Karnataka High Court
Pampanna S/O Nagappa H vs Nagaraj Gupta on 2 September, 2024
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CRL.A No. 100008 of 2017
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 2ND DAY OF SEPTEMBER, 2024
BEFORE
THE HON'BLE MS. JUSTICE J.M.KHAZI
CRIMINAL APPEAL NO.100008 OF 2017 (A)
BETWEEN:
PAMPANNA S/O. NAGAPPA H.,
AGE: 36 YEARS, OCC: AGRICULTURE,
R/O: HOSALLI, TQ: GANGAVATHI,
DIST: KOPPAL.
...APPELLANT
(BY SRI A.M. GUNDAWADE, ADVOCATE FOR APPELLANT)
AND:
NAGARAJ GUPTA S/O. MANGALESH GUPTA,
AGE: 43 YEARS, OCC: BUSINESS,
R/O: BESIDE CHANNABASAVESHWARA MILK DAIRY,
M.G. ROAD, GANGAVATHI.
...RESPONDENT
(BY SRI SUNIL S.DESAI, ADVOCATE FOR RESPONDENT)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
Digitally signed by CR.P.C., PRAYING TO ALLOW THE PRESENT APPEAL BY SETTING
YASHAVANT ASIDE THE JUDGMENT OF ACQUITTAL DATED 08.11.2016, PASSED
NARAYANKAR IN CRIMINAL CASE NO.247 OF 2013, BY PRINCIPAL CIVIL JUDGE
Location: HIGH AND JUDICIAL MAGISTRATE FIRST CLASS COURT GANGAVATHI AND
COURT OF
KARNATAKA TO PASS A JUDGMENT OF CONVICTION AGAINST THE
ACCUSED/RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF NEGOTIABLE INSTRUMENT ACT AND ALSO
DIRECTING THE RESPONDENT TO PAY COMPENSATION TO THE
COMPLAINANT INCLUDING THE CHEQUE AMOUNT OF RS.4,00,000/-
IN ACCORDANCE WITH LAW.
THIS CRIMINAL APPEAL, COMING ON FOR DICTATING
JUDGMENT, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
CORAM: THE HON'BLE MS. JUSTICE J.M.KHAZI
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CRL.A No. 100008 of 2017
ORAL JUDGMENT
(PER: THE HON'BLE MS. JUSTICE J.M.KHAZI)
In this appeal filed under section 378(4 ) of the Code
of Criminal Procedure, the appellant/complainant has
challenged dismissal of the complaint filed by him for the
offence punishable under section 138 of Negotiable
Instruments Act, and thereby acquittal of the
respondent/accused by the trial court.
2. For the sake of convenience, parties are
referred to by their ranks before the trial court.
3. Complainant filed complaint against the accused
contending that he and accused are known to each other
and with that acquaintance, on 02.08.2012 accused
borrowed loan of ₹3,50,000/- from him for improvement
of his business and also for family necessity. He promised
to repay the loan with interest at 2% per month and on
the same day issued a post dated 02.03.2013 cheques for
₹4,00,000/-, including the interest calculated for seven
months, with an assurance that it would be realised on
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presentation. Accordingly, on 04.03.2013, the complainant
presented the said cheque for realisation through his
account. However, on the same day, it was returned
dishonoured with an endorsement 'account dormant'. Even
though, he brought this to the notice of the accused, he
did not arrange for payment of the amount due. Hence,
complainant got issued legal notice dated 15.03.2013.
Intentionally, the accused has refused to receive the
notice and comply with it. Without any alternative, the
complaint is filed.
4. After due service of summons, accused has
appeared before the trial court and contested the case by
pleading, not guilty.
5. In order to prove the allegations against the
accused, complainant is examined as PW1 and marked
Exs.P1 to 9.
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6. During the course of his statement under
Section 313 Cr.P.C, the accused had denied the
incriminating evidence led by the complainant.
7. Accused has not let any defence evidence.
8. Vide impugned judgement and order, the trial
court dismissed the complaint.
9. Aggrieved by the same, the complainant is
before this court contending that it is contrary to the facts,
probabilities of the case and evidence on record. There is
sufficient evidence both oral and documentary to prove
the allegations against the accused and the same is not
appreciated by the trial court. There is no dispute that the
cheque in question is drawn on the account of the accused
maintained with his banker and it bears his signature. The
presumption under Section 139 of N.I.Act is attracted,
placing the initial burden on the accused to rebut the
same, only after which the burden would shift on the
complainant. Despite the fact that accused has failed to
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rebut the presumption and the complainant establishing
his financial capacity to lend ₹3,50,000/-, the trial court
has disbelieved the case of the complainant and dismissed
the complaint. It has also erred in holding that the
dishonour of the cheque on the ground of account being
dormant would not fall under the category attracting the
offence punishable under Section 138 of N.I.Act. The
reasons assigned for dismissing the complaint are not
sustainable and call for interference by this court.
10. In support of his arguments, the learned council
for complainant has relied upon the following decision.
i) Rajesh Jain vs Ajay Singh1;
11. On the other hand, learned counsel for the
accused has supported the impugned judgment and order
and sought for dismissal of the appeal also.
12. In support of her arguments, learning counsel
for the accused has relied upon the following decisions:
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i) Basalingappa vs Mudibasappa2
ii) Sunitha, vs Sheela Antony and Another3
13. Heard elaborate arguments of both sides and
perused the records.
14. Thus, it is the definite case of complainant that
the cheque in question was issued by the accused towards
repayment of legally recoverable debt or liability.
However, when presented for realisation, it was
dishonoured on the ground that the account is dormant.
After issue of legal notice and on the failure of the accused
to comply with the said notice, complaint is filed.
15. Though accused admit that the cheque in
question is drawn on his account and it bears his
signature, he has disputed that he borrowed any loan from
the complainant and issued the cheque towards
repayment of the said loan. Even though the accused has
not sent any reply to the Legal notice, at the trial he has
(2019) 5 SCC 418
2020 SCC OnLine Ker 1750
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come up with a specific defence that the complainant is
not having financial capacity to lend ₹3,50,000/-. He has
claimed that the subject cheque and one more cheque was
issued by him to one Maruti Prasad and utilising one of the
cheque, he has filed this complaint to help this Maruti
Prasad who has also filed a complaint against the accused.
16. Now coming to the fact of the present case.
Having regard to the fact that accused admit that the
cheque in question is drawn on his account, maintained
with his banker and bears his signature, the presumption
under Section 139 of N.I Act, is attracted and is operating
in favour of the complainant. It would place the initial
burden on the accused to prove that it was not issued for
repayment of any legally recoverable debt or liability, but
on the other hand to establish the circumstances in which
the cheque has reached the hands of complainant, after
which the burden would shift on the complainant to prove
his case. Of course, it is sufficient for the accused to
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probabilise his defence, whereas the complainant is
required to prove his case beyond reasonable doubt.
17. However, in John K.Abraham Vs. Simon C.
Abraham & Anr (John K.Abraham)4, 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.
18. In Tedhi Singh Vs Narayan Das Mahant (Tedhi
Singh)5, the Hon'ble Supreme Court held that where the
(2014) 2 SCC 236
2022 SCC OnLine SC 302
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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, if during the course of trial accused has
taken up such defence, then it is necessary for the
complainant to prove his financial capacity, when he
allegedly advanced the amount and towards repayment of
it, the accused has issued the cheque.
19. In fact, in APS Forex vs Shakti International
Fashion Linkers Pvt. Ltd (APS Forex)6, the Hon'ble
Supreme Court held that when accused rises issue of
financial capacity of complainant in support of his probable
defence, despite presumption in favour of complainant
regarding legally enforceable debt under Section 139, 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.
(2020) 12 SCC 724
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20. In the light of the ratio in the above decisions
and also the specific defence taken by the accused, it is for
the complainant to prove that the legal notice was sent to
the correct address of the accused and he has intentionally
not received it and therefore, there is Presumption of
service. It is also for the complainant to prove his financial
capacity, after which accused is required to prove his
defence.
21. So far as issue of legal notice is concerned,
accused is not disputing his address to which the legal
notice was sent. It is the same address given in the
complaint at which the summons is served on the accused.
As evident from the endorsement on the postal envelope
at Ex.P6, the accused has refused to receive the same and
as such it is returned to the sender. Therefore, it is
required to presume that intentionally, the accused has
failed to receive the notice and comply with it or send
reply.
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22. In the light of the ratio in (Tedhi Singh),
despite the fact that accused has not sent reply to the
legal notice challenging the financial capacity of the
complainant, at trial, he may do so, in which event, it
would be necessary for the complainant to prove his
financial capacity. During the course of his arguments, it is
submitted by the learned counsel for complainant that the
accused has not challenged the financial capacity of the
complainant and therefore, he is not required to prove the
same. I am afraid this submission is not acceptable. The
accused has cross-examined the complainant as to the
source of income. At the time of cross-examination, the
complainant has deposed that he is having 5 acres and 20
guntas of agriculture land, and he is personally cultivating
them rising paddy and getting 40 bags of paddy per acre
and getting ₹35,000 to ₹40,000 per acre. He has also
deposed that usually he sell the paddy through Shanti
Traders. He is not having any documents to evidence the
said fact.
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23. When complainant is regularly growing paddy
and sell the same through a dalal, he is expected to be in
possession of receipts for having supplied the paddy and
received money. When the complainant has maintained an
account, it is reasonable to expect that he would keep his
income in the account. Even though complainant has
produced RTC extract Exs.P7 to 9 in respect of the lands
standing in his name, column No.13 does not disclose the
nature of the crops grown. In fact, there is endorsement
to the effect that "no crop information" is forthcoming. The
complainant has not come up with any other source of
income other than agriculture. In the absence of proof of
having carried out any agricultural operations and also
received income from the same, the contention of
complainant that he was having sufficient source of
income to lend ₹3,50,000/- to the accused cannot be
accepted. Complainant having failed to prove his financial
capacity, in the light of the ratio in (APS Forex), the
presumption under section 139 of the N.I.Act is not raised,
and the burden has not shifted on the accused to rebut the
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same. So far as the decision in (Rajesh Jain) is
concerned, on facts, it was held that complainant proved
the basic facts and accused failed to rebut the
presumption under section 139 of N.I.Act. Therefore, the
decision in (Rajesh Jain) is not applicable to the case on
hand.
24. Though, The complainant has denied that he is
working as a clerk with the financial establishment run by
Maruti Prasad and Raghavendra, who are brothers and to
help them, he has filed the complaint utilising one of the
cheques given to the said Maruti Prasad, he has admitted
that he know them. One more important factor that weigh
in favour of the accused is that the signature and rest of
the writing in the cheque at Ex.P1 is in different ink, which
support the defence of the accused that a blank check was
given by way of security and it was filled up to suit the
convenience to file the complaint.
25. Anyhow, since the complainant has failed to
prove his financial capacity, taking into consideration the
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oral and documentary evidence placed on record, the trial
court has come to a correct conclusion that the allegations
against the accused are not proved and acquitted him.
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
is dismissed.
(ii) The impugned judgment and
order of acquittal dated 08.11.2016
passed in C.C.No.247/2013 by the
Principal Civil Judge and JMFC,
Gangavathi is confirmed.
(iii) Registry is directed to send back
the trial court records along with copy
of this order.
Sd/-
(J.M.KHAZI)
JUDGE
MBS, CT: UMD
