Karnataka High Court

Sri Ananthkumar K vs Shri V.V.Subba Rao on 23 February, 2024

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                                     CRL.A.No.997 of 2012


IN THE HIGH COURT OF KARNATAKA AT BENGALURU

  DATED THIS THE         23RD DAY OF FEBRUARY, 2024

                          BEFORE
       THE HON'BLE MR JUSTICE ANIL B KATTI
        CRIMINAL APPEAL No.997 OF 2012 (A)

BETWEEN:

SRI.ANANTHKUMAR K.,
R/O.NO.33, FLAT NO.210
PARAMANANDA ENCLAVE
MARKET ROAD
NEW THIPPASANDRA
BANGALORE-560 075
                                            ...APPELLANT
(BY SRI.NAGARAJA KRAPAKAR HEGDE, ADVOCATE FOR
    SRI.S.NAGABHUSHAN, ADVOCATE)

AND:

SHRI.V.V.SUBBA RAO
C/O.RAVI STUDIO
NO.321/4, C.M.H.ROAD
INDIRANAGAR
BANGALORE-560 038

ALSO AT
V.V.SUBBA RAO
NO.39, 1ST FLOOR
1ST CROSS, VIGNANANAGAR
BANGALORE-560 075
                                            ...RESPONDENT
(BY SRI.MADHAV KASHYAP, ADVOCATE)

     THIS APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C.,
PRAYING TO SET ASIDE THE ORDER DATED:30.04.2012 PASSED
BY THE XV ADDL. JUDGE AND 23RD ACMM, SCCH-10, BANGALORE
IN C.C.NO.26390/2008 - ACQUITTING THE RESPONDENT/
ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I.ACT.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
14.02.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT
THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
                                 -2-
                                            CRL.A.No.997 of 2012




                            JUDGMENT

Appellant/complainant feeling aggrieved by judgment

of Trial Court on the file of XV Additional Small Causes and

XXIII Additional Chief Metropolitan Magistrate, Mayo Hall

Unit, Bengaluru in CC.No.26390/2008 dated 30.04.2012,

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 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 and his family members are known to the

complainant for several years. Accused along with his wife

approached the complainant for financial assistance of

Rs.1,00,000/- to meet his family necessities and business.

Complainant paid the said amount to the accused in the

second week of August 2006, who assured to repay the

same within eight months. After lapse of eight months,

complainant demanded his money back. Accused for lawful

discharge of his debt issued cheque bearing No.094531

dated 31.05.2007 for Rs.1,00,000/- drawn on Vijaya Bank,

Indira Nagar Branch, Bengaluru - Ex.P1. Complainant

presented the said cheque for collection on 06.08.2007.

The said cheque was dishonoured as "Insufficient Funds"

vide Bank endorsement dated 09.08.2007 - Ex.P2.

Complainant issued demand notice dated 20.08.2007 -

Ex.P3 through RPAD., and UCP., on both addresses of

accused. The postal receipts are produced at Exs.P4 and

P5, UCP., receipt is produced at Ex.P6. Postal

acknowledgements are produced at Exs.P7 and P8. If the

above referred documents are perused and appreciated

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

that the 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 on 01.10.2007 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. It is the defence of accused that he has issued

the cheque to Shambaiah and on receipt of demand

notice, he questioned as to how Ananth Kumar issued

notice on the cheque issued to him. However, the said

Shambaiah has disclosed that Ananth Kumar is his

business partner and for the purpose of Income Tax

Ananth Kumar has issued notice. He has never taken any

loan from the complainant and by misusing the signed

cheque given to Shambaiah, this false case is filed. It is

now upto the accused to probabalise his above referred

defence to displace the statutory presumption available in

favour of complainant. Accused to probabalise his defence

apart from relying on the materials produced by the

complainant also relied on his own evidence as DW.1 and

the documents at Exs.D1 to D4.

9. Before adverting to the merits of the case, it

would be appropriate to take note of cherised history of

this case. The case was earlier disposed of by Judgment

dated 29.09.2009 by acquitting the accused. The same

was challenged by the complainant before this Court in

Crl.A.Nos.917/2009 to 922/2009. This Court by order

dated 30.11.2010, has allowed the appeals and remanded

the matters to Trial Court for disposal of the same in

accordance with law. The Trial Court after remand, having

heard both sides, again acquitted the accused by

Judgment dated 30.04.2012.

10. It is the case of complainant that during second

week of August 2006, he has paid Rs.1,00,000/- to the

accused as demanded by accused to meet his business

needs and family necessities. Accused has assured to

repay the said amount within eight months. Accused in

order to discharge his legally enforceable debt issued

cheque - Ex.P1. Accused has denied that he has taken

any hand loan of Rs.1,00,000/- from the complainant. It is

the defence of accused that complainant is unknown to

him and he has issued cheque to Shambaiah. Complainant

has misused the said cheque and filed this false case.

11. Accused during the course of his evidence as

DW.1 has deposed to the effect, he has no any

acquaintance with the complainant. On receiving the

notice from the complainant, he approached Shambaiah

and enquired as to who is Ananth Kumar to cause notice

to him. The said Shambaiah has disclosed that Ananth

Kumar is his business partner and the notice was sent for

the purpose of Income Tax with respect to their business.

He further deposed to the effect that he has not made any

transaction with the complainant and he has filed false

case against him.

12. Accused during the course of cross-examination

admits that cheque - Ex.P1 was drawn on the account

maintained by him in Vijaya Bank, Indira Nagar Branch,

Bengaluru with his signature. However, accused has

denied that he has issued the said cheque to complainant

for lawful discharge of debt. Accused has also further

admitted that he has not issued reply to the demand

notice - Ex.P3. It means that the accused on the first

available opportunity has failed to put-forth his defence in

denying the issuance of cheque - Ex.P1 for lawful

discharge of debt. However, during the course of his

cross-examination claims that he has issued 13 cheques to

one Rajan on the account maintained by him and one of

such cheques has been misused by the complainant and

filed this false case. Accused has not placed any evidence

on record as to how the said Rajan is connected with

complainant and the occasion for him to secure the cheque

said to have been issued to Rajan, so that reasonable

inference can be drawn for complainant coming in

possession of cheque from Rajan.

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13. Accused has produced the certified copy of

complaint in C.C.No.26734/2008, filed by M.Rajan against

him and another certified copy of complaint in

C.C.No.26406/2008 filed by the very same M.Rajan

against him. The documents at Ex.D3 is the certified copy

of the Order Sheet in C.C.No.26734/2008 and Ex.D4 is the

certified copy of the Order Sheet in C.C.No.26406/2008.

Accused except producing the documents at Exs.D1 to D4

has not offered any explanation or evidence to show as to

how the said Rajan is connected with the transaction

between the accused and complainant involved in the

present case. The entire evidence of DW.1 and the cross-

examination of PW.1 is silent on this aspect. The

examination-in-chief of DW.1 speaks about his issuance of

cheque to one Shambaiah, but contrary to that statement

he produces the documents at Exs.D1 to D4, which are

proceedings between the said Rajan and accused.

Accused has not made any basic foundation in put-forthing

his specific defence. On the other hand, given inconsistent

evidence regarding issuance of cheque to Shambaiah and

at another breath spoken about issuance of signed cheque

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to one Rajan. Therefore, accused without establishing the

nexus between his transaction with Rajan and the reason

for complainant coming in possession of cheque issued by

him, his evidence and the document at Exs.D1 to 4 cannot

be relied. Accused admittedly has not taken any action

either against complainant or against the said Rajan for

misusing of cheque. Therefore, the uncorroborated

evidence of accused that he has given signed cheque

either to Shambaiah or to Rajan and the same has been

misused by the complainant by filing this false case cannot

be accepted.

14. Learned counsel for accused relied on the Co-

ordinate Bench Judgment of this Court in Santosh S/o.

Nagesh Nayak Vs. Haribhai S/o. Lalji Patel in

Crl.A.No.2784/2012 dated 11.11.2020, wherein, this

Court found material contradictions and improvisation in

the evidence further earlier transaction of 2004 and

explanation of accused was found to be more probable.

Therefore, on overall appreciation of evidence on record,

omissions and contradictions with regard to the period of

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transaction held that the statutory presumption available

in favour of the complainant stood rebutted. Whereas, in

the present case, other than denial suggestions to PW.1

and the uncorroborated evidence of DW.1, there is no

evidence on record to prove the non-existence of legally

enforceable debt. In terms of Section 118(a) of the NI Act,

when the issuance of cheque with the signature of accused

admitted or proved then presumption has to be drawn

regarding the passing of consideration covered under

cheque - Ex.P1. Therefore, the aforementioned judgment

has no application to the facts of this case.

15. Learned counsel for accused in support of his

contentions regarding the scope of Appellate Court in

interfering with the judgment of acquittal passed by the

Trial Court, relied on the judgment of the Hon'ble Apex

Court in C. Antony Vs. K.G.Raghavan Nair reported in

(2003) 1 SCC 1, wherein, it has been observed and held

in paragraph No.6 as under:-

"6. This Court in a number of cases has held that though the appellate court has full power to review the evidence upon which the

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order of acquittal is founded, still while exercising such an appellate power in a case of acquittal, the appellate court, should not only consider every matter on record having a bearing on the question of fact and the reasons given by the courts below in support of its order of acquittal, it must express its reasons in the judgment which led it to hold that the acquittal is not justified. In those line of cases, this Court has also held that the appellate court must also bear in mind the fact that the trial court had the benefit of seeing the witnesses in the witness box and the presumption of innocence is not weakened by the order of acquittal, and in such cases, if two reasonable conclusions can be reached on the basis of the evidence on record, the appellate court should not disturb the finding of the trial court."

In view of the principles enunciated in this judgment of

Hon'ble Apex Court, reasons must be recorded by the

appellate court for reversing the judgment of acquittal

passed by the Trial Court.

16. Learned counsel for accused also placed

reliance on the judgment of Hon'ble Bombay High Court in

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Sanjay Mishra Vs. Kanishka Kapoor @ Nikki and

another reported in 2009(4) Mh.L.J. 155, wherein it has

been observed and held that unaccounted amount would

not be said that was a legally enforceable debt within the

meaning of Section 138 of the Act. It has been further

held that the standard of proof so as to prove a defence is

"preponderance of probability". Inference of

preponderance of probabilities can be drawn even by

reference to circumstances. In the present case, the

transaction involved is not the outcome of the

unaccounted money and the accused by preponderance of

probabilities has failed to probabalise his defence to

displace the statutory presumption available in favour of

complainant. Therefore, the said decision has no

application to the facts of the present case.

17. When complainant out of the evidence placed

on record has proved that accused has issued cheque in

question - Ex.P1 with signature on the account maintained

by him and the same is dishonoured with the Bank

endorsement as "Insufficient Funds" and complainant

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could not realize the cheque amount, it will have to be

held that complainant has proved that the accused has

committed the offence punishable under Section 138 of

the NI Act. When the accused failed to probabalise his

defence or the rebuttal evidence cannot be legally

sustained then, the statutory presumption in terms of

Section 118 and 139 of the NI Act will continue to operate

in favour of complainant. In the present case, accused has

failed to probabalise his defence out of the evidence

placed on record to displace the statutory presumption

available in favour of complainant. Therefore, it will have

to be held that complainant has proved that the accused

has committed the offence punishable under Section 138

of the NI Act. The contrary finding recorded by the Trial

Court which is against the evidence on record cannot be

legally sustained.

18. The question now remains regarding imposition

of sentence. The Court while imposing the sentence will

have to take into consideration the offence committed by

the accused, the nature of evidence placed on record and

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the other attending circumstances in issuing cheque

covered under Ex.P1. In view of the facts and

circumstances of the present case and the evidence placed

on record are taken into consideration then if the accused

is sentenced to pay a fine of Rs.1,10,000/- and in default

of payment of fine amount sentenced to undergo 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 dated 30.04.2012 passed

in CC.No.26390/2008 on the file of XV Additional Small

Causes and XXIII Additional Chief Metropolitan Magistrate,

Mayo Hall Unit, Bengaluru, is hereby set aside.

Accused is convicted for the offence punishable under

Section 138 of the NI Act and sentence to pay a fine of

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