Karnataka High Court
Sri P R Sarveshwar Reddy vs Sri A Somashekar Reddy on 27 May, 2024
1 CRL.A NO.405 OF 2018
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.405 OF 2018
BETWEEN:
SRI. P R SARVESHWAR REDDY
S/O REDDAPPA REDDY,
AGED ABOUT 58 YEARS,
R/AT NO.39/15, 7TH MAIN ROAD,
GANESHA BLOCK, MAHALAKSHMI LAYOUT,
BENGALURU - 560 073
......APPELLANT
(BY SRI. PRAVEEN C P, ADVOCATE)
AND:
SRI A SOMASHEKAR REDDY
S/O DASAREDDIGARI ANJANEYA REDDY,
RESIDING AT NO.635, 9TH CROSS ROAD,
3RD BLOCK, HMT LAYOUT,
NAGASANDRA POST,
BENGALURU - 560 073
.......RESPONDENT
(BY SRI. D.NAGARAJA REDDY, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
DATED 01.01.2018 PASSED BY THE LEARNED LXII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-63),
BENGALURU IN CRL.A.NO.464/2016 AND CONFIRM THE
JUDGMENT DATED 15.03.2016 PASSED BY THE LEARNED XIII
ADDITIONAL CHIEF METROPOLITAN MAGISTRATE,
BANGALORE IN C.C.NO.2836/2014 FOR THE OFFENCE
PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE
INSTRUMENTS ACT, BY ALLOWING THIS APPEAL IN THE
INTEREST OF JUSTICE AND EQUITY.
2 CRL.A NO.405 OF 2018
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
04.03.2024, 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 acquittal of
respondent/accused, by the Sessions Court by reversing
the conviction imposed by the trial Court, for the offence
punishable under Section 138 of Negotiable Instruments
Act, 1881 (for short 'N.I. Act').
2. For the sake of convenience, parties are
referred to by their rank before the trial Court.
3. Complainant filed the complaint under Section
200 of Cr.P.C against the accused alleging that he and
accused are known to each other since long time as a
good friends. In order to meet his financial crisis in the
business and for construction of house, during April 2013
accused approached the complainant for financial
assistance of Rs.7.5 lakhs as hand loan. He promised to
repay the same within 10 days. Complainant being a good
friend paid a sum of Rs.7.5 lakhs to the accused in the
first week of May 2013 in cash and accused acknowledge
the same. After lapse of 10 days, complainant requested
the accused to return the money. Accused pleaded his
inability and requested for two more days and issued post
dated 15.05.2013 cheque with an assurance of
encashment on presentation. Accordingly complainant
presented the cheque through his banker. To his shock
and surprise, it was returned dishonoured on 24.05.2013
for reason "Account is dormant''. In this regard he got
issued legal notice dated 31.05.2013 through RPAD. It is
duly served on the accused. Iinstead of paying the
amount due, the accused has sent an evasive reply dated
14.06.2013. Without any alternative complaint is filed.
4. Accused appeared before the trial Court and
contested the case by pleading not guilty.
5. In order to prove the allegations against
accused, complainant has examined himself as PW-1 and
relied upon Ex.P1 to 14.
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. In fact, accused has stepped into the witness
box and examined himself as DW-1. He has relied upon
Ex.D1 to 9.
8. The trial Court accepted the contention of the
complainant and convicted the accused.
9. Accused challenged the same before the
Session Court.
10. Vide the impugned judgment and order, the
Sessions Court has allowed the appeal, set aside the
order of conviction passed by the trial Court and acquitted
the accused.
11. Aggrieved by the same, complainant is before
this Court contending that judgment and order are illegal,
unlawful, unreasonable and without application of judicial
mind. The learned Sessions Judge has failed to appreciate
that the complainant has proved the allegations against
accused and he is having a very good case on merit. It
has failed to appreciate the oral and documentary
evidence placed on record in right perspective. All the
essential ingredients under Section 138 of N.I Act are
complied with by the complainant. The accused has failed
to rebut the presumption under Section 139 of N.I Act. In
the light of the presumption and also the oral and
documentary evidence placed on record, the complainant
has proved the allegations against accused.
11.1 The trial Court has convicted accused,
appreciating the oral and documentary evidence placed
on record. However, the Sessions Court is not justified in
interfering with the well reasoned judgment and order of
the trial Court. Viewed from any angle, the impugned
judgment and order are not tenable and pray to allow the
appeal, set aside the judgment and order of the Sessions
Court and restore the judgment and order of the trial
Court.
12. On the other hand, learned counsel for accused
has supported the impugned judgment and order and
sought for dismissal of the appeal. He would submit that
one Doreswami Reddy was a close relative of complainant
i.e the brother of complainant had married the daughter
of Peddappa Reddy - the son of the Doreswami Reddy.
Doreswami Reddy and Peddappa Reddy were having fleet
of lorries. Complainant purchased a second hand lorry
from Peddappa Reddy for Rs.1,40,000/- and issued two
blank signed cheques. He paid Rs.1,00,000/-. Before he
could pay the balance, the lorry met with an accident and
therefore Peddappa Reddy exempted him from paying the
balance, but went on postponing returning the blank
cheques. After the death of Peddappa Reddy, misusing
one such cheque, complainant has filed this complaint and
through his brother-in-law filed another complaint utilising
the second cheque. Through the oral and documentary
evidence placed on record, the accused has proved his
defence. On the other hand, the complainant has failed to
prove allegations against accused, including his financial
capacity to lend Rs.7.5 lakhs to the accused. Appreciating
the oral and documentary evidence placed on record
rightly the Sessions Court has set aside the conviction
imposed by the trial Court and pray to dismiss the appeal
also.
13. In support of his arguments, learned counsel
for accused has relied upon the following decisions:
(i) C. Antony Vs. K.G.Raghavan Nair (C.Antony)1
(ii) John K. John Vs. Tom Varghese and Anr.
(John K. John)2
(iii) Sanjay Mishra Vs. Kanishka Kappor @ Nikki
(Sanjay Mishra)3
(iv) John K. Abraham Vs. Simon C.Abraham and
Anr. (John K.Abraham)4
(v) K.Subramani Vs. K.Damodara Naidu
(K.Subramani)5
(vi) Basalingappa Vs. Mudibasappa
(Basalingappa)6
14. Heard elaborate arguments of both sides and
perused the record.
2003 SCC(Cri) 161
2007 (12) SCC 714
2009 Crl.L.J 3777
2014(2) SCC 236
2015 (1) Crimies (SC) 48
2019(5)SCC 418
15. 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.
16. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)7, 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
(2014) 2 SCC 236
(iii) The accused was bound to make payment
as had been agreed while issuing cheque in
favour of the complainant.
17. In Tedhi Singh Vs Narayan Das Mahant (Tedhi
Singh)8, the Hon'ble Supreme Court held that where the
accused has failed to send reply to the legal notice,
challenging the financial capacity of the complainant or in
the reply notice has not challenged 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.
18. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)9, 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
2022 SCC OnLine SC 302
(2020) 12 SCC 724
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.
19. In Vijay Vs. Laxman and Anr (Vijay)10,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)11
and K.Prakashan Vs. P.K.Surenderan (K.Prakashan)12,
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.
20. Similarly, in Basalingappa, referred to supra
the Hon'ble Supreme Court reiterated that the
presumption under Section 139 of N.I Act is a rebuttable
presumption and initial burden is on the accused to rebut
the presumption after which the burden would shift on the
complainant to prove his case.
(2013) 3 SCC 86
(2015) 1 SCC 99
(2008) 1 SCC 258
21. Keeping the ratio in the above decisions in
mind, it is necessary to examine whether the complainant
has proved that in the first week of May 2013 he had the
capacity to advance Rs.7.5 lakhs to the accused and the
subject cheque was issued by the accused towards
repayment of the same. On the other hand, it is for the
accused to establish by preponderance of probability that
he issued two blank signed cheques, including the subject
cheque to Peddappa Reddy in connection with purchase of
a lorry and after the death of Peddappa Reddy, utilising
the said cheques, the present complaint and another
complaint was filed against him and there was never a
loan transaction between him and complainant.
22. According to the complaint averments, accused
requested for hand loan of Rs.7.5 lakhs in the second
week of April 2013 and complainant paid the said sum in
the first week of May 2013. In order to prove the source,
the complainant has deposed that, earlier he was having
three lorry and getting income by way of transportation
charges. He is also having two premises which he rented
out and gets income of Rs.20,000 per month. In order to
prove that he has paid a sum of Rs.7.5 lakhs to the
accused, the complainant has relied upon Ex.P9
statement of his account. As per this document, on
10.04.2013, he has received loan of Rs.5 lakhs from
Janatha Co-operative Bank. He has withdrawn Rs.4 lakhs
on 02.05.2013 and Rs.3,25,000/- on 03.05.2013. Though
not stated in specific terms, by producing this document,
the complainant has indirectly claimed that this sum was
paid to the accused by way of hand loan.
23. According to the complainant, in the second
week of April itself, the accused had requested for hand
loan of Rs.7.5 lakhs and he has withdrawn the said sum
on second and third of May 2013 in order to pay to the
accused. Nothing prevented the complainant from
transferring the said amount to the account of accused
instead of withdrawing cash and paying the same and
thereby incurring the risk of establishing the same.
Moreover, it does not appeal to reason that complainant
would borrow money from the Co-operative Bank on
interest and pay the same to the accused without any
interest. It is the definite case of complainant that
accused had promised to repay the amount within 10
days. If at all the accused was in a position to repay the
amount within 10 days, what was the urgency for him to
borrow such huge amount. If really, he wants to get
substantial amount from elsewhere within a period of 10
days, he could have very well waited for 10 more days.
24. During his cross-examination, the complainant
has stated that he paid the amount in question to the
accused at his residence and at that time, his wife was
present in the house. However, he is not ready to
examine her. Similarly, the complainant has taken a
specific defence that the portion of amount in question
was received by him from several contractors to whom he
had supplied building material. In unequivocal terms,
complainant has deposed that he is not ready to examine
them.
25. On the other hand, during the course of
evidence, the accused has reitreated that the subject
cheque and another cheque was given by him blank to
Peddappa Reddy in connection with purchase of a lorry.
He has produced the B- Register Extract at Ex.D5. He has
also produced the copy of the FIR and charge sheet
regarding the accident involving the said lorry at Ex.D6
and 7. The accused has also produced account extract of
his wife to show that he had advanced a sum of Rs.3
lakhs to the complainant at the time of marriage of his
daughter, which fact is admitted by the complainant. The
accused has also produced his account extract at Ex.D9 to
show that he has borrowed loan from the bank for
construction purpose and as per this document, during
2014 in all a sum of Rs.35 lakhs is credited to his account
by way of loan.
26. It is the definite case of the accused that the
subject cheque and another cheque were issued blank by
him. Except his signatures, the rest of the contents were
blank. On the other hand, the complainant has claimed
that when the subject cheque was given to him by the
accused, it was completely filled. However, the subject
cheque clearly indicate that the signature of the accused
and rest of the writing are in different ink and
handwriting. Even though a blank signed cheque also
attract the presumption under Section 139 of the N.I Act,
when the accused has taken up a specific defence that, it
was given blank to somebody else and utilised by the
accused, the difference in the handwriting and ink
assumes importance.
27. This aspect is considered by the Hon'ble
Supreme Court in C Antony, referred to supra wherein it
is held that when complainant claimed that the entire
document is in the handwriting of accused, these
differences would certainly affect credibility of his case. In
the present case also, the accused has specifically
contented that he had issued signed blank cheque and
therefore difference in the writing with the signature of
accused and also the ink used would corroborate with the
defence taken by him.
28. In John K. John referred to supra, while
examining the conduct of the complainant in not getting
supporting documents for the alleged loan granted, the
Hon'ble Supreme Court held that it is not the conduct of a
prudent man. In the present case also, the complainant
has not chosen to get any supporting documents. At least
he could have been safe by paying the loan amount
through account transfer, especially when he has
withdrawn the amount from his account for the purpose
of handing over the same to the accused.
29. Similarly, in Sanjay Mishra, referred to supra
the Hon'ble Supreme Court took exception to the conduct
of the complainant in not showing the fact of advancing
hand loan to the accused in his Income tax returns. In the
present case also, the complainant has not chosen to
show the hand loan of Rs.7.5 lakhs allegedly given to the
accused in his income tax return which would have helped
to prove his case.
30. The trial Court without examining the oral and
documentary evidence placed on record in right
perspective and only on the basis of withdraw of amount
from the account of the complainant has come to the
conclusion that he has proved the loan transaction.
However, it has failed to appreciate the defence taken by
the accused in the light of evidence led by him. The
findings of the trial Court are contrary to the evidence
placed on record and therefore perverse. However, the
Sessions Court on re-appreciation of the evidence placed
on record has come to a correct conclusion that the
accused has successfully rebutted presumption under
Section 139 of N.I Act and on the other hand, the
complainant has failed to prove the allegations against
accused beyond reasonable doubt and acquitted him.
31. On the re-appreciation of the entire material
placed on record, this Court finds no justifiable grounds to
interfere with the findings of the Session 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 dated
01.01.2018 in Crl.A.No.464/2016 on the
file of LXII Addl.City Civil and Sessions
Court, Bengaluru, acquitting the accused,
by reversing the judgment and order
dated 15.03.2016 in C.C.No.2836/2014 on
the file of XIII ACMM, Bengaluru, is
confirmed.
(iii) The Registry is directed to send back the
trial Court as well as Sessions Court
records along with copy of this judgment
forthwith.
Sd/-
JUDGE
RR
