Karnataka High Court
Sri. A V Krishnamurthy vs Sri. S Venkatesh on 5 January, 2024
1 CRL.RP NO.447 OF 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF JANUARY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL REVISION PETITION NO.447 OF 2020
BETWEEN:
SRI. A V KRISHNAMURTHY
S/O A VEERABHADRAIAH
AGED ABOUT 47 YEARS,
R/AT NO.77/B, 2ND MAIN ROAD,
MICO LAYOUT, NEAR SHANKAR MUTT
WEST OF CHORD ROAD,
BANGALORE NORTH
MAHALAKSHMIPURAM LAYOUT
BENGALURU - 560 086
W/AT M/S BOSCH LTD.,
GRADE/GROUP-G08
EMPLOYEE NO.30732119
POST BOX NO.3000
HOSUR ROAD, AUDUGODI
BENGALURU - 560 030
...PETITIONER
(BY SRI. A.V.KRISHNA MURTHY, PARTY-IN-PERSON)
AND:
SRI. S VENKATESH
S/O LATE S SUBBA RAO
AGED ABOUT 50 YEARS,
R/AT NO.808 CHANNASANDRA
KENGERI MAIN ROAD
RAJARAJESHWARI NAGAR
BENGALURU - 560 098
.....RESPONDENT
(BY SRI. S.R.MURALIDHAR, ADVOCATE)
2 CRL.RP NO.447 OF 2020
THIS CRL.RP IS FILED UNDER SECTION 397 R/W 401 OF
CR.P.C PRAYING TO SET ASIDE THE ORDER OF CONVICTION
DATED 11.12.2017 PASSED IN C.C.NO.12015/2016 ON THE
FILE OF XXII A.C.M.M., BENGALURU CITY AND ALSO SET
ASIDE THE ORDERS DATED 27.01.2020 BY THE LI
ADDITIONAL CITY CIVIL AND SESSIONS COURT (CCH-52)
AND C/C OF LVIII ADDITIONAL CITY CIVIL AND SESSIONS
COURT (CCH-59) IN DISMISSING THE CRIMINAL APPEAL
BEARING NO.34/2018, BENGALURU CITY, PENDING
DISPOSAL OF THE ABOVE REVIEW PETITION, IN THE
INTEREST OF JUSTICE.
THIS CRIMINAL REVISION PETITION HAVING BEEN
HEARD AND RESERVED ON 20.11.2023, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE
THE FOLLOWING:
ORDER
This is a petition filed by accused, challenging his
conviction and sentence for the offence punishable under
Section 138 of the N.I Act imposed by the trial Court,
which came to be confirmed by the Session Court by
dismissing the appeal filed by him.
2. For the sake of convenience, the parties are
referred to by their rank before the trial Court.
3. Complainant filed a complaint under Section
200 Cr.P.C against the accused alleging offence
punishable under Section 138 of N.I Act, contending that
accused is related to the wife of complainant and they
know each other since several years. Accused was in the
habit of taking financial assistance from the complainant
for short terms and return the same. Similarly, during
February 2016, accused requested for a hand loan of
Rs.25 lakhs stating that the house loan taken by him is
overdue and he would repay the same by making
alternative arrangement within 10.04.2016. Considering
the relationship and the urgency pleaded by the accused,
complainant advanced hand loan of Rs.25 lakhs. When
accused failed to keep up his promise, on 10.04.2016, on
the request of complainant, accused issued cheque dated
12.04.2016 with a promise that it would be honoured.
However, when complainant presented on the same day,
it was dishonoured on the ground "Funds insufficient''.
When complainant called accused, he did not pick up his
phone. Hence, complainant got issued a legal notice to
the accused. Instead of paying the amount due under the
cheque, the accused has sent an evasive reply and hence
the complaint.
4. After due service of summons, accused has
appeared through the counsel and resisted the
complaint, contenting that he never borrowed any loan
from the complainant and on the other hand he has
financially helped the complainant. On one occassion,
when he was in need of some financial assistance,
complainant promised to get it from one Ganesh, who is
running a finance and at that time got from him four
blank cheques and also number of promissory notes.
However, the promised loan was not provided and even
though he tried to lodge a complaint, the concerned
police failed to register the case. The accused has alleged
that misusing one such cheque, the complainant has filed
a false complaint. The accused has specifically contended
that complainant is not at all having any financial
capacity to lend huge sum of Rs.25 lakhs and sought for
dismissal of the complaint.
5. In order to prove the allegations against the
accused, complainant has examined himself as PW-1 and
his wife as PW-2. He has relied upon Ex.P1 to12 .
6. During the course of his statement under
Section 313 Cr.P.C, the accused has denied the
incriminating evidence brought on record by the
complainant.
7. In fact, he has stepped into the witness box
by examining himself as DW-1 and relied upon Ex.P1 to
30.
8. Vide the impugned judgment and order, the
trial Court convicted the accused and sentenced him to
pay a fine of Rs.25 lakhs in default to undergo simple
imprisonment for six months.
9. Aggrieved by the same, the accused
approached the Session Court in appeal. However, vide
the impugned judgment and order the Sessions Court
dismissed the appeal filed by him and thereby confirmed
the judgment and order of the trial Court.
10. Being aggrieved by the same, accused is
before this Court, contending that both Courts below
have failed to consider the fact that accused has not
availed hand loan of Rs.25 lakhs from the complainant at
any point of time. They have also failed to consider that
complainant has failed to prove the transaction between
the complainant and accused. The complainant has failed
to prove the financial capacity of complainant to advance
huge loan of Rs.25 lakhs. The Courts below have also
failed to appreciate that the cheque in question was
given blank. Except his signature, the rest of the writing
in the cheque is not in the handwriting of accused. In the
absence of proof of financial capacity, by the
complainant, both Courts have erred in drawing
presumption under Section 139 of the N.I Act. The oral
and documentary evidence placed on record are not
appreciated by the Courts below in their proper
perspective and thereby fell into error in convicting the
accused and prays to allow the petition and acquit him.
11. Though initially accused appeared through
counsel, later on he retired from the case. Accused
argued the case on his own refusing to take any legal
assistance. The accused has also filed written arguments.
12. On the other hand, learned counsel for
complainant has supported the impugned judgments and
orders and sought for dismissal of the petition.
13. Heard arguments of both sides and perused
the record.
14. Thus, accused admit the fact that the cheque
in question is drawn on his account maintained with his
banker and it bears his signature. However, he has taken
up a defence that complainant and one Ganesh took
blank signed cheques from him under the pretext of said
Ganesha providing him loan of Rs.6 lakhs. In the light of
the fact that the cheque in question is drawn on the
account of accused maintained with his banker,
presumption under Section 118 and 139 of N.I. Act is
attracted, wherein the Court required to presume that
the cheque was issued towards repayment of any legally
recoverable debt or liability and the initial burden would
be on the accused to rebut the presumption and prove
that the cheque was not issued towards repayment of
any legally recoverable debt or liability and on the other
hand to prove the circumstances in which the cheque has
reached the hands of accused. If the accused is able to
rebut the presumption, then the burden would shift on
the complainant to improve his case. Of course it is
sufficient for the accused to discharge the burden placed
on him by preponderance of probability, whereas it is for
the complainant to prove his case beyond reasonable
doubt.
15. At the same time having regard to the fact
that the accused has disputed the financial capacity of
the accused to lend huge sum of Rs.25 lakhs, as held by
the Hon'ble Supreme Court in Tedhi Sing Vs Narayan Das
Mahant (Tedhi Singh)1, where the accused has not sent
reply to the legal notice, challenging the financial
capacity, 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
2022 SCC OnLine SC 302
capacity when he allegedly advance the amount and
towards repayment of it, accused issued the cheque.
16. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)2 also, 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
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. In the light
of the above decisions, the burden would be on the
complainant to prove his financial capacity.
17. Before examining whether the complainant
had financial capacity to lend a huge sum of Rs.25 lakhs,
it is necessary to examine whether the accused had any
legal necessity of borrowing loan. Though, during the
course of evidence, the accused has taken up a defence
(2020) 12 SCC 724
that it is the complainant who was in need of money and
he was the one who was helping him, the evidence
placed on record is otherwise. It is not in dispute that
accused and the wife of complainant are relatives. In the
complaint itself, the complainant has pleaded that
accused was in the habit of taking financial assistance
from him and repay the same. Ex.D25 is the account
extract of the accused with the Bangalore City Co-
operative Bank Ltd, wherein he has been sanctioned
housing loan of Rs.50 lakhs and accused has admitted
this fact. Ex.P11 is the copy of award passed by the
arbitrator in respect of dispute raised by Surabhi Chits
Ltd against accused and others. Ex.P11 is the order of
attachment passed by the Registrar of Chits against
accused at the instance of Margadarsi chits.
18. Ex.D26 to 29 are the order sheet, plaint,
verifying affidavit of complainant, application filed under
Order 39 Rule 1 and 2 of CPC, verifying affidavit of
complainant in O.S.No.3746/2017. These documents
clearly prove the fact that at the relevant point of time,
accused was in need of loan for constructing house and
therefore he has availed loan from several banks, chit
fund agencies etc. Though the accused has produced
Ex.D1 to 13, 24 challans and Ex.D14 to 16 passbooks to
show that he has credited money to the account of
complainant on several occasions, claiming that it is the
complainant who availed financial assistance from him,
having regard to the fact that accused has been granted
loan of Rs.50 lakhs and also he has incurred financial
liability from chit fund institutions, it is doubtful whether
accused was in a position to lend any loan or give
financial assistance to the complainant.
19. On the other hand, these documents support
the contention of complainant that earlier to the present
transaction, accused was in the habit of borrowing loan
from him and repay promptly. Thus through the
documents produced by the complainant as well as the
very documents produced by the accused, it is proved
that accused was in need of financial assistance for
constructing his house and in that regard he has availed
loan from several financial agencies and also made
several payments to the complainant prior to 2016.
20. Now coming to the question whether the
complainant has proved his financial capacity to lend a
huge sum of Rs.25 lakhs. At the outset, it is relevant to
note that in the complaint, the complainant has
specifically pleaded that accused having become
defaulter in repaying the loan taken from the Bank,
during February 2016 approached him for financial
assistance and borrowed a sum of Rs.25 lakhs. During
his examination-in-chief also he has reiterated the said
fact. However, he has produced Ex.P1 a pronote dated
14.02.2016, claiming that while borrowing Rs.25 lakhs
the accused has executed this document. Similarly, the
complainant has produced Ex.P2 stated to be a letter
given by the accused stating that he has received loan of
Rs.21,50,000/- and he would clear the same by
31.03.2016 and that there is balance of Rs.3,42,000/-
which he also undertakes to pay. In the complaint there
is no reference to these documents. It is his definite
case that Ex.P3 cheque is the only document which the
accused has issued towards repayment of loan of Rs.25
lakhs taken from him. During his cross-examination, the
complainant has deposed that he paid Rs.24,42,000/-.
21. So far as the financial capacity of the
complainant to lend the money in question i.e the source
through which he could get Rs.25 lakhs, in his affidavit
evidence, the complainant has stated that at that time he
was supposed to undergo hip replacement surgery and
for the said purpose, he had arranged for the said
amount and looking to the urgency pleaded by the
accused and relying upon promise made by him that he
would repay it, at the earliest, he lent the said sum to
the accused. However, during his cross-examination,
complainant has deposed that the money advanced to
the accused was given to him by his cousin Srinivas
during the second week of December 2015. He had taken
the said money from Srinivas by executing an
agreement, but he is not having any document to
evidence the said fact. He has also deposed that Srinivas
had sold his family property and got the money. When
questioned whether he is ready to examine Srinivas to
prove that he received the money from him, complainant
has answered in the negative.
22. Thus, from the evidence placed on record, it is
evident that the complainant was not having cash of his
own. On the other hand, he had allegedly borrowed the
same from his cousin Srinivas by executing some
document. In turn, the Srinivas had received the said
amount by selling his property. The least complainant
could have done was examine his cousin Srinivas and
would have produced the copy of the Sale deed to prove
that he was in fact in receipt of Rs.25 lakhs and he paid
the same to the accused to meet his exigency. The
complainant has also admitted that he has not shown in
his income tax returns the fact of having advanced hand
loan of Rs.25 lakhs to the accused.
23. In support of his case, the complainant has
examined his wife, Smt. Asha Rani as PW-2. She has
deposed that at the time when her husband paid Rs.25
lakhs to the accused, she was present. It is pertinent to
note that during the course of the complaint averments
the complainant has not averred that his wife Asha Rani
was present when he paid Rs.25 lakhs to the accused.
Even during his examination-in-chief, the complainant
has not deposed regarding the presence of his wife when
the deal took place. During his cross-examination, for the
first time he has stated that his wife was present when
accused received the sum of Rs.25 lakhs from him. In
the absence of pleadings to that effect, the claim of the
complainant regarding presence of his wife is doubtful.
24. In addition to examining his wife, it would
have been appropriate for the complainant to examine
Srinivas to prove that he was in receipt of Rs.25 lakhs
which he has paid to the accused. Thus, from the above
discussion, this Court has no hesitation to hold that the
complainant has failed to prove his financial capacity to
lend a sum of Rs.25 lakhs in cash to the accused.
Moreover, Ex.P1 and 2 are contrary to the contents of
Ex.P3 cheque based on which the accused is being
prosecuted for the offence punishable under Section 138
of N.I Act. It does not reflect the amount due from the
accused. When the accused has failed to prove his
financial capacity, in the light of the decision of the
Hon'ble Supreme Court Tedhi Sing Vs Narayan Das
Mahant (Tedhi Singh)3 and APS Forex vs Shakti
International Fashion Linkers Pvt. Ltd (APS Forex)4, the
burden would not shift on the accused to prove his
defence. Only after the accused has taken up a defence
that the complainant and Ganesh took his signatures to
blank cheques and other blank documents, complainant
has chosen to produce Ex.P1 and 2 which are contrary to
the contents of Ex.P3 cheque.
25. In the absence of complainant establishing his
financial capacity, through the documentary evidence
placed on record, the accused has probabalised his
defence.
26. The trial Court, instead of examining whether
the complainant has proved his financial capacity, has
2022 SCC OnLine SC 302
(2020) 12 SCC 724
critically examined the defence set forth by the accused
and held that there is no consistency and that he has
created a false story. Similarly, the Session Court also
held that the accused has failed to prove his defence.
Both Courts on the basis of presumption under Sections
118 and 139 of N.I Act have held that the accused has
failed to rebut the presumption and without examining
the financial capacity of the complainant have proceeded
to convict the accused. The findings of the trial Court as
well as the Sessions Court are not only perverse, but also
caused gross miscarriage of justice, calling for
interference by this Court. In the result, the petition
succeeds and accordingly the following:
ORDER
(i) Petition filed by the petitioner under
Section 397 r/w 401 Cr.P.C is allowed.
(ii) The impugned judgment and order dated
11.12.2017 in C.C.No.12015/2016 on the
file of XXII ACMM, Bengaluru and judgment
and order dated 27.01.2020 in
Crl.A.No.34/2018 on the file of LVIII
Addl.City Civil and 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 bond stand discharged.
(iv) The Registry is directed to send back the
trial Court as well as Sessions Court
records along with copy of this order
forthwith.
Sd/-
JUDGE
RR
