Karnataka High Court
M N Ramachandra vs Kempegowda J G on 23 February, 2024
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CRL.A No. 1944 of 2018
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 23RD DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MS JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1944 OF 2018
BETWEEN:
M N RAMACHANDRA
S/O NARASIMHAIAH
AGED ABOUT 49 YEARS
R/AT NO.76, 5TH CROSS
PREETHINAGARA, LAGGERE
BENGALURU - 560 058
...APPELLANT
(BY SMT. SOWBHAGYA V, ADVOCATE)
AND:
KEMPEGOWDA J G
S/O GUNDAIAH
AGED ABOUT 41 YEARS
R/AT NO.10, 2ND CROSS
PREETHINAGARA,
(BEHIND BETHAL COLLEGE) LAGGERE
BENGALURU - 560 058
Digitally signed ...RESPONDENT
by REKHA R
Location: High
(BY SRI. VIJAYAKUMAR PRAKASH, ADVOCATE)
Court of
Karnataka THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO a) SET ASIDE THE JUDGMENT OF ACQUITTAL,
DATED 09.08.2018 PASSED IN C.C.NO.20922/2015 AND
CONSEQUENTLY CONVICT THE ACCUSED FOR THE OFFENCE
PUNISHABLE UNDER SECTION 138 OF N.I.ACT AND FURTHER
IMPOSE FINE AT THE RATE OF DOUBLE OF THE CHEQUE
AMOUNT; b) PASS SUCH OTHER RELIEF/S THAT THIS HON'BLE
COURT DEEMS FIT TO GRANT IN THE CIRCUMSTANCES OF
CASE, IN THE INTEREST OF JUSTICE.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
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CRL.A No. 1944 of 2018
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JUDGMENT
This appeal is by the complainant challenging the
acquittal of respondent/accused for the offence punishable
under Section 138 of Negotiable Instruments Act, 1881
(hereinafter referred to as "N.I.Act" for short) by the trial
Court
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. Complainant filed the complaint under Section
200 of Cr.P.C against accused, alleging that accused is his
friend having known for the past 10 years. Because of this
acquaintance, accused borrowed hand loan of
Rs.20,00,000/- in cash on various dates as detailed below
to meet his domestic and personal commitments.
Sl. Date Amount in Rs.
No.
1. 03.01.2015 30,000-00
2. 31.01.2015 30,000-00
3. 02.03.2015 10,000-00
4. 27.04.2015 15,000-00
5. 21.05.2015 6,00,000-00
6. 05.06.2015 1,15,000-00
7. 15.06.2015 2,00,000-00
8. 24.06.2015 5,00,000-00
9. 02.07.2015 5,00,000-00
TOTAL Amount 20,00,000-00
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4. Accused had agreed to repay the same with
interest at 12% p.a. On 02.07.2015, i.e., at the time of
borrowing Rs.5,00,000/-, accused has issued a post dated
05.07.2015 cheque for Rs.20,00,000/- towards principle.
He promised to pay interest amount later i.e., on or before
10.07.2015. Accordingly, on 08.07.2015, when
complainant presented the cheque for realization, to his
utter shock and surprise, it was dishonoured on the
ground "Funds insufficient". Though, complainant brought
this fact to the notice of accused he did not take any steps
to pay the amount due. Complainant got issued legal
notice dated 25.07.2015 through RPAD. It is returned with
endorsement "Door locked intimation delivered". Accused
has intentionally failed to receive the legal notice and also
pay the amount due and hence, the complaint.
5. After due service of summons, accused
appeared and contested the case by pleading not guilty.
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6. In order to prove the allegations against the
accused, complainant examined himself as PW-1 and got
marked Ex.P1 to 6.
7. During the course of his statement under
Section 313 of Cr.P.C, accused has denied the
incriminating evidence lead by the complainant.
8. Accused has stepped into the witness box and
examined himself as DW-1 and got marked Ex.D1 to 3.
9. Vide the impugned judgment and order, the
trial Court has acquitted the accused.
10. Aggrieved by the same, complainant is before
this Court, contending that the trial Court has grossly and
glaringly erred in not properly appreciating the oral and
documentary evidence placed on record. Complainant has
produced reliable oral and documentary evidence to show
that he has lent Rs.20,00,000/- to the accused and
towards repayment of the same he has issued the subject
cheque. The evidence led by the complainant prove the
fact that since 10 years he is running bakery and milk
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business and having financial capacity to lend
Rs.20,00,000/- to the accused. The trial Court has also
failed to appreciate the fact that the concerned police have
filed 'B' report in respect of the complaint filed by the
accused against complainant herein as well as one
M.K.Krishna. Despite claiming that the cheque was issued
to M.K.Krishna during 2013 and he has not returned the
same, accused has not instructed his banker to stop
payment. Viewed from any angle, the impugned judgment
and order are not tenable and pray to allow the appeal,
convict the accused and sentence him in accordance with
law.
11. In support of his arguments, learned counsel for
complainant has relied upon the following decisions:
(i) P.Rasiya Vs. Abdul Nazer and Anr (P.Rasiya)1
(ii) Rajesh Jain Vs. Ajay Singh (Rajesh Jain)2
12. On the other learned counsel for
respondent/accused supported the impugned judgment
AIR Online 2022 SC 1373
AIR Online 2023 SC 807
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and order and submitted that complainant is not at all
known to him and he never borrowed any loan from him.
On the other hand the cheque in question was issued to
one M.K.Krishna in respect of chit transaction and instead
of returning the cheque he has got filed this complaint
through the complainant. The complainant never had the
capacity to lend and accused never had the necessity to
borrow Rs.20,00,000/- and rightly the trial Court has
dismissed the complaint and sought for dismissal of the
appeal also.
13. In support of his arguments, learned counsel for
accused has relied upon the decisions in Bannareddy and
Ors. Vs. State of Karnataka and Ors. (Bannareddy)3,
wherein the Hon'ble Supreme Court held that ordinarily
the High Court should not interfere with a well reasoned
judgment of trial Court unless there are strong and
compelling reasons exist in evidence itself, which can
dislodge the findings given by the trial Court. It further
held that in case of acquittal the presumption of innocence
(2018) 5 SCC 790
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is further reinforced, reaffirmed and strengthened.
Keeping in mind the ratio in this decision, it is necessary to
examine whether it is a fit case to interfere in exercise of
Appellate jurisdiction of this Court.
14. Heard arguments and perused the record.
15. 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.
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16. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)4, 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:
(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.
17. In Tedhi Singh Vs Narayan Das Mahant (Tedhi
Singh)5, 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
(2014) 2 SCC 236
2022 SCC OnLine SC 302
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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.
18. In fact, in APS Forex vs Shakti International
Fashion Linkers Pvt. Ltd (APS Forex)6, 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.
19. In the light of ratio in the above decisions of the
Hon'ble Supreme Court, it is necessary to examine
whether complainant has proved his financial capacity,
after which the burden would shift on the accused to prove
his defence.
(2020) 12 SCC 724
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20. Though accused admit that the cheque in
question belongs to him and it bears his signature, he has
disputed that complainant had no financial capacity to lend
him Rs.20,00,000/- and that he i.e., accused had the
necessity of borrowing such huge sum of money.
Therefore, the complainant is required to prove not only
his financial capacity but also the necessity of accused to
borrow huge sum of Rs.20,00,000/-.
21. In order to prove that he is having financial
capacity, the complainant has deposed that he is running a
bakery and also doing milk vending business. Out of
bakery business, he earn Rs.10,000/- per day and from
milk vending business he gets Rs.30,000/- per day and
after paying the amount due to the supplier, he retain the
balance as his profit. Although the complainant has not
produced any documents to prove that he is doing bakery
as well as milk vending business, he has produced the
statement of his account, which goes to show that he is
having substantial transaction through his account.
Although the complainant claim that he has lent
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Rs.20,00,000/- to the accused, according to him he has
not paid the said amount in one or in bulk payment, but
on different dates in different sum as detailed in the
complaint as well as in the legal notice.
22. During the course of his evidence complainant
has deposed that he has paid certain sum by withdrawing
from the account and remaining amount is paid out of
cash available with him. Out of the alleged payments as
detailed in the complaint there are corresponding entries
in respect of the amount at Sl.Nos.1,3,4,5,8 and 9.
However, the payment at Sl.No.9 is stated to be
Rs.5,00,000/-, whereas the corresponding entry for the
said date is Rs.4,90,000/-. During his cross-examination,
the complainant has admitted that the particular account
in question belongs to his business and having regard to
his claim that every day he does business in a sum of
Rs.10,000/- from bakery and Rs.30,000/- from milk
vending and after paying the amount due to the suppliers,
he retained profit, indicates that in all probability the
amount withdrawn from his account is concerning his
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business. It also does not inspire confidence in the mind of
the Court that if really the complainant has withdrawn the
said sum to pay to the accused, nothing prevented him
from paying the same through cheque or by bank transfer
which would have been more safe and it would have saved
the complainant from the burden of establishing the said
fact.
23. Moreover the complainant has not come up with
any purpose for the accused to borrow such a substantial
sum of Rs.20,00,000/-. This fact assumes importance,
especially when the accused is an auto driver. When the
complainant has claimed that he is a close friend of
accused since more than 10 years, in all probability, he
must be in the knowledge of the purpose for which the
accused has borrowed Rs.20,00,000/- from him. When
suggested that the accused is not having any other source
of income apart from being an auto driver, the
complainant has deposed that accused is owning 6 to 7
houses and he has rented them out and also he is owning
property at his native village. However, the complainant
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has not produced any such documents to evidence the
said fact. Of course he has not come up with any
justification for the accused to borrow Rs.20,00,000/-.
When the accused is not having capacity to repay such
substantial sum of money, no prudent man would take the
risk of lending the same to the accused. It also does not
inspire the confidence in the mind of the Court that despite
maintaining an account and dealing in substantial sum of
money day in and day out, why the complainant would
take the risk of lending Rs.20,00,000/- to the accused in
cash, rather than be safe and do the said transaction
through bank.
24. The accused has taken a specific defence that
he had participated in chit fund transaction with one M.K.
Krishna and had issued the subject cheque i.e., blank to
him by way of security and even after the said transaction
was over, he did not return cheque saying that it is
misplaced and handed over the same to the complainant
and got filed the complaint. Although complainant has
denied the said suggestion, he has admitted that he knows
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the said M.K.Krishna. In fact, the accused has filed a
criminal complaint against the present complainant as well
as M.K.Krishna with the police as per Ex.D1. It was
registered in Cr.No.417/2016 as per Ex.D2. Although, the
concerned police have filed 'B' report as per Ex.P9, the fact
of accused having chosen to file such complaint against
the present complainant as well as M.K.Krishna supports
and prove the defence taken by him, especially when the
complainant has failed to prove his financial capacity and
the necessity for accused to borrow a substantial sum of
Rs.20,00,000/-.
25. During his cross-examination, the complainant
has stated that he is not an Income Tax assessee and
consequently the fact of complainant having lent
Rs.20,00,000/- to the accused is not reflected in the
Income Tax returns. Although the complainant has claimed
that he has lent Rs.20,00,000/- to the accused, at page 3,
para-2 of his cross-examination, he has stated that
accused requested hand loan of Rs.10,00,000/- during
December 2014 and he has paid the said amount in three
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instalments in the month of January, February and June
2015 and except this he had no transaction with the
accused. This also creates doubt as to whether the loan
borrowed by the accused is Rs.20,00,000/- or
Rs.10,00,000/-.
26. Though the complainant has disputed that the
cheque in question was issued blank, the contents of the
cheque gives an indication that it is not in the handwriting
of accused except his signature. This also supports the
defence of the accused that when he signed the said
cheque, it was blank. The problem with the blank cheque
is that it can be presented to the bank through a person
who is having substantial transaction in his account and
project as though the said amount was paid to the accused
and build up the case accordingly. When the complainant
has failed to establish that accused being an auto driver
had the necessity of borrowing a substantial sum of
Rs.20,00,000/- it strengthen the suspicion of the Court
that in all probability complainant is a name lender for
utilising the blank cheque of accused.
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27. So far as the decisions of the Hon'ble Supreme
Court in P.Rasiya and Rajesh Jain are concerned, on
facts, the Hon'ble Supreme Court held that allegations
against accused are proved. However, in the present case,
the complainant has failed to prove that he had the
financial capacity and lent Rs.20,00,000/-. On the other
hand by preponderance of probabilities the accused has
proved that the cheque in question was issued to
M.K.Krishna and it is being misused by the complainant.
Therefore, these decisions are not applicable to the case
on hand.
28. Appreciating the oral and documentary
evidence placed on record in right perspective, the trial
Court has come to a correct conclusion that the
complainant has failed to prove his financial capacity and
dismissed the complaint. After re-appreciation of the
same, this Court finds no justifiable grounds to interfere
with the conclusions arrived at by the trial Court. In the
result, the appeal fails and accordingly, the following:
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ORDER
i) Appeal filed by the complainant under
Section 378(4) is dismissed.
ii) The impugned judgment and order dated
09.08.2018 in C.C.No.20922/2015 on the
file of XII Additional Chief Metropolitan
Magistrate, Bengaluru City is confirmed.
iii) The Registry is directed to send back the
trial Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
