Karnataka High Court
Sri M V Nataraj vs Sri H S Sanjeeva Raju on 12 January, 2024
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CRL.A No. 547 of 2018
NC: 2024:KHC:1779
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MS JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.547 OF 2018
BETWEEN:
SRI M V NATARAJ
S/O. LATE. M VISHWANATHAIAH,
AGED ABOUT 52 YEARS
RESIDING AT NO.23/6,
FIRST MAIN, KEMPANNA BROTHER'S LAYOUT,
PALACE GUTTAHALLI,
BENGALURU - 560 020
...APPELLANT
(BY SRI. VENKATARAMANA M K, ADVOCATE)
AND:
SRI H S SANJEEVA RAJU
AGED ABOUT 63 YEARS
S/O. SURYANARAYANA SHETTY,
PROPRIETOR:
Digitally SRI. VINAYAKA PLYWOOD CENTRE,
signed by NO.1326, KAVERI NAGAR, MAGADI MAIN ROAD,
REKHA R
Location: High KAMAKSHIPALYA (NEAR POLICE STATION),
Court of BENGALURU - 560 079
Karnataka
...RESPONDENT
(BY SRI. N.SRIRAM REDDY, ADVOCATE AND
SRI. RAGHUNANDAN A.R, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4) OF CR.P.C
PRAYING TO a) SET ASIDE THE JUDGMENT/ORDER OF
ACQUITTAL DATED 18.01.2018 PASSED IN C.C.NO.14340/2014
ON THE FILE OF THE XIX A.C.M.M., BENGALURU, BY ALLOWING
THE ABOVE APPEAL AND THEREBY CONVICTING THE
RESPONDENT AND b) AWARD THE COST OF THIS APPEAL AND
ANY OTHER RELIEF WHICH THIS HON'BLE COURT MAY DEEM
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FIT TO GRANT IN THE CIRCUMSTANCES OF THE CASE, IN THE
INTEREST OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR FURTHER ARGUMENTS,
THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
Being aggrieved by the dismissal of the complaint
filed by him under Section 200 Cr.P.C against the
respondent/accused for the offence punishable under
Section 138 of Negotiable Instrument (for short "N.I.
Act"), appellant who is complainant has filed 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 friends and because of this acquaintance,
accused sought financial assistance in a sum of
Rs.2,00,000/- with an assurance of repayment within
three months. Accordingly, on 24.04.2013, complainant
has advanced a sum of Rs.2,00,000/- to the accused by
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cash. In this regard he executed an on demand promissory
note and consideration receipt. However, accused failed to
repay the loan and on demand issued cheque dated
27.07.2013, with an assurance of prompt realization.
However, on presentation the cheque was dishonoured
with endorsement "Account closed". Complainant got
issued legal notice dated 21.08.2013. Despite due service,
the accused has neither paid the amount due nor sent any
reply, leading to the filing of the complaint.
4. The accused appeared before the trial Court
and contested the matter by pleading not guilty.
5. In order to prove the allegations against the
accused, complainant examined himself as PW-1 and
relied upon Ex.P.1 to 5.
6. During the course of his statement, accused has
denied the incriminating evidence.
7. Accused has examined as DW-1 and one
witness as DW-2. He got marked Ex.D.1 to 3.
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8. Vide the impugned judgment and order, the
trial Court acquitted the accused and dismissed the
complaint.
9. Being aggrieved by the same, complainant is
before this Court, contending that the impugned judgment
and order is against law, patently illegal, ex-farcies and
contrary to the material evidence and documents placed
on record. The trial Court has erred in not raising
presumption under Section 139 of the N.I.Act. The trial
Court has erred in accepting the defence of the accused
that, during 2005 he had availed loan of Rs.1,00,000/-
and had given three blank cheques and though he has
repaid the loan, the cheques were not returned and
misusing one of them, complaint is filed. The accused has
not led any evidence in support of his defence. The
testimony of DW-2 is not reliable. The trial Court has also
erred in not accepting the contention of complainant that
the credits made by accused to the account of complainant
are in respect of building materials sold by him. The
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accused has failed to rebut the statutory presumption
operating in favour of the complainant. Viewed from any
angle the impugned judgment and order are not
sustainable and pray to allow the appeal, convict the
accused and sentence him in accordance with law.
10. In support of his argument, learned counsel for
appellant has relied upon the following decisions:
(i) Uttam Ram Vs. Devinder Singh Hudan
and Anr. (Uttam Ram)1
(ii) M/s Shree Daneshwari Traders Vs.
Sanjay Jain and Anr. (Daneshwari Traders)2
(iii) K.S.Ranganatha Vs. Vittal Shetty
(K.S.Ranganatha)3
(iv) Kalamani Tex and Anr Vs. P.Balasubramanian
(Kalamani Tex)4
(v) Kishan Rao Vs. Shankargouda
(Kishan Rao)5
(2019) 10 SCC 287
AIR 2019 SC 4003
2022 (1) KCCR 1 (SC)
(2021) 5 SCC 283
2018(2) Kar.L.R 673 (SC)
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(vi) T.P.Murugan (Dead) Vs. Bojan
(T.P.Murugan)6
(vii) Rohitbhai Jivanlal Patel Vs. State of
Gujarat and Anr. (Rohitbhai Jivanlal)7
11. On the other hand, learned counsel for accused
supported the impugned judgment and order and prays to
dismiss the appeal.
12. Heard elaborate arguments of both sides and
perused the records.
13. Thus, the accused admit that the cheque in
question is drawn on his account maintained with his
banker and bear his signature. Therefore, the presumption
under Sections 118 and 139 of the N.I Act is attracted,
placing the initial burden on the accused to rebut the
same. However, the accused has taken a specific defence
that in 2005, he had borrowed a sum of Rs.1,00,000/-
from the complainant and the subject cheque along with
two other cheques were issued blank to the accused. Even
AIR 2018 SC 3601
AIR 2019 SC 1876
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though he has repaid the said loan, complainant failed to
return the said cheques and misusing one of them he has
filed the complaint. In the reply notice itself, the accused
has taken this specific defence. Therefore, burden is on
the accused to prove the same.
14. It is pertinent to note that in the reply notice
the accused has not challenged the financial capacity of
complainant. In Tedhi Sing Vs Narayan Das Mahant
(Tedhi Singh)8, the Hon'ble Supreme Court held that
when the accused has failed to send reply to the legal
notice, challenging the financial capacity of the
complainant, at first instance, complainant need not prove
his financial capacity. However, if during the course of trial
accused takes up such a defence, then it is necessary for
the complainant to prove his financial capacity, when he
allegedly advanced the amount and that towards
repayment of the same, accused has issued the cheque. In
APS Forex vs Shakti International Fashion Linkers Pvt. Ltd
2022 SCC OnLine SC 302
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(APS Forex)9, the Hon'ble Supreme Court held that
whenever accused rises issue of financial capacity of
complainant, in support of his probable defence, despite
presumption in favour of the complainant regarding legally
enforceable debt under Section 139 of N.I Act, 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.
Keeping in mind the ratio in the above decisions, it is
necessary to appreciate the facts.
15. It is relevant to note that the cheque in
question is dishonoured on the ground that "Account is
closed". In Laxmi Dyechem Vs the State of Gujarat and
others (Laxmi Dyechem)10, the Hon'ble Supreme Court
after examining various grounds on which cheques may be
dishonoured, held that even a dishonour of cheque on the
ground of account closed is also covered by provisions of
Section 138 of N.I Act and attracts penal liability, unless
(2020) 12 SCC 724
(2012) 13 SCC 375
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the accused prove that the closure of the account was on
account of operation of law, accused has not let any
evidence to demonstrate that the closure of the account
was not at his instance and therefore this Court is of the
considered opinion that the penal liability under Section
138 of N.I Act is attracted.
16. In order to demonstrate that earlier he had
taken loan from the complainant and at that time he had
issued three blank cheques and despite repaying the said
loan with interest, complainant failed to return the
cheques, in addition to giving evidence on oath, the
accused has relied upon Ex.D2 passbook of his account in
Canara Bank and account statement at Ex.D3 of his
account in Bank of Baroda. As per the entries in these
documents, the accused has made several payments into
the account of complainant. When questioned and
suggestions were made on this aspect, the complainant
has not denied the said suggestions and refrained from
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giving definite answers by stating that he needs to look
into the account extract.
17. During his cross-examination dated
25.11.2016, at Page No.2 the complainant has specifically
stated that except the present loan he has not advanced
any hand loan to the accused. Again, at page 3, he has
reiterated the same. However, during the cross-
examination of the accused, complainant has made a
suggestion to him that the payments made by him to the
complainant as per Ex.2 and 3 are in respect of
construction material purchased by him from the
complainant. Of course accused has denied the said
suggestion. The complainant has not produced any
documents to show that accused had made credit
purchase from him.
18. Though the accused has claimed that he has
filed income tax returns, as admitted by him in the said
returns, the fact of lending Rs.2 lakhs to the accused is
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not reflected. The accused has examined DW-2 Raju
stated to be his employee to prove that he had earlier
availed loan of Rs.1,00,000/- and repaid the same, but
complainant failed to return the blank cheques. Having
regard to his age, it is doubtful whether DW-2 is still
working in the shop of the accused. Anyhow, through the
document evidence placed on record coupled with his
testimony, the accused has proved that he had earlier
transaction with the accused and probablised his defence
that the cheque in question was issued blank as a security
for the earlier transaction.
19. As noted earlier, accused is also disputing the
financial capacity of the complainant. In this regard the
complainant has deposed that every month he is having
income of Rs.30,000 to 50,000. Except his self-serving
statement, there is no evidence placed on record to prove
the same. Even the income tax returns are also not
produced, which would have been of some assistance to
prove his financial capacity. Complainant has deposed that
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at the time of advancing loan of Rs.2 lakhs, accused
executed a demand promissory note and consideration
receipt, and after issuing the subject cheque, he took back
those two documents. However, as admitted by him this
fact is not forthcoming in the legal notice as well as the
complaint. It is clearly an improvement. He has also
claimed that one Chandrashekar was a witness to the
demand pronote. However, Chandrashekar is also not
examined to speak about the loan transaction. When
suggested that the Cheque is not in the handwriting of the
accused, though at the first instance, complainant has
denied the said suggestion, later on has claimed that it is
in the handwriting of the person who accompanied the
accused.
20. The examination of oral and documentary
evidence placed on record makes it evident that the
complainant has failed to prove his financial capacity. On
the other hand through preponderance of probability, the
accused has proved that earlier he had availed loan of
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Rs.1,00,000/- from the complainant and had issued some
blank cheques and misusing one such cheque, he has filed
the present complaint. Examining the oral and
documentary evidence placed on record by both parties, in
the right perspective, the trial Court has come to a correct
conclusion that complainant has failed to prove the
allegations against accused beyond reasonable doubt. On
the other hand, the accused has proved his defence and
accordingly acquitted him. After appreciation of the oral
and documentary evidence placed on record, 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:
ORDER
(i) Appeal filed by the complainant under
Section 378(4) of Cr.P.C is dismissed.
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(ii) Consequently, the judgment and order dated
18.01.2018 in C.C.No.14340/2014 on the
file of XIX ACMM, Bengaluru, is confirmed.
(iii) The Registry is directed to send back the
trial Court record along with copy of this
order forthwith.
Sd/-
JUDGE
RR
