Karnataka High Court
Sri H B Jayappa vs Sri Prakash Y on 4 January, 2024
1 CRL.RP NO.488 OF 2021 c/w
CRL.RP NO.485 OF 2023
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL REVISION PETITION NO.488 OF 2021
C/W
CRIMINAL REVISION PETITION NO.485 OF 2023
IN CRL.R.P.NO.488 OF 2021
BETWEEN:
SRI. H.B.JAYAPPA
S/O BENAKAPPA
AGED ABOUT 51 YEARS
R/AT NO.84, RATHNAKARA NAGAR,
3RD SUB CROSS, SAVALANGA ROAD,
SHIVAMOGGA TOWN
AND ALSO AT
ASSISTANT TEACHER
H.P.S VADEYARAPURA
ANAVERI POST
HOLEHONNURU HOBLI
BHADRAVATHI TALUK - 577 301
...APPELLANT
(BY SRI. GOPALAKRISHNAMURTHY C, ADVOCATE)
AND:
MANJUNATH. P. M.
S/O MAHESHWARAPPA
AGED ABOUT 46 YEARS
R/AT NO.126, FIRST BUILDING
ARAVIND PLAZA, 50 FEET ROAD
HANUMANTH NAGAR
BENGALURU - 560 019.
REPRESENTED BY GPA HOLDER
2 CRL.RP NO.488 OF 2021 c/w
CRL.RP NO.485 OF 2023
DHEERAJ KUMARA G S
S/O SHIVASHANKAR G
26 YEARS, R/AT NO.49/9, 9TH SUB ROAD,
MARUTHI NAGAR, ITTAMADU MAIN ROAD,
BANASHANKARI 3RD STAGE,
BENGALURU - 560 085.
......... RESPONDENT
(BY SRI. MADHUKAR NADIG, ADVOCATE)
THIS CRL.RP IS FILED UNDER SECTION 397 R/W
SECTION 401 OF CR.P.C PRAYING TO SET ASIDE THE
JUDGMENT AND ORDER PASSED BY THE XII ADDITIONAL
AND XXXVII ACMM COURT (SCCH-8) AT BENGALURU IN
C.C.NO.20752/2017 DATED 27.03.2019 AND JUDGMENT AND
ORDER OF THE LXVII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, BENGALURU (CCH-68) IN
CRL.A.NO.877/2019 DATED 03.07.2020 AND TO ALLOW THIS
PETITION FOR THE ALLEGED OFFENCE UNDER SECTION 138
OF THE NEGOTIABLE INSTRUMENTS ACT AND ACQUIT THE
PETITIONER IN THE INTEREST OF JUSTICE.
IN CRL.R.P.NO.485 OF 2023
BETWEEN:
SRI. H.B.JAYAPPA
S/O BENAKAPPA
AGED ABOUT 54 YEARS
R/AT NO.84, RATHNAKARA NAGAR,
3RD SUB CROSS, SAVALANGA ROAD,
SHIVAMOGGA TOWN
AND ALSO AT
ASSISTANT TEACHER
GLPS GUDADAMMANAHALLI VILLAGE
S K MOGGI POST
HOLEHONNUR HOBLI
BHADRAVATHI TALUK
SHIVAMOGGA DISTRICT - 577 301
...APPELLANT
(BY SRI. GOPALAKRISHNAMURTHY C, ADVOCATE)
3 CRL.RP NO.488 OF 2021 c/w
CRL.RP NO.485 OF 2023
AND:
SRI PRAKASH Y
S/O LATE YARAPPA
AGED ABOUT 39 YEARS
R/AT NO.6 SRIRANGA NILAYA
4TH CROSS, PIPELINE ROAD
MAGADI MAIN ROAD
ANJANA NAGARA
BENGALURU - 560 091
......... RESPONDENT
(BY SRI. PRATHEEP K C, ADVOCATE)
THIS CRL.RP IS FILED UNDER SECTION 397 R/W
SECTION 401 OF CR.P.C PRAYING TO a) SET ASIDE
JUDGMENT AND ORDER PASSED BY THE LV ADDL. CITY CIVIL
AND SESSIONS JUDGE, BENGALURU (CCH-56) IN
CRL.A.NO.114/2022 DATED 27.03.2023 AND TO SET ASIDE
THE JUDGMENT AND ORDER OF CONVICTION AND SENTENCE
PASSED IN C.C.NO.9967/2018 ON THE FILE OF THE XIII
ACMM, BENGALURU, DATED 12.01.2022 AND TO ALLOW THIS
PETITION FOR THE ALLEGED OFFENCE UNDER SECTION 138
OF THE NEGOTIABLE INSTRUMENTS ACT AND ACQUIT THE
PETITIONER IN THE INTEREST OF JUSTICE; b) GRANT SUCH
OTHER EQUITABLE RELIEF DEEMED FIT AND PROPER IN THE
INTEREST OF JUSTICE.
THESE CRIMINAL REVISION PETITIONS HAVING BEEN
HEARD AND RESERVED ON 15.11.2023, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE
THE FOLLOWING:
COMMON ORDER
Being aggrieved by his conviction and sentence for
the offence punishable under Section 138 of N.I.Act,
imposed by the trial Court, which came to be confirmed
by the Sessions Court, by dismissing the appeals filed by
CRL.RP NO.485 OF 2023
him, complainant has come up with these petitions under
Section 397 r/w 401 Cr.P.C.
2. Though the complainants are different and
separate trials were held, accused is common. Since the
accused has taken up a defence that at the time of
borrowing loan from one Nijalingappa, he had given four
blank cheques and utilizing two such cheques, the said
Nijalingappa has got filed two complaints in question, these
two petitions are clubbed together and disposed of by a
common order.
3. For the sake of convenience, the parties are
referred to by their ranks before the trial Court, with suffix
of their names so far as complainants are concerned
whenever necessary.
4. Complainant Prakash Y, prosecuted the accused
for the offence punishable under Section 138 of N.I Act,
contending that he and complainant are known to each
other since several years. In the first week of September
2016, accused approached the complainant Prakash Y
CRL.RP NO.485 OF 2023
requesting for hand loan of Rs.8,50,000/- agreeing to repay
the same within six months. Believing the words of the
accused, complainant Prakash Y advanced hand loan of
Rs.8,50,000/- to the accused by way of cash. However, the
accused failed to fulfill his promise and went on requesting
for time and ultimately on repeated request and demand by
the complainant Prakash Y, in the first week of August 2017,
issued a post dated 02.09.2017 cheque for Rs.8,50,000/-.
On 04.09.2017, when complainant Prakash Y presented the
cheque for realization, it was returned with an endorsement
in "Funds insufficient''. When complainant Prakash Y brought
this fact to the notice of accused, he sought for 15 days
time, but once again failed to pay the amount due. Without
any alternative, complainant Prakash Y got issued legal
notice. Instead of paying the amount due, the accused has
sent reply and hence the complaint.
5. Complainant Manjunath P.M has also pleaded
that he and accused are known to each other since several
years. During the last week of February 2016, accused
approached him with a request for hand loan of Rs.10 lakhs.
CRL.RP NO.485 OF 2023
However, he could manage to arrange only for Rs.5 lakhs
and paid the same in the second week of March 2016.
Accused promised to repay the same within six months and
ultimately on the repeated request and demand by the
complainant Manjunath P.M, in the second week of May
2017, accused issued a post dated 22.05.2017 cheque for
Rs.5 lakhs, with a promise that payment would be made.
However, when complainant Manjunath P.M presented the
subject cheque, it was returned dishonoured for "Funds
insufficient''. When, he brought this fact to the notice of
accused, he sought for 10 days time, but failed to pay the
money and without any alternative, he got issued a legal
notice. Instead of paying the amount due, accused has sent
an untenable reply and hence the complaint.
6. After due service of summons, the accused has
appeared through counsel and contested the case. He has
taken up a specific defence that he had borrowed loan from
one Nijalingappa and at that time had issued four blank
cheques. Though he has repaid the loan taken from the said
Nijalingappa by selling his immovable property, Nijalingappa
CRL.RP NO.485 OF 2023
failed to return the blank cheques demanding additional
sum. The said Nijalingappa filed complaints against the
accused utilizing one cheque and handed over remaining
two cheques to the present complainants and got filed false
complaints. Complainant Manjunath P.M is related to
Nijalingappa. The accused has taken up a specific defence
that complainants are total strangers to him and they have
no financial capacity to lend him Rs.8,50,000/- and
Rs.5,00,000/- respectively and sought for dismissal of the
complaints.
7. In order to prove the allegations against the
accused, in C.C.No.20752/2017, complainant Manjunath P.M
has examined his GPA holder Dheeraj Kumar. G S. as PW-1
and relied upon Ex.P1 to 13 (it appears by mistake the last
three documents i.e Income tax returns are marked as
Ex.P1 to 3, instead of Ex.P11 to 13).
8. In C.C.No.9967/2018, the complainant Prakash Y
has examined himself as PW-1 and relied upon Ex.P1 to 13.
CRL.RP NO.485 OF 2023
9. During the course of his statement under Section
313 Cr.P.C, the accused has denied the incriminating
evidence led by the complainant.
10. In fact, in both cases, the accused has also
stepped into the witness box by examining himself as DW-1.
11. In C.C.No.20752/2017, in support of his defence,
the accused has examined DW-2 H Yogendrappa and relied
upon Ex.D1 to 11. In C.C.No.9967/2018, no documents are
marked on behalf of accused.
12. Vide impugned judgments and orders the trial
Court as well as the Sessions Court have accepted the case
of the complainant and convicted the accused and
sentenced him to pay fine, in default to undergo
imprisonment.
13. Being aggrieved by the judgments and orders of
the trial Court as the Sessions Court, accused is before this
Court contending that the judgment and orders of the trial
Court as well as the Sessions Court are not tenable, either
in law or on facts and liable to be set aside. In the light of
CRL.RP NO.485 OF 2023
the fact that accused dispute acquaintance with the
complainants, in the absence of any evidence led by the
complainants to prove that they knew the accused since
several years, both Courts have erred in accepting the case
of the complainants. If complainant Prakash is not knowing
who is Nijalingappa, he would not have been in the
knowledge of the other complaint filed by Manjunatha in
C.C.No.20752/2017, who is the relative of Nijalingappa. In
the reply notice the accused has spelt out his defence at the
earliest available opportunity, including that the
complainants had no financial capacity to lend a huge sum
of Rs.5,00,000/- and Rs.8,50,000/-. The case of the
complainants is required to be appreciated in the light of
specific defence taken by the accused. However,
complainants have not let any evidence to prove their
financial capacity.
14. So far as C.C.No.20752/2017 is concerned, the
complainant Manjunath P.M has contended that PW-1,
Dheeraj Kumar G.S, the GPA holder of complainant is not at
all having any personal knowledge about the alleged
CRL.RP NO.485 OF 2023
transaction and therefore he is not competent to give
evidence and consequently, he has failed to prove his case.
Without appreciating the oral and documentary evidence
placed on record, the Courts below have erred in convicting
the accused and sentencing him and prays to the allow the
petition, set aside the impugned judgments and orders and
acquit accused.
15. In support of his arguments, learned counsel for
accused has relied upon the following decisions:
(i) A.C.Narayanan Vs. State of Maharashtra & Anr
(A.C.Narayanan)1
(ii) A.C.Narayanan Vs. State of Maharashtra & Anr
(A.C.Narayanan)2
(iii) Vinay Kumar Sood Vs. Bali Nagvanshi
(Vinay Kumar)3
(iv) John K.Abraham VS. Simon C.Abraham & Anr.
(John K.Abraham)4
(v) M/s Pinak Bharat and Co. Vs. Sri.Anil Ramrao
Naik and Ors. (M/s Pinak Bharat)5
AIR 2014 SC 630 Dt: 13.09.2013
AIR 2015 SC 1198 Dt: 28.01.2015
2022(4) ICC 156: 2022 ACD 644
(2014) 2 SCC 236
Crl.A.No.1630/2011 c/w Crl.A.No.1631/2011 Dt: 02.12.2022
CRL.RP NO.485 OF 2023
16. On the other hand, learned counsel representing
the complainants supported the impugned judgments and
orders of trial Court and Sessions Court and sought for
dismissal of the petitions.
17. In support of his arguments, learned counsel for
complainants has relied upon the following decisions:
(i) Kishan Rao Vs. Shankargouda (Kishan Rao)6
(ii) T.P.Murugan (dead) through Legal representatives
Vs. Bojan and Ors.7
(iii) Bir Singh Vs. Mukesh Kumar (Bir Singh)8
18. Heard arguments of both sides and perused the
record.
19. Having regard to the fact that accused admit that
the cheques in question are drawn on his account
maintained with his banker and they bear his signatures
(Although he dispute that he has issued them to the
complainants), presumption under Sections 118 and 139 of
(2018) 8 SCC 165
(2018) 8 SCC 469
(2019) 4 SCC 197
CRL.RP NO.485 OF 2023
N.I Act is attracted, to the effect that the cheques were
issued towards repayment of any legally recoverable debt or
liability. Therefore, the initial burden would be on the
accused to prove that they were not issued towards
repayment of any legally recoverable debt or liability and on
the other hand the circumstances under which the said
cheques have reached the hands of complainants.
20. However, at the same time having regard to the
fact that accused has taken up a specific defence that the
complainants are not at all known to him and the cheques
were given to one Nijalingappa and apart from filing a
complaint against the accused, the said Nijalingappa has
handed over two cheques to the present complainants and
got filed false complaints and that the complainants are not
having financial capacity to lend him the loan, as held by the
Hon'ble Supreme Court in several of its pronouncements has
held that the burden is 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.
CRL.RP NO.485 OF 2023
21. In John K.Abraham, Hon'ble Supreme Court has
held that before drawing the presumption under Sections
118 and 139 of the N.I. Act, the complainant is required to
prove that he had the requisite funds for advancing the sum
of money/loan in question to accused. The issuance of
cheque by accused in support of repayment of money
advanced was true and accused was bound to make
payment as had been agreed while issuing cheque in favour
of the complainants.
22. In Tedhi Sing Vs Narayan Das Mahant (Tedhi
Singh)9, 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, the complainant need not prove his financial
capacity. However, if during the course of trial accused takes
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, accused has issued the
subject cheque.
2022 SCC Online SC 302
CRL.RP NO.485 OF 2023
23. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)10, the Hon'ble Supreme Court
held that whenever accused raises issue of financial capacity
of complainant in support of his probable defence, despite
the presumption in favour of 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.
24. In C.C.No.20752/2017 accused has sent reply to
the legal notice. However, in C.C.No.9967/2018, he has not
sent reply to the legal notice. In both cases, he has taken up
a specific defence that complainants therein have no
financial capacity to lend him loan as alleged, apart from
denying the very transaction itself. Having regard to the fact
that in both cases the complainants have claimed that the
loan amount was paid in cash, it becomes all more
necessary for them to prove that at the relevant point of
(2020) 12 SCC 724
CRL.RP NO.485 OF 2023
time when they allegedly advanced the loan, they were in
possession of cash.
25. Though both complainants have claimed that they
know the accused since several years, accused has disputed
the said fact. However the complainants have failed to place
any material on record to show that they were knowing the
accused and with that acquaintance, they choose to lend him
hand loan and for this reason they did not insist upon any
documents to be executed in their favour, such as pronote
and other security. It creates doubt as to whether the
complainants would lend lakhs of rupees to a stranger
without insisting upon any security.
26. Although the complainants have produced IT
returns, as admitted by them, in the said returns they have
not reflected the loan given to the accused. Though these
returns state that the complainants are having certain
income, the complainants have not produced any documents
to show that at relevant point of time they were in
possession of cash to lend the same to the accused. In fact,
the complainants have not deposed as to their work or
CRL.RP NO.485 OF 2023
avocation and the income which they are deriving through
the same. Consequently, the complainants have failed to
prove that they had the financial capacity and at the
relevant point of time and they were in possession of cash to
pay the same to the accused.
27. During the course of his evidence, the accused
has deposed that he had taken loan from one Nijalingappa, a
relative of complainant Manjunatha P.M and given him four
blank cheques and though he repaid the loan taken from
Nijalingappa by selling immovable property as per Ex.D5,
demanding further sum he failed to return the cheques.
Accused has further deposed that Nijalingappa filed one
complaint against him by using one cheque and utilising two
other cheques he got filed false complaint against him
through the present complainants. As per Ex.D2 the accused
has sent legal notice to Nijalingappa. As per Ex-D1, 10 and
11 he has also filed a private complaint against the said
Nijalingappa, complainant Manjunatha and the GPA holder of
complainant Manjunatha P.M.
CRL.RP NO.485 OF 2023
28. In fact in C.C.No.20752/2017, the accused has
examined DW-2 H. Yogendrappa, Headmaster of the school
where he was working as Teacher. DW-2 H Yogendrappa has
deposed that Nijalingappa used to come to the school and
make Galata and create an ugly atmosphere and he used to
advise the accused to repay the loan taken from him and
avoid creating ugly scene in the presence of students and
colleagues and later he came to know that accused has
repaid the loan by selling his immovable property and
despite the same without returning the cheques complaints
have been filed against him.
29. One more important aspect to be noteworthy is
that the complainant Manjunatha P.M has not stepped into
the witness box. On the other hand, he has examined one
Dheeraj Kumar G.S as his Power of Attorney holder, on the
ground that the complainant Manjunatha P.M has met with
an accident and not in a position to move around. In fact,
the GPA holder of complainant Manjunatha P.M has deposed
that Manjunatha P.M has met with an accident about six
months prior to he giving evidence. Though the GPA holder
CRL.RP NO.485 OF 2023
has stated that there are documents to show that
complainant Manjunatha P.M has met with accident and he
is under treatment, no such documents are produced.
However, the examination of evidence of the said Dheeraj
Kumar G.S clearly indicates that he is not at all having any
personal knowledge about the alleged transaction. During
his cross-examination he has deposed that he was present
when the complainant paid the loan amount to the accused.
However, this fact is not at all forthcoming either in the legal
notice sent to the accused or in the complaint. It is a clear
improvement made by him during his cross-examination.
30. It is also relevant to note that in the complaint at
para No.10, it is stated that the complainant Manjunatha P.M
has suffered an injury to his leg and it is operated upon and
he is advised bed rest and therefore he is executing power
of attorney to file the complaint and prosecuted. In fact, the
complaint is filed in the name of complainant Manjunatha
P.M represented by his GPA holder and the complaint is also
signed by him, the verification is made in the name of
complainant Manjunath P.M himself. The averment at para
CRL.RP NO.485 OF 2023
No.10 of the complaint that by the time complaint was filed,
complainant Manjunath P.M was already injured, the
evidence of PW-1 that about six months prior to he giving
evidence, complainant Manjunath P.M has met with an
accident. Anyhow, fact remains that no documents are
produced to prove that on account of injury, complainant
Manjunath P.M was not in a position to move about and
therefore he is authorising his power of attorney to depose
on his behalf. This fact assumes importance that in view of
the fact that complainant Manjunatha P.M is a relative of
Nijalingappa and it appears in order to avoid cross-
examination to that effect, he has evaded to appear before
the Court and face the cross-examination.
31. Anyhow fact remains that in both cases, the
complainants have failed to prove their financial capacity. In
view of the same and the light of the ratio in the above cited
decisions, despite the presumption under Section 139 of the
N.I Act, the complainants have failed to discharge the
burden placed on them beyond reasonable doubt. On the
other hand through the oral and documentary evidence
CRL.RP NO.485 OF 2023
placed on record, the accused has established that the
cheques in question were not issued to the complainants
towards discharge of any legally recoverable debt or liability.
He has probabalised the defence taken by him.
32. Without appreciating the oral and document
evidence placed on record in the right perspective, the trial
Court as well as the Sessions Court have swayed away the
fact that there is presumption in favour of complainants and
held the accused guilty of the offence punishable under
Section 138 of N.I Act. The impugned judgments and orders
have resulted in gross miscarriage of justice and caused
manifest illegality and suffers from perversity and as such
they call for interference by this Court in exercise of
jurisdiction under Section 397 r/w 401 Cr.P.C. In the result,
both petitions deserves to be allowed and accordingly the
following:
ORDER
(i) Petitions filed by the petitioner/accused
under Section 397 r/w 401 Cr.P.C are
allowed.
CRL.RP NO.485 OF 2023
(ii) The impugned judgments and orders dated
27.03.2019 in C.C.No.20752/2017 on the
file of 12 Addl.Judge, Court of Small Causes
& 37 ACMM, Bengaluru; dated 12.01.2022
in C.C.No.9967/2018 on the file of XIII
ACMM, Bengaluru and Judgments and
orders dated 03.07.2020 in
Crl.A.No.877/2019 on the file of LXVII
Addl.City Civil and Sessions Judge,
Bengaluru; dated 27.03.2023 in
Crl.A.No.114/2022 on the file of LV
Addl.City Civil & Sessions Judge, Bengaluru
are set aside.
(iii) Consequently, the accused is acquitted for
the offence punishable under Section 138 of
N.I Act. His bail bonds stand discharged.
(iv) The Registry is directed to send trial Court
as well as Sessions Court records along with
copy of the forthwith.
Sd/-
JUDGE
RR
