Karnataka High Court
Smt Veena vs Smt Shobhavathi on 1 February, 2025
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CRL.RP No. 709 of 2020
C/W CRL.RP No. 642 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE S RACHAIAH
CRIMINAL REVISION PETITION NO. 709 OF 2020
C/W
CRIMINAL REVISION PETITION NO. 642 OF 2020
IN CRL.RP.709/2020
BETWEEN:
SMT VEENA
WIFE OF SRI. C.R.ASHOK
AGED ABOUT 45 YEARS
RESIDING AT NO 57, 6TH CROSS
JAYANAGAR V BLOCK
BANGALORE - 560 052.
...PETITIONER
(BY SRI. MUJTABA H, ADVOCATE)
AND:
Digitally signed
by NARAYANA
UMA SMT. SHOBHAVATHI
Location: HIGH WIFE OF K N KONDANDARAMU RAJU
COURT OF
KARNATAKA RESIDING AT NO.27
1ST 'C' MAIN ROAD, 1ST STAGE
GOKUL, NEAR LCR COMPOUND
YESHWANTHPURA, BANGALORE - 560 022.
...RESPONDENT
(BY SRI. S JAGAN BABU, ADVOCATE FOR
SRI. BALAKRISHNA S, ADVOCATE)
THIS CRL.RP IS FILED U/S 397 R/W 401 OF CR.P.C
PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED
10.07.2020 PASSED IN CRL.A.NO.1428/2018 BY THE LXIII
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CRL.RP No. 709 of 2020
C/W CRL.RP No. 642 of 2020
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-64),
BANGALORE AND ETC.,
IN CRL.RP.642/2020
BETWEEN:
SMT. VEENA
WIFE OF SRI. C.R.ASHOK
AGED ABOUT 45 YEARS
RESIDING AT NO.57, 6TH CROSS
JAYANAGAR V BLOCK
BANGALORE - 560 052.
...PETITIONER
(BY SRI. MUJTABA H, ADVOCATE)
AND:
SMT. SHOBHAVATHI
WIFE OF K.N. KONDANDARAMU RAJU
RESIDING AT NO.27
1ST 'C' MAIN ROAD, 1ST STAGE, GOKUL
NEAR LCR COMPOUND
YESHWANTHAPURA, BANGALORE - 560 022.
...RESPONDENT
(BY SRI. S JAGAN BABU, ADVOCATE FOR
SRI. BALAKRISHNA S, ADVOCATE)
THIS CRL.RP IS FILED U/S 397 R/W 401 OF CR.P.C.
PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED
10.07.2020 PASSED IN CRL.A.NO.1045/2018 BY THE LXIII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (CCH-64),
BANGALORE AND ETC.,
THESE PETITIONS HAVING BEEN HEARD AND RESERVED
ON 21.09.2024, COMING ON FOR PRONOUNCEMENT OF
ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:-
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CRL.RP No. 709 of 2020
C/W CRL.RP No. 642 of 2020
CORAM: HON'BLE MR JUSTICE S RACHAIAH
CAV ORDER
1. These two criminal revision petitions are filed by the
common petitioner. The petitioner was the accused in
C.C.No.7961/2014 on the file of XII Additional Chief
Metropolitan Magistrate, Bengaluru. She was convicted
for the offence under Section 138 of the Negotiable
Instruments Act (for short "N.I. Act") and she was
ordered to pay a fine of Rs.19,75,000/-. In default of the
said payment, she shall undergo simple imprisonment for
one year.
2. Being aggrieved by the same, the accused / petitioner
had preferred an appeal before the LXVIII Additional City
Civil and Sessions Judge, Bengaluru, (for short "Appellate
Court") in Criminal Appeal No.1045/2018. The same has
been dismissed by the Appellate Court. Being aggrieved
by the same, she has preferred this revision for seeking
to set aside the concurrent findings.
3. In the meantime, the complainant being aggrieved by the
order passed by the Trial Court filed an appeal before the
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CRL.RP No. 709 of 2020
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Appellate Court for enhancement of compensation / fine
and also for punishment in Criminal Appeal
No.1428/2018. The same has been partly allowed and
the petitioner herein was directed to pay a fine of
Rs.45,10,000/-. In default of payment of said fine, she
shall undergo simple imprisonment for one year.
4. Being aggrieved by the orders passed in the said appeals,
the revision petitioner is before this Court seeking to
allow the revision petition in respect of Criminal Appeal
No.1045/2018 and also allow the revision petition by
setting aside the order passed in Criminal Appeal
No.1428/2018.
5. The rank of the parties in the Trial Court will be
considered henceforth for convenience.
Brief facts of the case are as under:
6. It is the case of the complainant that, the complainant
and the accused were known to each other. In pursuance
of the said acquaintance, the accused approached the
complainant and requested her for a hand loan of
Rs.35,00,000/- for her family commitments and also for
business purposes.
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7. The complainant stated to have advanced the hand loan
of Rs.35,00,000/- by way of cash to the accused
commencing from March 2010 to December 2012. It is
stated in the complaint that, in spite of demand from the
complainant regarding repayment of the loan, the
accused did not heed her words and kept on evading the
matter on one or the other pretext. However, when the
complainant insisted the accused for repayment, two
cheques were issued by the accused for a sum of
Rs.15,00,000/- and Rs.20,00,000/- respectively.
8. The complainant presented the said cheques for
encashment on two different dates and also received
endorsements for those two cheques on 28.03.2013 and
03.04.2013 respectively. The said endorsements would
indicate as "funds insufficient".
9. A legal notice came to be issued on 15.04.2013 calling
upon the accused to make payment of the amount as
stated in the cheques. After receipt of the notice, the
accused has neither repaid the amount nor issued any
reply to the said demand notice. Hence, the complainant
filed a complaint before the Jurisdictional Magistrate.
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10. The complainant in order to prove her case, examined
herself as PW.1 and got marked 16 documents as Exhibits
P1 to P16. On the other hand, the accused examined
herself as D.W.1 and got examined other two witnesses
namely DWs.2 and 3. However, she has got marked two
documents as Exhibits D1 and D2. The Trial Court after
appreciating the oral and documentary evidence on
record, convicted the accused for the offence stated
supra. Being aggrieved by the same, the accused and
the complainant had preferred the appeals before the
Appellate Court. The Appellate Court dismissed the
appeal filed by the petitioner and partly allowed the
appeal filed by the complainant. Being aggrieved by the
same, the petitioner has preferred these revision petitions
seeking to set aside the concurrent findings.
11. Heard Mr. Mujtaba H., learned counsel for the petitioner
and Mr.Jagan Babu, learned counsel for
Mr. Balakrishna S., learned counsel for the respondent in
both the revision petitions.
12. It is the submission of the learned counsel for the
petitioner that, the concurrent findings relating to the
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conviction of the petitioner herein and also an order of
enhancing the fine in the appeal filed by the complainant
are perverse, erroneous, illegal and also contrary to the
evidence on record, therefore, the same is liable to be set
aside.
13. It is further submitted that the complainant before filing
the present complaint, had filed a complaint before the
jurisdictional police and requested the police to settle the
issue for a sum of Rs.28,75,000/-. However, the
complainant in the present case claimed the amount of
Rs.35,00,000/- which is contrary. The Trial Court after
having considered the evidence on record, directed the
petitioner herein to pay the fine of Rs.19,75,000/- as
against Rs.35,00,000/-. However, the Appellate Court
without assigning proper reasons, enhanced the fine
amount for a sum of Rs.45,10,000/-.
14. It is further submitted that the defence of the accused
has not been considered by the Trial Court properly. In
fact, the accused had contended that she had borrowed a
sum of Rs.4,00,000/- in the year 2007 and she had
issued cheques for the purpose of security, however,
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CRL.RP No. 709 of 2020
C/W CRL.RP No. 642 of 2020
those cheques have been misused and filled by the
complainant for the exorbitant amount, which is
considered as unjust enrichment.
15. It is further submitted that the Courts below have failed
to consider the law on presumption properly. The
accused even though has rebutted the presumption by
leading cogent evidence by producing the documents to
show that she is not liable to make any payment as
stated in the cheques, the Courts below erred in arriving
at a conclusion that the accused is guilty of the offences
stated supra.
16. It is further submitted that the Courts below have failed
to consider the facts and circumstances of the case
properly and insisted the accused to rebut the
presumption which is unreasonable and against the
evidence on record, therefore, the concurrent findings
have to be set aside and also set aside the order of
enhancement of fine amount passed in Criminal Appeal
No.1428/2018. Making such submissions, learned counsel
for the petitioner seeks to set aside the concurrent
findings recorded by both the Courts below.
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CRL.RP No. 709 of 2020
C/W CRL.RP No. 642 of 2020
17. Per contra, learned counsel for the respondent
vehemently justified the concurrent findings of the Courts
below and submitted that the details of payment having
been made to the accused had been established by the
complainant. The complainant in order to show her
financial capacity, had produced the bank statement,
which is marked as Ex.P8. The said statement is clear
that she had withdrawn the amount of Rs.33,10,000/- on
different dates as per the findings of the Trial Court.
18. It is further submitted that the accused had admitted the
issuance of the cheques and the signatures found on the
cheques. When the execution of the cheques is admitted,
the initial burden of the complainant is said to have been
discharged. Once the initial burden is discharged by the
complainant, the onus of proof would be shifted to the
accused to rebut the presumption by leading cogent
evidence.
19. It is further submitted that the accused, except denying
the transaction, has not produced any document to show
that she is not liable to pay the amount stated in the
cheques. Though the Trial Court has committed error in
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imposing the fine, the Appellate Court after having
considered the documents available on record, enhanced
the same. Therefore, the findings of the Courts below are
appropriate and proper. Interference with the said
findings may not be appropriate. Making such
submissions, the learned counsel for the respondent
prays to dismiss the petitions.
20. Having heard the learned counsel for the respective
parties and also perused the concurrent findings of the
Courts below in rendering the conviction, it is relevant to
refer to the facts in brief for my consideration.
21. Before adverting to the facts of the case, it is relevant to
refer the proposition of law on the said issues. The
Hon'ble Supreme Court in the case of BASALINGAPPA
v. MUDIBASAPPA1 held in paragraph No.22 which reads
as under:
"22. Elaborating further, this Court in
Rangappa case [Rangappa v. Sri Mohan,
(2010) 11 SCC 441 : (2010) 4 SCC (Civ)
477 : (2011) 1 SCC (Cri) 184] held that
Section 139 of the Act is an example of a
1
(2019) 5 SCC 418
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reverse onus and the test of proportionality
should guide the construction and
interpretation of reverse onus clauses on the
defendant-accused and the defendant-
accused cannot be expected to discharge an
unduly high standard of proof. In paras 27
and 28, the following was laid down:
(Rangappa case [Rangappa v. Sri Mohan,
(2010) 11 SCC 441 : (2010) 4 SCC (Civ)
477 : (2011) 1 SCC (Cri) 184] , SCC pp.
453-54)
"27. Section 139 of the Act is an example of
a reverse onus clause that has been included
in furtherance of the legislative objective of
improving the credibility of negotiable
instruments. While Section 138 of the Act
specifies a strong criminal remedy in relation
to the dishonour of cheques, the rebuttable
presumption under Section 139 is a device
to prevent undue delay in the course of
litigation. However, it must be remembered
that the offence made punishable by Section
138 can be better described as a regulatory
offence since the bouncing of a cheque is
largely in the nature of a civil wrong whose
impact is usually confined to the private
parties involved in commercial transactions.
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In such a scenario, the test of proportionality
should guide the construction and
interpretation of reverse onus clauses and
the defendant-accused cannot be expected
to discharge an unduly high standard of
proof.
28. In the absence of compelling
justifications, reverse onus clauses usually
impose an evidentiary burden and not a
persuasive burden. Keeping this in view, it is
a settled position that when an accused has
to rebut the presumption under Section 139,
the standard of proof for doing so is that of
"preponderance of probabilities". Therefore,
if the accused is able to raise a probable
defence which creates doubts about the
existence of a legally enforceable debt or
liability, the prosecution can fail. As clarified
in the citations, the accused can rely on the
materials submitted by the complainant in
order to raise such a defence and it is
conceivable that in some cases the accused
may not need to adduce evidence of his/her
own."
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22. In another judgment of the Hon'ble Supreme Court in the
case of RAJARAM THROUGH L.Rs v.
MARUTHACHALAM (SINCE DECEASED) THROUGH
L.Rs 2 paragraph No.26, reads as under:
"26. This Court in the case of Baslingappa v.
Mudibasappa (supra) has summarized the
principles on Sections 118(a) and 139 of the N.I.
Act. It will be relevant to reproduce the same.
"25. We having noticed the ratio laid down
by this Court in the above cases on Sections
118(a) and 139, we now summarise the
principles enumerated by this Court in
following manner:
25.1. Once the execution of cheque is
admitted Section 139 of the Act mandates a
presumption that the cheque was for the
discharge of any debt or other liability.
25.2. The presumption under Section 139
is a rebuttable presumption and the onus is
on the accused to raise the probable defence.
The standard of proof for rebutting the
presumption is that of preponderance of
probabilities.
2
(2023) SCC Online 48
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25.3. To rebut the presumption, it is open
for the accused to rely on evidence led by him
or the accused can also rely on the materials
submitted by the complainant in order to
raise a probable defence. Inference of
preponderance of probabilities can be drawn
not only from the materials brought on record
by the parties but also by reference to the
circumstances upon which they rely.
25.4. That it is not necessary for the
accused to come in the witness box in support
of his defence, Section 139 imposed an
evidentiary burden and not a persuasive
burden.
25.5. It is not necessary for the accused to
come in the witness box to support his
defence."
23. On careful reading of the above said dicta of the Hon'ble
Supreme Court, it makes it clear that once the execution
of the cheque is admitted, Section 139 of N.I Act
mandates a presumption that the cheque was for
discharge of any debt or other liability. However, the said
presumption is a rebuttable presumption. To rebut the
presumption, it is open for the accused to rely on the
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evidence led by him or he can also rely on the materials
submitted by the complainant in order to raise the
probable defence.
24. Having considered the proposition of law laid down by the
Hon'ble Supreme Court in this regard, now it is relevant
to advert to the facts of the case and also findings of the
concurrent jurisdiction.
25. It is a specific case of the complainant that she had
advanced a sum of Rs.35,00,000/- to the accused from
30.03.2010 to 25.12.2012. The complainant in order to
establish her financial capacity to lend such a huge
amount, has produced Ex.P8 which is the account extract.
As per the said account extract, she had withdrawn
Rs.33,10,000/- from her account during the above said
period.
26. The defence of the accused was that, she had borrowed a
sum of Rs.4,00,000/- and she had issued cheques as a
security for the said amount. Though she had cleared the
loan and requested the complainant to return the
cheques, the complainant on one or the other context,
was evading the matter. It is needless to say that, once
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the execution of the cheque is admitted, the onus of proof
would be shifted to the accused to rebut the presumption
by leading cogent evidence. In other words, the Courts
below ought to have considered the evidence of the
defence first and if it arrives at a conclusion that the
accused has rebutted the presumption, then the evidence
of the complainant has to be seen.
27. It is a settled principle of law that, it shall be presumed
unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section
138 of N.I. Act for the discharge, in whole or in part, of
any debt or other liability. It is also a settled principle of
law that the said presumption is rebuttable in nature and
the accused has to rebut the said presumption by leading
cogent evidence.
28. In the present case, the defence of the accused was that,
she had borrowed a sum of Rs.4,00,000/- in the year
2007 and issued cheques as a security. Even though she
had cleared the said loan, cheques were not returned
from the complainant. In order to show her bona
fideness, she has produced Ex.D1 which is titled as
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"declaration". It indicates that, the complainant had
made a declaration that all the cheques and signed blank
stamp papers received from the accused were considered
as null and void and further she stated that those
documents have been misplaced.
29. It is contended that the Ex.D1 was executed on
27.06.2013. However, the complainant had filed a
complaint before the Magistrate by suppressing Ex.D1.
On going through the said document and also the
complaint, there is a force in the submission of the
learned counsel for the petitioner to accept the said fact.
It is also noted here that the accused in addition to
Ex.D1, has examined other two witnesses as DWs.2 and
3. They have categorically stated in their evidence that
Ex.D1 has been executed in their presence by the
complainant. Such being the fact, it can be inferred that
the accused has rebutted the presumption. However, the
Trial Court and the Appellate Court have failed to take
note of the said aspect and proceeded to render the
conviction which cannot be sustainable.
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30. Further, on careful reading of the averments of Exs.P11
and P12, it emerges that the accused even though had
raised a defence that she had availed loan of
Rs.4,00,000/- in the year 2007 and she had cleared the
same, the fact remains that she had admitted before the
jurisdictional police that she had to repay the amount of
Rs.13,00,000/- out of Rs.28,50,000/-.
31. Be that as it may, the accused by leading her evidence
has rebutted the presumption that she is not liable to pay
the amount of Rs.35,00,000/- as claimed by the
complainant. Obviously, the burden would be shifted on
the complainant to prove that she had advanced a sum of
Rs.35,00,000/- to the accused.
32. On reading the evidence of PW.1, it appears that she had
advanced a sum of Rs.35,00,000/- to the accused on
piecemeal basis and thereafter the accused had issued
cheques to clear the debt. No doubt, PW.1 had produced
Ex.P8 which is her bank statement, the same has been
produced to show that she had sufficient amount in her
account to advance the same as a loan to the accused. It
is needless to say that mere withdrawal of the amount
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from her account is not sufficient to infer that she had
advanced the amount to the accused.
33. It can be inferred from the evidence of PW.1 that though
according to her, the accused had to pay the amount
mentioned in the cheques, the fact remains that the same
is contrary to Exs.P11, P12 and Ex.D1. Therefore, I am
of the considered opinion that the complainant has not
established the debt or liability of the accused.
34. Having considered the facts and circumstances and also
the settled principle of law on this aspect, I am of the
considered opinion that both the Courts below have
concurrently committed patent error in appreciating the
law. Hence, interference with the findings of the Courts
below is justified and the concurrent findings need to be
set aside.
35. In the light of the observations made above, I proceed to
pass the following:-
ORDER
(i) Criminal Revision Petition No.642/2020 is
allowed. Consequently, the judgment of
conviction and order on sentence, dated
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25.05.2018 passed in C.C.No.7961/2014 by
the XII Additional Chief Metropolitan
Magistrate, Bangalore and judgment and order
dated 10.07.2020 passed in
Crl.A.No.1045/2018 on the file of the LXIII
Additional City Civil and Sessions Judge (CCH-
64) at Bengaluru are set aside.
(ii) Criminal Revision Petition No.709/2020 is
allowed. Consequently, the judgment and
order dated 10.07.2020 passed in
Crl.A.No.1428/2018 on the file of the LXIII
Additional City Civil and Sessions Judge (CCH-
64) at Bengaluru is set aside.
(iii) The petitioner is acquitted for the offence under
Section 138 of the Negotiable Instruments Act.
(iv) Bail bonds executed, if any, stand cancelled.
(v) The Trial Court is directed to refund the
amount, if any, deposited by the petitioner to
the petitioner/accused, on proper identification.
(vi) The Trial Court is directed to recover the
amount, if any, released in favour of the
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respondent / complainant, by invoking proper
procedure and hand over the said amount to
the petitioner / accused with interest.
(vii) The Registry is directed to send the records to
the Trial Court along with a copy of this order
forthwith.
Sd/-
(S RACHAIAH)
JUDGE
UN/Bss
