Karnataka High Court
Between vs Shiva Kumar V/S B V Keshav Murthy on 27 May, 2024
1 CRL.A NO.155 OF 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.155 OF 2015
BETWEEN:
V S SHIVA KUMAR
S/O LATE V.T.SURAPPA,
AGED ABOUT 49 YEARS,
R/O NO.20/1, HONURAPPA LANE,
SIDDANNAGHALLI CROSS,
CUBBONPET, BENGALURU - 560 001
......APPELLANT
(BY SRI. BHARATH KUMAR V, ADVOCATE)
AND:
B V KESHAV MURTHY
S/O B VENU GOPAL,
AGED ABOUT 48 YEARS,
R/O NO.639, 1ST FLOOR,
11TH CROSS, 7TH BLOCK,
JAYANAGAR, BENGALURU - 560 082.
.......RESPONDENT
(BY SRI. HARISH H V, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO a) SET ASIDE THE JUDGMENT
DATED 09.12.2014 PASSED BY THE HON'BLE XV ADDL. CHIEF
METROPOLITAN MAGISTRATE, BENGALURU, IN
C.C.NO.32930/2011 (ANNEXURE-A); CONSEQUENTLY,
CONVICT THE RESPONDENT HEREIN FOR THE OFFENCES
UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS
ACT BY IMPOSING A FINE TO THE TUNE OF DOUBLE THE
CHEQUE AMOUNT AND TO IMPOSE A SENTENCE OF 2 YEARS
IMPRISONMENT; c) DIRECT THE OFFICE TO PAY THE AMOUNT
SO COLLECTED AS FINE TO BE PAID TO THE COMPLAINANT
HEREIN AS COMPENSATION; d) PASS ANY SUCH ORDER/S AS
MAY BE JUST IN THE BEST INTEREST OF JUSTICE.
2 CRL.A NO.155 OF 2015
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
26.03.2024, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
This appeal filed under Section 378 (4) of Cr.P.C is by
the complainant challenging the acquittal of
respondent/accused for the offence punishable under Section
138 of Negotiable Instruments Act, 1881 (for short 'N.I. Act')
by the trial Court.
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. It is the case of the complainant that he and
accused are known to each other since several years. In
the second week of November 2009, accused approached
the complainant for a hand loan of Rs.12 lakhs, to
discharge his liabilities and also to develop his business.
He promised to repay the same within one year.
Believing the words of accused, complainant arranged
and paid Rs.12 lakhs to the accused in cash in the third
week of December 2009. After lapse of one year,
complainant requested the accused to repay the amount.
Accused issued cheque dated 22.12.2010 with the
promise of prompt payment. However, on 20.12.2010,
accused requested the complainant to present the
cheque in the month of March 2011. Accordingly,
complainant presented the cheque on 12.03.2011.
However, it was returned unpaid for insufficient funds.
Complainant got issued legal notice dated 17.03.2011. It
is returned with endorsement "Not claimed". However,
accused has neither paid the amount due under the
cheque nor sent any reply and hence the complaint.
4. After due service of summons, accused
appeared through counsel and contested the case. He
pleaded not guilty and claimed trial.
5. In order to prove the allegations against
accused, complainant got examined himself as PW-1 and
relied upon Ex.P1 to 5.
6. During the course of his statement under
Section 313 Cr.P.C, the accused has denied the
incriminating evidence led by the complainant.
7. Accused has led defence evidence by
examining himself as a DW-1. He has relied upon Ex.D1
to 3.
8. Vide the impugned judgment and order the
trial Court acquitted the accused.
9. Aggrieved by the same, complainant has filed
this appeal, contending that the impugned judgment and
order is opposed to the settled principles of law and liable
to be set. The trial Court has erred in considering the
financial capacity of the complainant, which was never
the subject matter of contention and it is irrelevant. The
trial Court has failed to rise presumption under Section
139 of the N.I Act and thereby not considered the ratio of
the Hon'ble Supreme Court in Rangappa Vs Shri Mohan
(Rangappa)1. The trial Court has erred in shifting the
initial burden on the complainant, which is against the
(2010) 11 SCC 441
mandate in Rangappa. Viewed from any angle, the
impugned judgment and order are not sustainable and
pray to allow the appeal, set aside the impugned
judgment and order, convict the accused and sentence
him in accordance with law.
10. However, learned counsel for accused
supported the impugned judgment and order of the trial
Court and submitted that through the evidence led by
him, the accused has proved his defence that the cheque
in question was issued blank by the accused by way of
security to the Chit Fund transaction of complainant with
Panchajanya Chits Private Limited and misusing the
same, the complainant has filed this complaint to make
unlawful gain. Incidentally, the complainant has failed to
prove his financial capacity and rightly the trial Court has
dismissed the complaint and pray to dismiss the appeal
also.
11. Heard elaborate arguments of both sides and
perused the record.
12. At the outset it is relevant to note that while
the complainant claim that intentionally, the accused has
not received the legal notice, the accused has pleaded
that the complainant has managed to see that the legal
notice is not served on him. Ex.P3 is the office copy the
legal notice. It is addressed to the accused to the same
address as given in the complaint. Accused has not
disputed his address given in the complaint. The
summons sent to the accused to the said address is
returned with endorsement that his mother informed that
accused is not coming to the house and he may be
staying in his mother-in-law's house.
12.1 On the next occasion, the father of accused
has stated that accused has gone out, but he has refused
to receive the summons and therefore it is affixed on the
house. Therefore, the trial Court was pleased to issue
Non-bailable warrant against the accused, after which he
has appeared and secured bail. When registered post is
sent to the correct address of the accused by pre-paying,
under Section 27 of the General Clauses Act, it is
presumed to have been served and when the postman
has delivered intimation and accused has failed to collect
the same, it is presumed that intentionally he has not
received the notice and therefore under Section 27 of the
general clauses act, it is held to be duly served.
13. Accused admit that the cheque in question
belongs to him, drawn on his account maintained with his
banker and that it bears his signature. Of course, it is his
specific defence that he has not borrowed any loan from
the complainant and the subject cheque was given by
way of security for the complainant with regard to his
transaction with Panchajanya Chits Pvt Ltd and misusing
the same, he has filed this complaint.
14. Having regard to the fact that the cheque in
question belongs to accused drawn on his account
maintained with his banker and it bears his signature,
presumption under Section 139 of the N.I Act is operating
in favour of the complainant, placing the initial burden on
the accused to prove that the cheque was not issued
towards repayment of any debt or liability and on the other
hand to establish the circumstances in which the cheque
has reached the hands of the complainant.
15. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)2, 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.
16. Though the accused has not sent reply notice,
during the trial he has challenged his financial capacity. As
held by the Hon'ble Supreme Court in Tedhi Singh Vs
Narayan Das Mahant (Tedhi Singh)3, where the accused
(2014) 2 SCC 236
2022 SCC OnLine SC 302
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, at the trial if the financial capacity of
complainant is challenged, then it is for the complainant to
prove the same.
17. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)4, the Hon'ble Supreme Court
held that when accused raises issue of financial capacity of
complainant, in support of his probable defence, despite
presumption operating 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.
18. In Vijay Vs. Laxman and Anr (Vijay)5,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)6 and
(2020) 12 SCC 724
(2013) 3 SCC 86
(2015) 1 SCC 99
K.Prakashan Vs. P.K.Surenderan (K.Prakashan)7, also the
Hon'ble Supreme Court held that the presumption under
Section 139 of N.I. Act, is a rebuttable presumption and
when accused rebut the same by preponderance of
probabilities, it is for the complainant to prove his case
beyond reasonable doubt including the financial capacity.
19. Keeping the ratio in the above decisions in mind,
it is necessary to examine whether the complainant has
proved that he has advanced hand loan of Rs.12 lakhs to
the accused in the third week of December 2009. In the
light of cross-examination of the complainant, it is evident
that at the trial the accused has challenged his financial
capacity and therefore, it is necessary for the complainant
to prove that at the relevant point of time he was in a
position to lend the said amount to the accused in cash.
20. On this aspect, during his cross-examination,
the complainant has stated that he is not having any
documents to show that he lent Rs.12 lakhs to the
accused. Though he is an Income Tax assessee, in the
(2008) 1 SCC 258
returns for the relevant period, the fact of having lent
Rs.12 lakhs to the accused is not reflected in them. He
also admitted that there was no impediment for him to
get a promissory note or other document from the
complainant and also to pay the amount to the accused
through cheque. Despite the accused challenging the
financial capacity of the complainant and cross-
examining him at length, he has not chosen to produce
any documentary evidence to prove that he was having
Rs.12 lakhs in cash and he lent the same to the accused.
21. On the other hand, through the cross-
examination of complainant, the accused has proved that
complainant was a subscriber to the chits with
Panchajanya Pvt. Ltd and in November 2009, he had bid
chit for Rs.4 lakhs, which was supposed to repaid at the
rate of Rs.25,000/- p.m and after about 12-14 months,
he became a defaulter. He has also admitted that for the
said transaction, accused was a surety for him and in this
regard LIC bond of accused was kept with the
Panchjanya chits and for default committed by the
complainant, the said bond was forfeited and the amount
due under the bond was realized. However, he has
denied that for the said chit transaction, accused had
issued the subject cheque in a blank form, except his
signature and misusing the same the present complaint
is filed.
22. In order to prove that the subject cheque was
issued blank, the accused has specifically contended that
except the signature, the rest of the writing in Ex.P1 is
not in his handwriting. In fact from the perusal of Ex.P1,
it is evident that the signature of the accused and the
rest of the writing are in different ink and handwriting.
The accused has made a specific suggestion that Ex.P1 is
filled by the complainant himself which he has denied.
During his cross-examination, in the open Court on the
directions of the counsel for the accused, on a blank
paper, the complainant has written his name and Rupees
Twelve lakhs in words. The said sheet of paper is marked
as Ex.D1. From a mere look into the writing in Ex.D1 and
on comparison with the said writing in Ex.P1, it is quite
evident that both of them are in the handwriting of one
and the same person.
23. In order to disprove the fact that the writing in
Ex.P1 is not in his handwriting, the complainant has not
chosen to send the admitted and disputed documents for
comparison and opinion of handwriting expert. The fact
that except the signature, the rest of the writing in Ex.P1
is not in the handwriting of accused also support his
defence that it was given in a blank form by way of
security to the chit transaction of complainant.
24. In fact, Ex.D3 is the letter given by
Panchajanya Chits Private Ltd to the accused stating that
the LIC bond which she had assigned to them towards
the chit account dues of complainant Shivakumar was
surrendered to the LIC and the amount due under the
policy has been received and adjusted towards the dues
from the complainant and now there are no dues from
him. Ex.D2 is the letter given by the LIC of India stating
that a sum of Rs.1,18,500/- towards principal and
Rs.8,414/- towards interest has been realized out of the
the LIC bond pertaining to accused and as no dues were
there, the bond is being returned to the accused.
25. Ex.D2 and 3 coupled with the admission given
by the complainant prove that accused had stood as a
guarantor to the complainant and for the amount due
from him, the LIC policy of accused was attached and
amount was realized. Though the complainant has denied
that Ex.P1 was also given by accused by way of security
to the said transaction, the fact that it was given blank
probalise the defence of the accused. At the same time,
the complainant has also failed to prove that he had the
financial capacity to lend Rs.12 lakhs and in fact has lent
the same to the accused.
26. During the course of evidence, the accused
has reiterated the defence taken by him. Except eliciting
that in Ex.D2 and 3, Ex.P1 is stated to have been issued
by way of security, the complainant has not challenged
the evidence of accused. Taking into consideration the
oral and documentary evidence placed on record, the
trial Court has come to a correct conclusion that the
allegations against accused are not proved and the
complainant has also failed to prove his financial capacity
and has rightly acquitted the accused. 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.
(ii) The impugned judgment and order in
C.C.No.32930/2011 on the file of XV
ACMM, Bengaluru is here by confirmed.
(iii) The Registry is directed to send back the
trial Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
