above decisions,
now the initial burden is on the complainant to prove his
financial capacity, only after which the accused is to be
called upon to prove his defence.
19. In order to prove his financial capacity, during
the course of his cross-examination, complainant has
deposed that he is running a business in the name and
style of "Shramajeevi Auto Links". He has produced the
pass book of his account maintained with Lakshmi Vilas
Bank at Ex.P6. During his cross-examination the accused
(2020) 12 SCC 724
has elicited that a sum of Rs.3,00,000/- is credited to his
account by Sriram Transport Finance. Complainant has
denied the suggestion that he has borrowed the said sum
from Sriram Transport Finance. In this regard he has
come up with an explanation that it was the amount in
respect of sale of a goods vehicle belonging to him.
Though he has stated that there are documents to show
that he was owning a goods vehicle and he sold the
same to Sriram Transport Finance, the complainant has
not chosen to produce any such documents.
20. During his cross-examination, the
complainant has stated that he paid Rs.1,00,000/- within
one week of request made by the accused and after 4-5
days he paid Rs.50,000/-. However, he has not stated
when the balance of Rs.1,00,000/- was paid to the
complainant. In the complaint, the complainant has
stated that accused requested loan in the third week of
January 2016 and he lent the money in the first week of
February 2016. As per Ex.P6 he has withdrawn a sum of
Rs.2,50,000/- on 01.02.2016. If at all the complainant
has withdrawn Rs.2,50,000/- from his account in order
to pay it to the accused, there was no impediment for
him to transfer the said amount to the account of
accused as he is also operating an account.
21. In the complaint the complainant has stated
that accused had promised to repay the loan within three
months and on his failure, after he repeatedly requested
the accused, he issued the subject cheque. However,
during his cross-examination complainant has deposed
that accused issued the cheque about 15-20 days after
borrowing the loan and that he has also agreed to pay
the interest at 2%. As admitted by the complainant, the
signature of accused and rest of the writing in the
cheque at Ex.P1 are in different ink and handwriting,
which supports the contention of the accused that Ex.P1
was blank when he gave it to the complainant.
22. It is elicited through PW-1 that accused is
working in a "Use and Pay Toilet" in Old Bus Stand,
Davanagere and apart from this, he is not having any
other source of income. The complainant has stated that
at the relevant point of time, accused was constructing a
house and for this purpose, he borrowed Rs.2,50,000/-
from him. At least the complainant would have produced
some documents to show that accused was constructing
a house and for the said purpose, he was in need of such
a substantial sum.
23. Perusal of the oral and documentary evidence
placed on record makes it evident that the complainant
has failed to prove his financial capacity and also that he
has paid Rs.2,50,000/- to the accused and towards
repayment of the same, he issued the cheque in
question. On the other hand, through preponderance of
probabilities, the accused has proved that the cheque
was issued blank.
24. Taking into consideration the oral and
documentary evidence placed on record, the trial Court
has come to the correct conclusion that complainant has
failed to prove his financial capacity and acquitted the
accused. After re-appreciation of oral and documentary
evidence placed on record, this Court is of the considered
opinion that there are no justifiable grounds to interfere
with the well reasoned judgment of the trial Court. In the
result, 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
04.01.2018 in C.C.No.30/2017 on the file
of JMFC-III Court, Davanagere, is
confirmed.
(iii) The Registry is directed to send back the
trial Court records along with copy of the
Judgment forthwith.
Sd/-
JUDGE
RR
