Karnataka High Court

M G Nagaraja vs K N Sathish on 21 February, 2024

                            -1-
                                     CRL.A.No.1106 of 2015


  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

      DATED THIS THE    21ST DAY OF FEBRUARY, 2024

                         BEFORE
         THE HON'BLE MR JUSTICE ANIL B KATTI
        CRIMINAL APPEAL NO. 1106 OF 2015 (A)
BETWEEN:

M.G.NAGARAJA
S/O GAVIYAPPA,
AGE 34 YEARS,
MUDDAIAHNAPALYA,
GIDADA KONENAHALI DAKALE,
YASHWANTHPURA HOBLI,
BANGALORE-560 091.
                                               ...APPELLANT
(BY SRI.NAGESH M.V. PATIL, ADVOCATE FOR
    SRI B.S.PRASAD, ADVOCATE)

AND
K.N.SATHISH
S/O NARASAPPA,
AGE 36 YEARS,
APPANNAPPA EXTENSION,
BESIDES TO BBMP OFFICE,
THUNGANAGARA MAIN ROAD,
VISHWANEEDAM POST,
YESHWANTHPURA HOBLI,
BANGALORE-560 091.
                                              ..RESPONDENT
(BY SRI HAREESH BHANDARY T., ADVOCATE)

      THIS CRL.A. IS FILED U/S.378(4) CR.P.C BY THE ADVOCATE
FOR THE APPELLANT PRAYING TO SET ASIDE THE JUDGMENT
DATED 04.07.2015 PASSED BY THE XXII A.C.M.M., BANGALORE
IN C.C.NO.22137/2014-ACQUITTING THE RESPONDENT/ACCUSED
FOR THE OFFENCE P/U/S 138 OF N.I. ACT.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
13.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
                                 -2-
                                             CRL.A.No.1106 of 2015


                           JUDGMENT

Appellant/complainant feeling aggrieved by judgment

of Trial Court on the file of XXII Addl.Chief Metropolitan

Matistrate, Bengaluru City in C.C.No.22137/2014, dated

04.07.2015 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 arise for

consideration:

1) Whether the impugned judgment of 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

complainant and accused are known to each other.

Accused has approached the complainant for financial

assistance of Rs.1,50,000/- on 15.01.2013. Accused has

agreed to repay the same within a period of two months.

Accused in order to discharge the said legally enforceable

debt issued cheque bearing No.942542 dated 22.03.2013

for Rs.1,50,000/- drawn on State Bank of India,

Anjananagar Branch, Bengaluru Ex.P.1. Complainant

presented the said cheque through his banker on State

Bank of Mysore, Kengeri Branch, Bengaluru on 22.03.2013

and the same was dishonoured as "Funds Insufficient"

dated 23.07.2013 Ex.P.2. Complainant issued demand

notice dated 14.08.2013 Ex.P.3 through RPAD, postal

receipt is produced at Ex.P.4 and the postal

acknowledgement card for having served demand notice

to accused is produced at Ex.P.5. Accused has given reply

dated 02.09.2013 Ex.P.6 to the demand notice issued by

complainant Ex.P.3 denying his liability to pay the amount

covered under cheque Ex.P.1. 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"). Thereafter, complainant has filed

complaint on 27.09.2013 within a period of one month

from the date of accrual of cause of action in terms of

Section 142(1)(b) of N.I.Act. Therefore, statutory

presumption in terms of Section 118 and 139 of N.I.Act

will have to be drawn in favour of 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 view 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 Section 118 and

139 of N.I. Act will have to be drawn.

8. It is now up to accused to place rebuttal

evidence to displace the statutory presumption available in

favour of complainant. In the present case accused apart

from relying on the material produced by complainant also

relied on the evidence of DWs.1 to 5 and no documents

were marked on behalf of accused. Whether, the said

rebuttal evidence placed on record by accused would be

sufficient to displace the statutory presumption in favour

of complainant is to be decided.

9. It is the specific defence of accused in the reply

notice dated 02.09.2013 Ex.P.6 that accused is one of the

member of the chit fund run by complainant commenced

from January 2009 for Rs.1,00,000/- to conclude the same

on August 2010 for a period of 20 months with chit

amount of Rs.5,000/- per month. Accused has bid the

chit in the month of October 2009 for Rs.36,000/- and

received balance amount of Rs.64,000/-. At that time,

complainant as a security for the said amount taken one

blank signed cheque and on demand promissory note.

Accused has paid an entire chit amount and the chit was

closed. However, complainant did not return the blank

signed cheque and the on demand promissory note

executed by accused and by misusing the blank signed

cheque filed this false case. The burden of proving this fact

to substantiate this defence is on the accused.

10. DW.1 has deposed to the effect that

complainant was introduced to him in the year 2008 by

Muddurangamma and Srinivasa. Complainant was running

chit business in the year 2009 for Rs.1,00,000/- and he

was member of the said chit fund. At that time

complainant obtained blank signed cheque and on demand

pro note. After the closure of the chit, accused demanded

the complainant to return the blank signed cheque and on

demand promissory note. The complainant replied that it

is misplaced somewhere and therefore, he remained

silent. On receiving the demand notice Ex.P.3 he came to

know that the said blank signed cheque has been misused

by complainant to file this false case.

11. DW.2 Muddurangamma @ Mudduramakka and

DW.3 Srinivasa is husband and wife who has introduced

the complainant to accused are examined and they have

also spoken about the chit fund business of complainant.

DW.4 Lakshimnarayana and DW.5 Raju are the other two

members of the said chit business of complainant they

have also spoken about the chit business of complainant

and they are members of the said chit fund of

Rs.1,00,000/-.

12. According to defence of accused and the

evidence of himself and that of aforementioned witnesses,

the chit of complainant was commenced in October 2009

and the same was concluded in the month of October after

20 months. Accused has paid the chit in the month of

October 2009 for Rs.36,000/- and received balance of

Rs.64,000/-. It is at that time complainant obtained blank

signed cheque of accused as a security for the chit money

of Rs.1,00,000/-. It means that even according to accused

he has issued blank signed cheque in the month of

October 2009. Whereas, the cheque in question Ex.P.1 is

issued on 22.03.2013 there is time gap of more than 3

years 11 months from the date of closure of chit business

till the issuance of reply on 02.09.2013 Ex.P.6. If at all

accused has issued blank signed cheque as a security for

the chit amount of Rs.1,00,000/- which she has taken in

the month of October 2009 then why the accused kept

quite for all these years without taking any action against

complainant for non return of the blank signed cheque till

the date of giving reply on 02.09.2013 Ex.P.6. Accused

has offered no any explanation for said inordinate delay in

putting forth his defence for the first time in the reply

regarding non return of cheque given by him to

complainant as a security. Therefore, the contention of

accused that Ex.P.1 cheque was issued as a security for

the chit fund run of complainant in the year 2009 cannot

be accepted.

13. DWs.2 and 3 are the witnesses said to have

introduced accused to complainant. Their evidence would

go to show that there was some sale transaction with

respect to Sy.No.32/7 belongs to DW.2 and the same was

- 10 -

questioned by other family members and suit is pending,

further complainant did not oblige to give evidence in

favor of DW.2. In support of the defence of accused DWs.4

and 5 were examined. DW.4 was not offered for cross-

examination and DW.5 has not been cross-examined.

Therefore, there examination-in-chief alone cannot be

taken into consideration without there being any test of

cross-examination. The accused out of the aforementioned

evidence placed on record has failed to probabilise his

defence that he has issued cheque Ex.P.1 on October 2009

as a security for the money of Rs.1,00,000/- and the same

has been misused by complainant

14. The another contention of accused in the cross-

examination of PW.1 is that the cheque in question Ex.P.1

was altered in showing the year in which it was issued. On

perusal of the cheque Ex.P.1, it would go to show that

there is a gap to write the date and month and thereafter

it is printed as "200" while mentioning the year of the

cheque "1" is written on "0". There is no tampering in

correcting the printed version in cheque Ex.P.1. The bank

- 11 -

has not refused to honour cheque on the premises that

year 2013 out of it "1" is written on the printed figure "0".

Therefore, there is no question of tampering the cheque

Ex.P.1 by complainant to take any benefit of bringing

action within the period of limitation. Therefore, the

contention of accused that there is alteration of cheque

also cannot be legally sustained.

15. The Trial Court has proceeded to believe the

oral testimony of DWs.1 to 5 that the cheque in question

Ex.P.1 was issued by accused as a security for the chit

amount of Rs.1,00,000/- in the month of October 2009.

The Trial Court did not appreciate the evidence of Dws.1 to

5 and non consideration of accused having taken no any

steps against complainant for almost more than 3 years 11

months in with holding the cheque of accused which is

alleged to have been given as a security. Further has also

offered no any explanation in not taking any action but

simply proceeded to believe the oral testimony in holding

that Ex.P.1 cheque was issued by accused as a security for

the amount taken by accused in October 2009 and the

- 12 -

said finding cannot be legally sustained in view of the

reasons recorded as above.

16. When once the issuance of cheque and

signature of accused is either admitted or proved, then in

the absence of any rebuttal evidence or rebuttal evidence

placed on record by accused held to be unreliable, then

statutory presumption in terms of Section 118 and 139 of

N.I.Act will continue to operate in favour of complainant.

Complainant out of the evidence placed on record has

proved that accused has issued the cheque in question

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

dishonoured when presented for collection through the

banker of the complainant for want of sufficient fund in the

account of accused. Therefore, it will have to be held that

complainant has proved that accused has committed an

offence punishable under Section 138 of N.I.Act.

17. Now question remains is imposition of sentence.

The Court while imposing the sentence must take into

consideration the offence committed by accused, nature of

evidence placed on record and other attending

- 13 -

circumstances under which the cheque Ex.P.1 came to be

issued for lawful discharge of debt. If the said factors are

taken into consideration and the evidence on record is

appreciated, then if the accused is sentenced to pay fine of

Rs.1,10,000/- and in default of payment of fine shall under

go Simple Imprisonment for a period of 3 months is

ordered will meet the ends of justice. Consequently,

proceed to pass the following:

ORDER

Appeal filed by appellant/complainant is hereby

allowed.

The judgment of Trial Court on the file of

XXII Addl.Chief Metropolitan Matistrate, Bengaluru City in

C.C.No.22137/2014, dated 04.07.2015 is hereby set

aside.

Accused is convicted for the offence punishable under

Section 138 of N.I.Act and sentenced to pay fine of

Rs.1,60,000/- and in default of payment of fine shall

undergo Simple Imprisonment for a period of 3 months.