Karnataka High Court
Mr Ratnaiah vs Mr M R Somaraju Dandu on 28 May, 2024
1 CRL.A NO.1368 OF 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF MAY, 2024
BEFORE
THE HON'BLE MS.JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.1368 OF 2022
BETWEEN:
MR RATNAIAH
AGED ABOUT 69 YEARS,
S/O RANGAIAH,
R/AT NO.15, 2ND CROSS,
PATELAPPA LAYOUT, NAGSHETTY HALLI,
BENGALURU - 560 054.
......APPELLANT
(BY SRI. TAJUDDIN, ADVOCATE)
AND:
MR M R SOMARAJU DANDU
AGED ABOUT 54 YEARS,
S/O YESUDAS,
R/AT NO.71, M.R.S.PALYA,
NANDIDURGA ROAD,
BENSON TOWN POST,
BENGALURU - 560 046.
....RESPONDENT
(BY SRI. SRINATH P, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C PRAYING TO ALLOW THE APPEAL AND SET
ASIDE THE ORDER OF THE IMPUGNED JUDGMENT BY THE
ORDER DATED 14.06.2022 PASSED BY THE COURT OF 18
ACMM BENGALURU IN C.C.NO.14854/2021 ACQUITTING THE
ACCUSED ACTING UNDER SECTION 255(1) OF CR.PC FOR
THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT
OF THE COURT AND ORDER FOR THE PAYMENT OF DOUBLE
THE CHEQUE COVERED AMOUNT WITH INTEREST BY THE
ACCUSED RESPONDENT TO THE APPELLANT BY ALLOWING
THE APPEAL.
2 CRL.A NO.1368 OF 2022
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 of Cr.P.C, is by
the complainant challenging the acquittal of
respondent/accused for the offence punishable Section
138 of Negotiable Instruments Act, 1881 (for short 'N.I
Act').
2. For the sake of convenience, the parties are
referred to by the rank before the trial Court.
3. It is the case of the complainant that the
accused contacted him for a hand loan. On 04.06.2017,
the complainant had collected a sum of Rs.9 lakhs by
entering into lease agreement from his tenant. Adjusting
the remaining Rs.1,00,000/-, complainant paid hand loan
in a sum of Rs.10 lakhs to the accused. He offered to pay
interest at the rate of 2% per month, which comes to
Rs.20,000/- per month. Accused has executed hand loan
agreement dated 13.06.2017 and issued three cheques
dated 31.05.2021 for Rs.4 lakhs, Rs.3 lakhs and Rs.3
lakhs. However, accused never repaid even a single pie
towards interest or principal, despite repeated request
and demand. During the month of May 2021,
complainant and his son Ramesh Kumar contacted the
accused and demanded repayment of the loan amount.
Accused requested for 15 days time to pay the amount
due, failing which the cheques may be presented for
realisation. Since the accused failed to pay the amount
due, complainant presented the cheques through his
bank on 31.05.2021. All the cheques have been
dishonoured on the ground of "Funds insufficient". In this
regard, complainant got issued legal notice to the
accused and it is duly served on him. However, instead
of paying the amount due, the accused has sent an
evasive reply and hence the complaint.
4. After due service of summons, the accused
has appeared before the trial Court through advocate
and resisted the case by pleading not guilty.
5. In order to prove the allegations against the
accused, complainant has examined himself as PW-1 and
got marked Ex.P1 to 23.
6. During the course of his statement under
Section 313 Cr.P.C, the accused has denied incriminating
evidence led by the complainant.
7. He has not stepped into the witness box, but
got marked one document as Ex.D1.
8. Vide the impugned judgment and order the
trial Court dismissed the complaint, mainly on the ground
that the complainant has failed to prove his financial
capacity to lend Rs.10 lakhs to the accused and on the
other hand the accused has probabilised his defence.
9. Aggrieved by the same, the complainant has
filed this appeal, contending that the impugned judgment
and order are erroneous. Though trial Court has rightly
held that the accused was residing in the address since
more than 15 years, it has erred in accepting the defence
of the accused that the cheques are stolen by
complainant's sister. The complainant has proved the
allegations against accused beyond reasonable doubt.
Documents produced by the complainant prove that in
addition to receiving retirement benefits, the complainant
is also drawing pension in a sum of Rs.40,154/- during
2021. Viewed from any angle, the impugned judgment
and order are not sustainable and pray to allow the
appeal, convict the accused and sentence him in
accordance with law.
10. On the other hand, learned counsel for the
accused supported the impugned judgment and order
and sought for dismissal of the appeal.
11. Heard arguments of both sides and perused
the record.
12. Thus, it is the definite case of complainant
that during June 2017, accused borrowed a sum of Rs.10
lakhs by issuing three post dated 31.05.2021 cheques for
a total sum of Rs.10 lakhs, agreeing to repay the same
within two years with interest at 2% per month and even
after two years when he failed to repay the same, during
May 2021, when complainant and his son met the
accused at his house and insisted the payment of the
amount due with interest, accused requested for 15 days
time and instructed them to present the cheques, if he
fail to pay the amount within the said period. When
accused failed to comply with the promise made to him,
complainant presented the cheques, but they came to be
dishonoured for want of sufficient funds and after issuing
notice, he has filed the complaint.
13. Though the accused admit that the cheques in
question are drawn on his account, maintained with his
banker and they bear his signature, he has alleged that
they were stolen by the sister of the complainant and
misusing the same the present complaint is filed. At the
trial, the accused has also challenged the financial
capacity of complainant.
14. Having regard to the fact that the cheques in
question belongs to accused, drawn on his account
maintained with his banker and they bear his signature,
presumption under Section 139 of 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
cheques have reached the hands of the complainant.
Though in the reply notice accused has not disputed the
financial capacity of complainant to lend him hand loan of
Rs.10 lakhs, during the trial he has challenged the same.
15. In John K.Abraham Vs. Simon C. Abraham &
Anr (John K.Abraham)1, 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.
16. In Tedhi Singh Vs Narayan Das Mahant
(Tedhi Singh)2, 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,
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, also
doing the reply notice the accused has not challenged the
financial capacity of complainant. However, at the trial he
has done so and therefore burden is on the complainant
to prove his financial capacity.
17. In APS Forex vs Shakti International Fashion
Linkers Pvt. Ltd (APS Forex)3, the Hon'ble Supreme
Court held that when accused raises issue of financial
2022 SCC OnLine SC 302
(2020) 12 SCC 724
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)4,
K.Subramani Vs. K.Damadara Naidu (K.Subramani)5 and
K.Prakashan Vs. P.K.Surenderan (K.Prakashan)6, 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
(2013) 3 SCC 86
(2015) 1 SCC 99
(2008) 1 SCC 258
was having financial capacity to advance Rs.10 lakhs to
the accused.
20. At the outset, it is relevant to note that in the
complaint, the complainant has not stated the exact date
on which he lent Rs.10 lakhs to the accused. On the other
hand, what he has pleaded is when he lent Rs.10 lakhs to
the accused, he issued three post dated 31.05.2021
cheques. He has also claimed that the accused executed
agreement dated 13.06.2017 undertaking to pay the
amount after two years. So far as establishing his
financial capacity to lend Rs.10 lakhs, the complainant
has deposed that in his house he had Rs.9 lakhs
pertaining to lease of his house and adding Rs.1 lakh
which he had saved, he paid the total sum of Rs.10 lakhs
to the accused. The complainant has not produced the
original lease agreement. Since he produced the photo
copy of the lease agreement, it was not marked. The
complainant has not taken any steps to produce the
original and examine the tenant to prove that he has paid
Rs.9 lakhs and the said sum was available to the
complainant when the transaction with the accused took
place. If at all the loan transaction between the
complainant and accused took place around June 2017
and the accused had agreed to pay the amount after two
years, it does not appeal to reason as to why complainant
issued cheques dated 31.05.2021, which is four years
after the transaction. The complainant would have very
well insisted upon getting the cheque of the year 2019
instead of 2021. It appears in order to overcome the
limitation, the complainant has got filled the date
31.05.2021.
21. As rightly observed by the trial Court, during
his cross-examination, the complainant has stated that he
do not remember the date on which he lent Rs.10 lakhs to
the accused. However, he claimed that 5-6 months after
payment of the loan amount, the accused executed
Ex.P18 agreement. He has specifically stated that he has
not paid any amount to the accused on the date of
agreement. He has also stated that he received the lease
amount of Rs.9 lakhs from the tenant about one month
prior to the execution of Ex.P18. If this piece of evidence
is accepted as true, then the complainant received Rs.9
lakhs about one month prior to Ex.P18 dated 13.06.2017,
which comes around May 2017. According to the
complainant, he paid Rs.10 lakhs to the accused about
5-6 months prior to the execution of Ex.P18 dated
13.06.2017, which comes around January 2017. Thus,
when the complainant allegedly paid Rs.10 lakhs to the
accused during the month of January 2017, he had not
yet received Rs.9 lakhs from his tenant.
22. The entire pleadings and evidence on record,
including the testimony of complainant is smacked with
doubt. He could have examined the witness to Ex.P18.
Consequently, complainant has failed to prove his
financial capacity to lend Rs.10 lakhs to the accused. The
complainant has retired during 2014. It has come in his
evidence that during 1999, he purchased a site taking
loan on interest. He has constructed ground floor by
taking loan from his employer i.e., BWSSB. During 2010,
he had availed loan of Rs.25 lakhs from SBI for
construction of the first and second floor of his house and
the period of loan is 20 years and still he is paying the
instalments. He has specifically deposed that he has not
paid the loan amount out of the pension benefits received
by him and he has not withdrawn any amount from his
account to pay to the accused.
23. Looking to the age of the complainant, he has
retired around 2014. He has not placed any material on
record as to what exactly is the amount received by him
by way of his pensionary benefits. In fact, as per Ex.P23,
on 10.06.2015, a sum of Rs.12,30,899/- is towards
closure of housing loan. Other than this, there is no
material to prove the pensionary benefits received by
him. Of course, during his cross-examination, the
complainant has specifically stated that he has not paid
the loan amount out of retirement benefits. The
retirement benefits received by him is withdrawn from his
account long back. Thus, the complainant has failed to
prove his financial capacity and that he has advanced
Rs.10 lakhs to the accused. Therefore, the presumption
under Section 139 of the N.I Act is not operating in
favour of the complainant, shifting the burden on the
accused.
24. The accused has taken a specific defence that
accused was a driver and was in contact with highly
placed persons and the sister of accused was working as a
maid servant and during COVID-19 time she was visiting
the house of accused requesting him to get some work for
her and at that time she committed theft of signed
cheques kept in his house for the purpose of filling petrol
and other reasons. Of course, the complainant has denied
the said suggestion. However, he has deposed that he
and his sister used to visit the house of accused
demanding repayment of the loan. Even though the
alleged loan was given in the year 2017 and the accused
was supposed to repay the same immediately after lapse
of two years, the subject cheques are of the year 2021. It
corroborate with the allegations that in all probability
during COVID-19 period, the cheques might have been
collected from the house of accused and utilised for the
purpose of filing the complaint.
25. After examining the oral and documentary
evidence placed on record, the trial Court has come to a
correct conclusion that the complainant has failed to
prove his financial capacity and allegations against the
accused beyond reasonable doubt and rightly dismissed
the complaint. On re-appreciation of the oral and
documentary evidence placed on record, this Court is of
the considered opinion that there are no justifiable
grounds to interfere with the well reasoned judgment of
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 dated
14.06.2022 in C.C.No.14854/2021 on the
file of XVIII ACMM, Bengaluru is hereby
confirmed.
(iii) The Registry is directed to send back the
trial Court records along with copy of this
judgment forthwith.
Sd/-
JUDGE
RR
