Karnataka High Court
Shivaraj vs Smt H R Sowmya on 27 May, 2024
1 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
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.333 OF 2016
C/W
CRIMINAL APPEAL NO.334 OF 2016
IN CRL.A NO.333 OF 2016
BETWEEN:
SHIVARAJ
S/O LATE N APPANASHETTY
AGED ABOUT 47 YEARS
R/O 1ST CROSS, SUBASH NAGAR
ARSIKERE TOWN
HASSAN DISTRICT - 573 103
......APPELLANT
(BY SRI. SIDDHARTH B MUCHANDI, ADVOCATE)
AND:
SMT. H R SOWMYA
W/O SANJAY
R/A YELE REVEANNA BUILDING
5TH CROSS, SUBASH NAGAR
BEHIND MUNICIPAL GUESTHOUSE
ARSIKERE, HASSAN DISTRICT-573103
.....RESPONDENT
(BY SRI. SADASHIVAIAH K G, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER OF ACQUITTAL DATED 04.02.2016 IN
C.C.NO.117/2014 PASSED BY THE SENIOR CIVIL JUDGE AND
JMFC, ARASIKERE AND CONVICT THE
RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT
AND COMPENSATE THE APPELLANT/COMPLAINANT
2 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
ADEQUATELY UNDER SECTION 357 OF THE CODE OF
CRIMINAL PROCEDURE, TO MEET THE ENDS OF JUSTICE.
IN CRL.A NO.334 OF 2016
BETWEEN:
SHIVARAJ
S/O LATE N APPANASHETTY
AGED ABOUT 47 YEARS
R/O 1ST CROSS, SUBASH NAGAR
ARSIKERE TOWN
HASSAN DISTRICT - 573 103
......APPELLANT
(BY SRI. SIDDHARTH B MUCHANDI, ADVOCATE)
AND:
SMT. H R SOWMYA
W/O SANJAY
R/A YELE REVEANNA BUILDING
5TH CROSS, SUBASH NAGAR
BEHIND MUNICIPAL GUESTHOUSE
ARSIKERE, HASSAN DISTRICT-573103
.....RESPONDENT
(BY SRI. SADASHIVAIAH K G, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT
AND ORDER OF ACQUITTAL DATED 04.02.2016 IN
C.C.NO.161/2014 PASSED BY THE SENIOR CIVIL JUDGE AND
JMFC, ARASIKERE AND CONVICT THE
RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE
UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT
AND COMPENSATE THE APPELLANT/COMPLAINANT
ADEQUATELY UNDER SECTION 357 OF THE CODE OF
CRIMINAL PROCEDURE, TO MEET THE ENDS OF JUSTICE.
THESE APPEALS HAVING BEEN HEARD AND RESERVED
ON 13.03.2024, COMING ON FOR PRONOUNCEMENT OF
JUDGMENT THIS DAY, THE COURT DELIVERED THE
FOLLOWING:
3 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
COMMON JUDGMENT
Being aggrieved by the dismissal of complaints filed
by him against the respondent/accused for the offence
punishable under Section 138 of Negotiable Instruments
Act, 1881 (for short 'N.I. Act'), complainant has filed
these appeals under Section 378 (4) of Cr.P.C.
2. Since parties to these appeals are common
and the facts based on which complaints were filed and
the defence taken by the accused are common, these
two appeals are clubbed together and decided by a
common order.
3. For the sake of convenience, parties are
referred to by their rank before the trial Court.
4. It is the case of the complainant that
complainant and accused are family friends. For a legal
necessity, accused has borrowed in all a sum of Rs.9
lakhs from the complainant as detailed below:
4 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
Date Bank Name Cheque Amount
No.
03.03.2010 Vijaya Bank, 811015 2,00,000
Arasikere
03.03.2010 -do- 811014 2,00,000
03.03.2010 -do- 811013 2,00,000
03.03.2010 -do- 811016 2,00,000
03.03.2011 -do- 811028 1,00,000
5. Accused agreed to pay the interest at 18%
per annum. She also agreed to repay the amount as and
when demanded. In fact, on 28.01.2012 and
28.03.2012, accused has paid interest in a sum of
Rs.36,000/- each through her husband. Except
Rs.72,000/- the accused has not paid either the principal
amount or the interest. She was due in a sum of
Rs.16,38,000/- towards principal and interest as on
23.12.2013. Ultimately, on repeated request and
demand, accused has issued cheque dated 23.12.2013
for Rs.8,38,000/- and cheque dated 24.12.2013 for a
sum of Rs.8 lakhs. Accused assured that payment would
be made on presentation of these cheques.
6. Accordingly, complainant presented the
cheques on 23.12.2013 and 24.12.2013, i.e., on the
5 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
respective days of the cheques. However, they were
returned dishonoured with endorsement "Funds
insufficient". Complainant brought this fact to the notice
of accused. However, she did not choose to pay the
amount due under the cheques. Without any alternative
complaint got issued legal notice dated 30.12.2013. It is
served on the accused on 31.12.2013. Despite due
service of notice, the accused has neither paid the
amount due nor sent any reply and therefore separate
complaints are filed in respect of individual cheques in
C.C.No.117/2014 and C.C.No.161/2014.
7. After due service of summons, accused
appeared before the trial Court and contested the
matters by pleading not guilty.
8. In order to prove the allegations against
accused, in both cases complainant has examined
himself as PW-1.
9. In C.C.No.117/2014, the complainant has
relied upon Ex.P1 to 6.
6 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
10. In C.C.No.161/2014, the complainant has
relied upon Ex.P1 to 12, which includes 6 RTC extract in
respect of lands owned by the complainant.
11. During the course of her statement under
Section 313 Cr.P.C, the accused has denied the
incriminating evidence led by the complainant.
12. However, the accused has not chosen to lead
any defence evidence.
13. Vide separate judgments and orders
impugned in these appeals, the complainant has
challenged the same contending that the same are
illegal, improper and suffers from serious legal
infirmities. Re-appreciation of the entire evidence is
essentially required to prevent miscarriage of justice.
The trial Court has not appreciated the basic ingredients
of Section 138 of N.I Act and the presumption under
Section 139 of N.I Act. Complainant has advanced hand
loan to the accused through cheques and the said act is
proved through the account extract of his account at
7 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
Ex.P6. Despite the same, the trial Court has committed
grave error in holding that the complainant has no
financial capacity to lend the same to the accused.
14. Though the accused has claimed that the
cheques in question were issued as a security to the loan
borrowed by her husband from the complainant, she has
not led any evidence. She has not sent reply to the legal
notice received from the complainant. In the light of the
fact that cheques belongs to the accused, drawn on her
account maintained with the banker and bears her
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 otherwise. This
aspect is not appreciated by the trial Court. The reasons
assigned for dismissing the complaint are not
sustainable, especially in the light of several judgments
of the Hon'ble Supreme Court. Viewed from any angle,
the impugned judgments and orders are not tenable and
pray to allow the appeal, convict the accused and
sentence her in accordance with law.
8 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
15. In support of his arguments, learned counsel
for complainant has relied upon the following decisions:
(i) Uttam Ram Vs. Devinder Singh Hudan
(Uttam Ram)1
(ii) Bir Singh Vs. Mukesh Kumar (Bir Singh)2
(iii) Rajesh Prasad Mittal Vs. Manish 3Garg
(Rajesh Prasad Mittal)
16. On the other hand, learned counsel for
accused has supported the impugned judgments and
order and sought for dismissal of the appeals also.
17. Heard elaborate arguments of both sides and
perused the record.
18. Thus, it is the definite case of the complainant
that accused borrowed in all a sum of Rs.9 lakhs
agreeing to repay the same with interest at 18% per
annum. Except 2 payments of Rs.36,000/- each, the
accused has failed to pay the balance together with
interest. As on 23.12.2013, a total sum of
1
(2019) 10 SCC 287
2
(2019) 4 SCC 197
3
2023 SCC Online Del 6574
9 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
Rs.16,38,000/- was due towards principal and interest
and payment of the same, accused issued cheque for
Rs.8,38,000/- and another cheque for Rs.8 lakhs.
However, when they were presented for realization, they
were returned unpaid for want of sufficient funds and
therefore, after issuing legal notice and on failure of the
accused to comply with the same two separate
complaints are filed.
19. Accused admit the fact that the cheques in
question belongs to her, drawn on her account
maintained with her banker and they bear her signature.
Therefore, as held in Uttam Ram, Bir Singh and
Rajesh Prasad Mittal and catena of other judgments,
presumption under Section 139 of the N.I Act to the
effect that the cheques are issued towards repayment of
any legally recoverable debt or liability comes into
picture, placing the initial burden on the accused to
prove that they were not issued towards repayment of
any legally recoverable debt or liability and prove the
10 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
circumstances in which the cheques have reached the
hands of complainant.
20. At the outset it is relevant to note that despite
due service of notice, the accused has not sent any reply
to the legal notice. As held the Hon'ble Supreme Court in
C.C. Alavi Haji Vs. Palapetty Muhammed and Anr. (Alavi
Haji)4, the object of issue of legal notice is to enable an
honest drawer of the cheque to make payment of the
amount due under the cheques and escape from the
ignominy of undergoing criminal trial. However, in the
reply notice, incidentally, the accused may spell out his
defence and the circumstances in which according to
him, the cheques came to be issued or have reached the
hands of complainant. At the trial, the accused by
making certain suggestions has taken up a specific
defence and it is necessary to examine whether the
accused has succeeded in establishing the said defence,
at least by preponderance of probability.
4
(2007) 6 SCC 555
11 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
21. The accused has challenged financial capacity
of complainant by questioning as to what is his source of
income. He has deposed that he is having garden land
measuring 9 acres, and getting income of Rs.10 lakhs
per year. He is running Montessori at Arasikere by name
Kids Zee and he is also a reporter of Uday TV. In fact in
C.C.No.161/2014, the complainant has produced RTC
extracts standing in his name. Undisputedly the payment
of Rs.9 lakhs by the complainant to the accused is
through his account vide cheque Nos.811016, 811015,
811014, 811013 and 811028. When these payments are
made through bank transfer, question of doubting the
financial capacity of the complainant would not arise.
Only when he had the requisite funds in his account, he
is able to transfer them to accused. Such being the case,
the trial Court has committed a grave error in holding
that complainant has not proved his financial capacity.
22. A suggestion is made to PW-1 that through
these entries, payments have been made by the accused
to the account of complainant, which is prima facie
12 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
incorrect. After payment made through these cheques,
the respective amount is debited from the account of the
complainant. Accused has totally denied that she has
borrowed a sum of Rs.9 lakhs from the complainant.
Certainly, she is not claiming discharge. Such being the
case, it is preposterous to suggest that as per these
entries accused has made payments to the complainant.
23. A suggestion is also made to the complainant
that it is the husband of the accused who has borrowed
loan from the complainant and accused has issued the
subject cheques by way of security. Except the
suggestion made to the complainant, no evidence is led
by the accused to prove that the loan in question or for
that matter any loan was borrowed by her husband and
she has issued the cheques by way of security. In the
absence of pleading and proof, the accused has
miserably failed to prove that the loan was borrowed by
her husband and she has issued the cheques by way of
security.
13 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
24. Even otherwise, as held by the Hon'ble
Supreme Court in Sunil Todi Vs. State of Gujarath (Sunil
Todi)5, merely labelling a cheque as security would not
obviate its character as an instrument designed to meet
legally enforceable, debt or liability. Once agreement
between parties provided for which money is due and
payable, cheque furnished as a security is covered under
the provisions of Section 138 of N.I Act. In ICDS Ltd Vs.
Beena Shabeer and Anr (ICDS Ltd)6, which was a case
wherein husband of the accused availed loan based on
hire purchase agreement to purchase a car with
complainant and the cheque was issued by accused as a
guarantor, the Hon'ble Supreme Court held that even
cheque issued by the guarantor is covered under the
provisions of Section 138 of the N.I Act. A suggestion is
made to PW-1 that the husband of accused has repaid
the loan taken by him and inspite of it, utilising the
cheques given by the accused false complaints have
been filed. The accused has not led any evidence to
prove that her husband has paid any amount to the
5
AIR 2022 SC 147
6
(2002) 6 SCC 426
14 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
complainant to claim discharge. Of course, in the present
case, the accused has failed to prove that the loan was
taken by her husband and she has issued the subject
cheques by way of security.
25. It is elicited through the cross-examination of
complainant that he has filed a number of similar
complaints against others. He has denied the suggestion
that he is indulging money lending business without
obtaining necessary license. In the account statement
also, there are several entries through which several
sums have been paid to different persons. On that basis,
the trial Court has come to the conclusion that
complainant is habitually involved in lending money
without possessing valid license and therefore
disbelieved his case.
26. First of all the defence has failed to prove that
the payments made by the complainant to several
persons as reflected in the account extract is towards
money lending. If at all the complainant is habitually
involved in money landing, then he may be liable under
15 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
the Karnataka Money Lending Act or other provisions.
The accused cannot claim benefit for the same and
escape from the liability arising out of dishonour of the
subject cheques.
27. The trial Court has dismissed the complaint
also on the ground that the loan sought to be paid
through the subject cheques is barred by limitation. It is
pertinent to note that during the course of cross-
examination of PW-1, no such suggestions are made to
that effect. The complainant has taken up specific plea
that accused has paid a sum of Rs.36,000/- each on
28.01.2012 and 28.03.2012. No suggestion is made to
the complainant that no such payments have been made
by the accused. According to the complainant, in all a
sum of Rs.9 lakhs was advanced to the accused in five
instalments i.e Rs.2 lakhs each in four instalments and
the last of the payment of Rs.1,00,000/- was made on
03.02.2011. The subject cheques are dated 23.12.2013
and 24.12.2013. The legal notice was issued on
30.12.2013. In the light of the evidence placed on
16 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
record, the complaint filed is well within the period of
limitation. Therefore, the trial Court has committed a
grave error in holding that the complaints are barred by
limitation.
28. Thus, from the above discussion, this Court is
of the considered opinion that the accused has failed to
rebut the presumption arising under Section 139 of N.I
Act. On the other hand through the oral and
documentary evidence placed on record the complainant
has proved the allegations against accused beyond
reasonable doubt. The findings of the trial Court is
contrary to the evidence placed on record and as such
perverse and as such calls for interference by this Court.
29. When the Court comes to the conclusion that
the charge levelled against the accused is proved for the
offence punishable under Section 138 of N.I.Act and the
appeal is allowed by setting aside the impugned
judgment and order of acquittal, the next question would
be to what punishment accused is liable.
17 CRL.A NO.333 OF 2016
c/w CRL.A NO.334 OF 2016
30. The punishment prescribed for the offence
under Section 138 of the N.I.Act is imprisonment for a
term which may extend to two years or with fine which
may extend to twice the amount of cheque or with both.
The amount involved through the cheques at Ex.P1 is
respectively Rs.8,38,000/- and Rs.8,00,000/-. Taking
into consideration all these aspects, this Court is of the
considered opinion that it would be appropriate to
sentence accused to pay fine of Rs.11,00,000/- each. In
default of paying the fine sentencing accused to undergo
imprisonment for a period of one year would meet the
ends of justice and accordingly, I proceed to pass the
following:
ORDER
(i) Appeals filed by the complainant under
Section 378(4) of Cr.P.C. are allowed.
(ii) The impugned judgments and orders dated
04.02.2016 in C.C.Nos.161/2014 and
117/2014, on the file of Senior Civil Judge
and JMFC, Arasikere, are set aside.
c/w CRL.A NO.334 OF 2016
(iii) In both complaints, accused is convicted for
the offence punishable under Section 138 of
the N.I.Act.
(iv) Accused is sentenced to pay fine in a sum of
Rs.11,00,000/- each and in default of
payment of fine, accused is sentenced to
undergo imprisonment for a period of one
year each.
(v) The entire fine amount recovered is ordered
to be paid to the complainant by way of
compensation.
(vi) The Registry is directed to return the trial
Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
