Karnataka High Court
M Shivamallegowda vs C Kemparaju on 27 May, 2024
1 CRL.A NO.1541 OF 2021
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.1541 OF 2021
BETWEEN:
M. SHIVAMALLEGOWDA
S/O LATE B MALLEGOWDA
AGED ABOUT 57 YEARS
R/O B G DODDI VILLAGE
THELLANURU POST
KOLLEGAL TALUK - 84
......APPELLANT
(BY SRI. RAGHAVENDRA GOWDA K, ADVOCATE FOR
SRI. MOHANKUMARA D, ADVOCATE)
AND:
C KEMPARAJU
S/O CHIKKAMARIGOWDA
AGED ABOUT 50 YEARS,
PROPRIETOR MARUTHI TRADERS
NAMASTHE GARMENTS
OPPOSITE NEXUS GARMENTS
BANNERUGHATTA ROAD,
BENGALURU - 76
......RESPONDENT
(BY SRI. G.K.VENKATA REDDY, ADVOCATE FOR
SRI. PARAMESHWAR N HEGDE, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER OF
ACQUITTAL DATED 14.02.2022 PASSED BY THE LEARNED
ADDITIONAL DISTRICT AND SESSIONS JUDGE,
CHAMARAJANAGARA (SITTING AT KOLLEGALA) IN
CRL.A.NO.5002/2018 FOR THE OFFENCES PUNISHABLE
UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT, IN
THE INTEREST OF JUSTICE AND EQUITY.
2 CRL.A NO.1541 OF 2021
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON
12.03.2024, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
JUDGMENT
This is complainant's appeal filed under Section
378(4) of Cr.P.C, challenging the acquittal of
respondent/accused for the offence punishable under
Section 138 of Negotiable Instruments Act, 1881 (for
short 'N.I Act').
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 known to each other very well. On
10.09.2012, accused availed hand loan of Rs.1,15,000/-
to meet his business requirement. On the same day, he
issued post dated 10.10.2012 cheque for Rs.1,15,000/-.
He promised that the amount would be paid on or before
the said date. However, complainant failed to keep up
the promise and directed the complainant to present the
cheque and realise the amount. Accordingly, complainant
presented the cheque for encashment on 10.10.2012. It
was returned dishonoured on 11.10.2012 with
endorsement "Account closed". In this regard
complainant got issued legal notice. It is served on the
accused. Instead of paying the amount due, the accused
has sent an invasive reply and hence the complaint.
4. The accused has appeared before the trial
Court and contested the matter by pleading not guilty.
5. In order to prove the allegation against
accused, the complainant has examined himself as PW-1
and one witness as PW-2. He has relied upon Ex.P1 to 6.
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, the accused has also stepped into the
witness box and examined himself as DW-1. He has also
examined Manager of the drawer bank as DW-2. He has
relied upon Ex.D1 and 2.
8. Vide the impugned judgment and order the
trial Court convicted the accused.
9. Accused challenged his conviction before the
Sessions Court.
10. Vide the impugned judgment and order the
Sessions Court allowed the appeal and set aside the
conviction.
11. Aggrieved by the same, the complainant has
filed appeal, contending that the Sessions Court has
completely ignored the provisions of N.I Act by wrongly
holding that the bank memo is re-dated as 30.10.2012 in
the place of 11.10.2012 to suit the convenience of the
complainant. The Sessions Court has lost sight of the
fact that the cheque in question is dated 10.10.2012 and
on presentation for the second time which in the period
of its validity, it was dishonoured as per memo dated
30.10.2012. Therefore, the observation of the Sessions
Court that to suit the convenience of complainant, the
endorsement dated 30.10.2012 is secured. For this
reason also, the observation of the Session Court that
the legal notice was issued beyond the period of 30 days
from the date of dishonour is also erroneous. The
impugned judgment and order is also contrary to law,
facts and probabilities of the case and calls for
interference by this Court.
12. In support of his arguments, learned counsel
for complainant has relied upon the following decisions:
(i) Rajesh Jain Vs. Ajay Singh (Rajesh Jain)1
(ii) Shylaja K.N Vs. Thippeswamy (Shylaja)2
(iii) H.B.Bhagyalakshmi Vs. Cheluvamma
(H.B.Bhagyalakshmi)
13. On the other hand, the learned counsel for
accused has supported the impugned judgment and
order and submitted that during the second week of
September 2009, accused borrowed a sum of
Rs.15,000/- from the complainant and on the
instructions of complainant issued a cheque for
Rs.15,000/- specifying the amount only in figure. Though
AIR 2023 SC 5018: 2023 LiveLaw (SC) 866
he repaid the said amount, accused failed to return the
cheque and using the same, he has filed the present
complaint. He would further submit that the accused has
challenged the financial capacity of complainant, which
he has failed to establish and taking into consideration
the entire evidence on record, the Session Court has
rightly reversed the judgment and order of the trial
Court and acquitted the accused and sought for dismissal
of the appeal.
14. In support of his arguments, he has relied
upon the decision in Prem Chand Vijay Kumar Vs.
Yashpal Singh and Anr. (Prem Chand Vijay Kumari)4
15. Heard elaborate arguments of both sides and
perused the record.
16. The fact that complainant and accused are
known to each other and they are also distant relatives is
not in dispute. The accused admit the fact that the
subject cheque belongs to him, drawn on his account
(2005) 4 SC 417
maintained with his banker and it bears his signature.
Therefore, presumption under Section 118 and 139 of
the N.I Act comes into operation in favour of the
complainant that the subject cheque was issued towards
repayment of any legally recoverable debt or liability,
placing the initial burden on the accused to rebut the
same by proving that the cheque was not issued towards
repayment of any legally recoverable debt or liability, but
on the other hand, establish the circumstances in which
it has reached the hands of the complainant.
17. In John K.Abraham Vs. Simon C. Abraham &
Anr (John K.Abraham)5, 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.
18. As held by the Hon'ble Supreme Court in Tedhi
Singh Vs Narayan Das Mahant (Tedhi Singh)6, where the
accused 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. In the present case
though the accused has sent reply to the legal notice, he
has not challenged the financial capacity of complainant.
But, at the trial he has done so.
19. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)7, 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
2022 SCC OnLine SC 302
(2020) 12 SCC 724
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.
20. In Vijay Vs. Laxman and Anr (Vijay)8,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)9 and
K.Prakashan Vs. P.K.Surenderan (K.Prakashan)10, 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.
21. The subject cheque at Ex.P1 which is drawn
on Vijaya Bank is dated 10.10.2012. According to the
complainant, it was presented to the Bank through his
account in Syndicate Bank on the same day i.e.,
10.10.2012. As per Ex.P2, it was returned dishonoured
(2013) 3 SCC 86
(2015) 1 SCC 99
(2008) 1 SCC 258
by the Vijaya Bank as per Ex.P2 dated 11.10.2012. In
turn the Syndicate Bank has forwarded the said memo
with the endorsement of the Manager on 30.10.2012. As
per Ex.P3, the complainant has sent legal notice on
20.11.2012. The accused has alleged that as per
provisions (b) of Section 138 of N.I Act, complainant is
required to send the legal notice within 30 days from the
date of receipt of information from the Bank and the
information regarding dishonour of cheque was received
on 11.10.2012 itself. In order to overcome the limitation
of 30 days, complainant has got the endorsement dated
30.10.2012 and therefore the complaint is not
maintainable.
21.1 Though during the arguments such a
submission was made, in the cross- examination of PW-
2, who is the Manager of Syndicate Bank, no suggestions
are made. Except making a suggestion that without
verifying the records, endorsement is given, the accused
has not chosen to draw the attention of PW-2 to Ex.P2
and the endorsement therein. Therefore, in the absence
of evidence to the contrary, this Court is left with no
other alternative, but to accept that Syndicate Bank has
forwarded to the complainant the endorsement received
from Vijaya bank on 30.10.2012 and from the said date
the legal notice dated 20.11.2012 is within the period of
limitation of 30 days.
22. Having regard to the fact that in the reply
notice itself, the accused has denied the transaction
between him and the complainant and at the trial he has
also disputed the financial capacity of the complainant, in
the light of the ratio in the above decisions, despite the
presumption under Section 139 of the N.I Act, the initial
burden is on the complainant to prove that he had the
financial capacity to lend Rs.1,15,000/- to the accused.
This fact is to be appreciated in the light of evidence
produced by the accused on record that, at the relevant
point of time when he allegedly borrowed Rs.1,15,000/-
from the complainant, he had sufficient amount in his
account. As held in APS Forex only after the
complainant prove his financial capacity, the burden
would shift on the accused to prove his defence.
23. Challenging his financial capacity, the accused
has questioned the complainant as to whether he is
having any documents to show that as on 10.09.2012,
he was in possession of Rs.1,15,000/-. Complainant has
replied that he has not produced any such documents,
but volunteered and stated that he is a contractor and
normally he keeps cash in his house for his business
purpose. He has stated that he is an income tax
assessee, but in his income tax returns, he has not
reflected the fact of advancing hand loan of
Rs.1,15,000/- to the accused. He has also conceded that
neither in the legal notice nor in the complaint, he has
disclosed the source of income for advancing the said
amount to the accused.
24. However, during the cross- examination of
accused, a suggestion is made that complainant is
having 10 and odd acres of land. Though accused has
admitted the said suggestion, he has expressed
ignorance that complainant is having income from the
said lands. Except the oral assertion, the complainant
has not produced any documents to show that at the
relevant point of time, he had the financial capacity to
lend Rs.1,15,000/- to the accused. The complainant has
failed to prove that as on 10.09.2012, he had the
financial capacity to lend a sum of Rs.1,15,000/- to the
accused. Consequently, the burden has not shifted on
the accused to rebut the presumption under Section 139
of the N.I Act.
25. The accused has taken up a specific defence
that Account No.130406011000013 on which the cheque
at Ex.P1 is drawn was not closed, but it was changed
into Account No.1304062111000014. To prove this
aspect, accused has examined DW-2 H.S.Nagesh
Manager of the Vijaya Bank. He has deposed that earlier
from 01.04.2008 to 02.12.2010 accused was having CCM
Account No.130406011000013. Later on the CCM
accounts were closed and they were converted into CCH
account and accordingly at present accused is having
Account No.1304062111000014. It is a transfer from
one scheme to the other and as such technically, it
cannot be said that the earlier account was closed. He
has also deposed that as on 10.10.2012, the accused
was having withdrawable balance of Rs.5 lakhs.
26. Ex.D1 is the statement of account of the
accused with respect to Account No.1304062111000014
for the period from 01.04.2012 to 31.03.2013, which
covers the date 10.09.2012 when the complainant has
allegedly lent Rs.1,15,000/-. As per Ex.D1 throughout
the said period, the accused has maintained an average
of Rs.9 lakhs in his account. Such being the case, it is
doubtful, whether when he himself is having sufficient
amount in his account, accused would need financial
assistance from the complainant. It is also a
circumstance which creates doubt as to the veracity of
the case of the complainant.
27. Thus, not only the complainant has failed to
prove his financial capacity, but also accused has
rebutted the presumption by proving that at the relevant
point of time, he was in possession of sufficient amount
in his account and thereby created a doubt whether
Ex.P1 was issued for repayment of Rs.1,15,000/- or it
was issued at an earlier point of time. The fact that the
subject cheque pertains to his earlier account, which
came to be converted into CCH account subsequent to
02.12.2010 also probabilises the defence of the accused
that it was issued during 2009 for a sum of Rs.15,000/-.
28. The trial Court without examining the
evidence led by both parties in right perspective has
erroneously come to the conclusion that the allegations
against accused are proved and convicted him. On re-
appreciation of the evidence, the Session Court has
rightly reversed the same. This Court finds no justifiable
grounds to interfere with the conclusions arrived at by
the Sessions 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
14.02.2020 in Crl.A.No.5002/2018 on the
file of Addl.District and Sessions Judge,
Chamarajanagar (Sitting at Kollegal),
reversing the judgment and order of
conviction dated 04.04.2018 in
C.C.No.432/2013 on the file of Prl.Civil
Judge and JMFC, Kollegal, is hereby
confirmed.
(iii) The Registry is directed to send back the
trial Court records as well as Sessions
Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
