Karnataka High Court
Smt. Komala vs Smt. Kala K on 26 February, 2024
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CRL.A No. 2044 of 2019
NC: 2024:KHC:7987
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 26TH DAY OF FEBRUARY, 2024
BEFORE
THE HON'BLE MS JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.2044 OF 2019
BETWEEN:
SMT. KOMALA
W/O K VIJEKUMAR,
AGED ABOUT 44 YEARS,
RESIDING AT NO.108,
T CHANNAIAH LAYOUT,
2ND CROSS, NAGAVARA,
ARABIC COLLEGE POST,
BENGALURU - 560 045
...APPELLANT
(BY SRI. GOPALAKRISHNA I, ADVOCATE)
AND:
SMT. KALA K
W/O SRI RANGANATHA,
AGED ABOUT 44 YEARS,
R/AT NO.62/2, 3RD CROSS,
Digitally
signed by CHENNAIAH LAYOUT,
REKHA R BENGALURU - 560 045
Location: High ...RESPONDENT
Court of (BY SRI. HONNAPPA S, ADVOCATE)
Karnataka
THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO a) SET ASIDE THE IMPUGNED JUDGMENT OF
ACQUITTAL OF RESPONDENT DATED 05.04.2018 PASSED IN
C.C.NO.52164/2015 BY THE HON'BLE LVIII ADDL. CHIEF
METROPOLITAN MAGISTRATE, MAYOHALL UNIT, BENGALURU
(ACMM-58) AND CONSEQUENTLY PLEASED TO CONVICT HER
AS PER LAW IN THE INTEREST OF JUSTICE; b) GRANT SUCH
OTHER RELIEF/RELIEFS AS THIS HON'BLE COURT MAY DEEM
FIT TO GRANT IN THE CIRCUMSTANCES OF THE ABOVE
PETITION, IN THE INTEREST OF JUSTICE.
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CRL.A No. 2044 of 2019
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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS
DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Being aggrieved by the acquittal of
respondent/accused for the offence punishable under
Section 138 of the Negotiable Instrument Act, 1881 (for
short 'N.I. Act') by the trial Court, appellant/complainant
has come up with this appeal under Section 378 (4) of
Cr.P.C.
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. Complainant filed the complaint, contenting that
accused is known to her since past 23 years. During 2010,
accused became a tenant under the complainant. During
2012, accused was running chit business. On 15.06.2012,
accused opened a chit for Rs.1,50,000/- with 50 members
and the members were required to pay Rs.3,000/- p.m.
Complainant invested in 11 chits. The first chit was closed
on 15.07.2014. After closure of the said chit, a sum of
Rs.16,50,000/- belonging to the complainant remained
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with the accused. On 15.09.2012, accused started another
chit for Rs.1,00,000/- with 40 members and they were
required to pay monthly instalments of Rs.2,500/-.
Complainant invested in four chits. After closure of the
said chit, a sum of Rs.3,60,000/- belonging to the
complainant remained with the accused. Accused started
third chit on 15.02.2013 for a sum of Rs.99,000/- with 33
members. They were required to pay Rs.3,000/- p.m.
Complainant invested in five chits. It was completed on
15.09.2014 and a sum of Rs.4,95,000/- belonging to the
complainant remained with the accused.
3.1 It is further case of the complainant that
accused also started Honey X-Mas Benefit Scheme. In
order to run the said scheme, accused borrowed a hand
loan of Rs.4,50,000/- during December 2012. Again
accused borrowed a sum of Rs.5,50,000/- during
December 2013. She promised to repay the same along
with the chit amount as early as possible.
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3.2 Complainant is having sufficient source of
income. She is getting rent in a sum of Rs.60,000/- p.m.
She is running a cloth stores at Shivajinagar. Her husband
is a building contractor. With all this, the complainant had
sufficient source of income to invest in the chits and also
to give hand loan to the accused.
3.3 Accused failed to pay the amount due. When
demanded accused promised to pay the amount as early
as possible. She was due in a total sum of Rs.35 lakhs. In
this regard accused has executed a hand loan agreement
dated 14 11.2014 for a sum of Rs.35 lakhs. On the same
day she gave a post dated 02.01.2015 cheque for Rs.35
lakhs and assured prompt payment. However, when
complainant presented the cheque for realization, it was
dishonoured on the ground "Funds insufficient".
Immediately, complainant brought this fact to the notice
of the accused. However, the accused did not respond.
Hence, complainant got issued legal notice dated
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21.01.2015. The accused has neither paid the amount due
nor sent any reply and hence the complaint.
4. After due service of summons, the accused
appeared through counsel and contested the matter. She
pleaded not guilty and claimed trial.
5. In order to prove the allegations against the
accused, complainant has examined herself as PW-1 and
got marked Ex.P1 to 11.
6. During the course of her statement under
Section 313 Cr.P.C, accused has denied the incriminating
evidence led by the complainant.
7. Accused has not led any defence evidence.
8. Vide the impugned judgment and order the trial
Court acquitted the accused.
9. Being aggrieved by the same, complainant has
come up with this appeal contending that the complainant
is not required to prove the allegations against accused as
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in case of a civil suit and the trial Court has failed to
appreciate the same. In the light of presumption under
Sections 118 and 139 of the N.I Act, the trial Court has
erred in placing the entire burden on the complainant,
especially when the accused has failed to send the reply
and also lead defence evidence. The trial Court has also
failed to appreciate the evidence led by the complainant to
prove her financial capacity. The trial Court has also failed
to take into consideration the loan agreement dated
14.11.2014 between the complainant and accused, which
prove the fact of accused owing Rs.35 lakhs to the
complainant. The impugned judgment and order resulted
in gross miscarriage of justice and pray to set aside the
same, convict the accused and sentence her in accordance
with law.
10. In support of her arguments, the learned
counsel for complainant has relied upon the following
decisions:
(i) M.S.Sathya Narayana Vs. Lingaraje Urs
(M.S.Sathya Narayana)1
2022(3) AKR 381: AIR 2022 KAR 2570
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(ii) Oriental Bank of Commerce Vs. Prabodh Kumar
Tewari (OBC)2
(iii) P.Rasiya Vs. Abdul Nazer and Anr.
(P.Rasiya)3
(iv) Kumar Exports Vs. Sharma Carpets
(Kumar Exports)4
(v) K.N.Beena Vs. Muniyappan and Others
(K.N.Beena)5
(vi) Hiten P.Dalal Vs. Bratindranath Banerjee
(Hiten P.Dalal)6
(vii) K.Subramani Vs. K.Damodara Naidu
(K.Subramani)7
(viii) Rohitbhai Jivanlal Patel Vs. State of Gujarat
and Anr. (Rohitbhai)8
(ix) Uttam Ram Vs. Devinder Singh Hudan
(Uttam Ram)9
11. On the other hand, learned counsel for accused
has supported the impugned judgment and order of the
trial Court and has sought for dismissal of the appeal also.
2022 Live Law (SC) 714
2022 SCC Online SC 1131
(2009) 2 SCC 513
(2001) 8 SCC 458
(2001) 6 SCC 16
(2015) 1 SCC 99
(2019) 18 SCC 106
(2019) 10 SCC 287
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12. Heard elaborate arguments of both sides and
perused the record.
13. Thus, it is the definite case of complainant that
accused was running chit fund transaction and she
participated in three such chits and though she was
entitled for a sum of Rs.16,50,000/-, Rs.3,60,000/- and
4,95,000/-, she left the same with the accused. Again
accused borrowed hand loan of Rs.4,50,000/- and
Rs.5,50,000/-. Thus, in all the accused was liable to pay
Rs.35 lakhs to her and in this regards she has executed
loan agreement and issued the subject cheque. So far as
her financial capacity is concerned, the complainant has
pleaded that she is owning several properties from which
she is getting monthly rent of Rs.65,000/-. She is running
a sari business at Commercial Street and with that also
she is having income. Her husband is a Civil Contractor
and he is also earning substantially.
14. Though the accused has not sent any reply to
the legal notice and also not stepped into the witness box
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and given evidence, during the cross-examination of the
complainant, she has come up with a definite defence that
it was the complainant who was running the chit fund
transaction and in connection with the same she has taken
the subject cheque and stamp paper by way of security.
She has also contented that the legal notice is not served
on her. Of course, during the cross-examination of
complainant, the accused has challenged the financial
capacity of complainant.
15. Before going to the merits of the case, it is
necessary to refer to the decisions relied upon by the
complainant.
(i) In Hiten P.Dalal referred to supra, the Full
Bench of the Hon'ble Supreme Court held that it is
obligatory on the part of the Court to presume the liability
of drawer of the cheque in every case where the factual
basis for such presumption is established. But the
presumption is rebuttable on preponderance of
probabilities.
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(ii) Similarly, in K.N.Beena, it was held that in
view of the provisions contained in Sections 118 and 139
of N.I. Act, the Court has to presume that cheque has
been issued for discharging a debt or liability, but it is
rebuttable. Mere denial by the accused is not sufficient. He
is required to lead cogent evidence.
(iii) In Kumar Exports, the Hon'ble Supreme Court
held that as soon as the complainant prove that cheque is
executed by the accused, presumption under Sections 118
and 139 of N.I. Act comes into play and on facts it was
held that declaration by the complainant in the Sales Tax
Department that no sale had taken place is valid proof
that cheques were not issued by the accused in discharge
of any debt or other liability.
(iv) In K.Subramani, on facts the Hon'ble Supreme
Court held that the trial Court was justified in acquitting
the accused as complainant failed to prove his financial
capacity.
(v) In Rohitbhai, the Hon'ble Supreme Court held
that the presumption under Section 139 includes that the
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cheque issued is for discharge of any legally recoverable
debt or liability and accused can challenge the same and
rebut. But the initial presumption is in favour of
complainant. Mere denial or mere creation of doubt is not
sufficient.
(vi) In Uttam Ram, it was held that a meaningful
reading of the provisions of Sections 20, 87 and 139
makes it amply clear that a person who signs a cheque
and makes it over to the payee remains liable unless he
adduces evidence to rebut the presumption that the
cheque has been issued for payment of a debt or in
discharge of a liability.
(vii) In P. Rasiya, the Hon'ble Supreme Court held
that the High Court erred by reversing the conviction
imposed by the trial Court and confirmed by the Sessions
Court by not rising presumption under Section 139 of N.I.
Act and that accused has failed to rebut the same.
(viii) In OBC, the Hon'ble Supreme Court held that a
drawer of cheque handing over a cheque signed by him is
liable unless it is proved by adducing evidence that the
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cheque was not in discharge of a debt or liability. On facts
it was held that the evidence of handwriting expert on
whether the accused filled the cheque is immaterial to
determine the purpose for which the cheque was handed
over. The presumption which arises on signing of cheque
cannot be rebutted merely by report of handwriting
expert.
16. Now coming to the fact of the present case.
Having regard to the fact that accused admit that the
cheque in question is drawn on her account, maintained
with her banker and bears her signature, the presumption
under Section 139 of N.I Act, is attracted and is operating
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
her case. Of course, it is sufficient for the accused to
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probabilise her defence, whereas the complainant is
required to prove her case beyond reasonable doubt.
17. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)10, 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.
18. In Tedhi Singh Vs Narayan Das Mahant (Tedhi
Singh)11, the Hon'ble Supreme Court held that where the
accused has failed to send reply to the legal notice,
(2014) 2 SCC 236
2022 SCC OnLine SC 302
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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.
19. In fact, in APS Forex vs Shakti International
Fashion Linkers Pvt. Ltd (APS Forex)12, 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.
(2020) 12 SCC 724
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20. In the light of ratio in the above decisions and
also the specific defence taken by the accused, it is for the
complainant to prove that the legal notice is duly served
on the accused. It is also for the complainant to prove her
financial capacity, after which accused is required to
establish her defence.
21. So far as the service of legal notice is
concerned, the complainant has not produced the postal
acknowledgement. However, she has produced a
Complaint Settled Reply sent by the postal department
stating that the registered letter with acknowledgement
with the transaction number RK184896162IN delivered on
23.1.2015. Now the question is whether accused has
received it. It is an undisputed fact that accused was a
tenant under the complainant for a long period. Obviously,
after the dispute started between complainant and
accused, she has vacated the premises. In fact, during the
cross-examination dated 08.01.2018, PW-1 has stated
that accused has vacated the tenanted premises four
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years back. The legal notice is stated to be delivered on
23.01.2015. When suggested that since the accused was
tenant under her, she has managed not to send back the
acknowledgement, the complainant has denied the
suggestion and stated that she has sent back the
acknowledgement.
22. Complainant has also stated that other tenant
had occupied the said premises after accused vacated it.
In fact, a suggestion is made to her that when she lodged
the complaint at Ex.P7, the accused was no longer staying
in the tenanted premises belonging to her, she has replied
that without informing her accused had vacated the
premises. Complainant has expressed ignorance to the
suggestion whether she has sent any legal notice to her
new address. Thus, the complainant has failed to prove
that before filing the complaint, she has issued legal notice
to the accused to her correct address and as she was in
control of the premises to which the legal notice was sent,
the acknowledgement is not returned to establish due
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service on the accused. Consequently, the complainant
has failed to prove that there is due service of legal notice
on the accused.
23. Now coming to the issue of financial capacity of
the complainant to invest around Rs.25 lakhs and also
advance hand loan of Rs.10 lakhs to the accused. Though
the complainant has claimed that she is owning several
tenaments and getting monthly rent of Rs.60,000/- she
has not produced any evidence to establish the said fact.
At least she could have produced documents to prove her
ownership over the said premises. She has also claimed
that she is running a sari business in Commercial Street.
Complainant has also not produced any evidence to prove
the same. According to the complainant, her husband is a
Civil Contractor and earning handsomely. To evidence this
fact also there is no documentary evidence.
24. Despite claiming that she is having substantial
income through all these, admittedly, complainant is not
an income tax assessee. She has also not produced any
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documents to prove whether her husband is also an
income tax assesee. Though the complainant has claimed
that several persons ranging from 30 to 50 were
participating in the chit transactions run by the accused,
the complainant has not chosen to examine any one of the
other participants. Except the oral and interested
testimony of complainant there is no evidence.
25. The complainant has no explanation as to why
she had left Rs.16,50,000/-, Rs.3,60,000/- and
Rs.4,95,000/- with the accused after the end of each chit
transaction. According to the complainant, she has lent
Rs.4.5 lakhs in December 2012 and Rs.5.5 lakhs in
December 2013, by which time a sum of Rs.16,50,000/-
and Rs.3,60,000/- belonging to her was still with the
accused. It does not stand to reason why would the
person of reasonable intelligence would lend hand loan to
the accused when she was still due in a substantial sum of
money and has failed to keep up her promise. Of course
the complainant has not produced any evidence to show
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that she was in possession of cash in a sum of Rs.4.5
lakhs and Rs.5.5 lakhs to lend the same to the accused.
26. It has come in the evidence that in the cross-
examination of complainant that she and accused came to
know each other while they were working in a leather
factory and they were paid Rs.3,000/- p.m. It is hard to
believe that a person having monthly income of Rs.3,000/-
would lend and receive such a substantial sum of money
by way of hand loan. Though the complainant has stated
that she is operating an account in Syndicate Bank, she
has not chosen to produce the account extract to examine
whether she was having such substantial transactions in
her account. The overall examination of her evidence
indicate that the complainant has failed to prove her
financial capacity.
27. Taking into consideration the oral and
documentary evidence placed on record, the trial Court
has come to a correct conclusion that the charge leveled
against accused is not proved and acquitted her. After re-
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appreciation of the same, this Court finds no justifiable
grounds to interfere with the said conclusions arrived at by
the trial Court. In the result, the appeal fails and
accordingly, the following:
ORDER
i) Appeal filed by the complainant under
Section 378(4) is dismissed.
ii) The impugned judgment and order dated
05.04.2018 in C.C.No.52164/2015 on the
file of LVIII 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
