Karnataka High Court
Smt. S N Jyothi vs M S Subramani on 10 February, 2025
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
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CRL.A No. 1176 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 10TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL APPEAL NO. 1176 OF 2013
BETWEEN:
SMT. S.N. JYOTHI
W/O T.G. NAGESH
AGED ABOUT 46 YEARS
R/O SRI BEERESHWARA NILAYA
I PARALLEL ROAD
RAJENDRA NAGAR
SHIVAMOGA-577 201
...APPELLANT
(BY SRI. BASAVARAJ PATEL G.K, ADVOCATE FOR
SRI. RANGANATHA S. JOIS, ADVOCATE)
AND:
M.S. SUBRAMANI
Digitally signed by
S/O MAHALINGAM
HEMAVATHY
GANGABYRAPPA
AGED ABOUT 44 YEARS
Location: HIGH COURT PROPRIETOR
OF KARNATAKA
M.R. BIRIYANI HOTEL
NEAR LAKSHMI THEATRE
100 FT. ROAD
SHIVAMOGA CITY-577 201
...RESPONDENT
(BY SRI. CHIDAMBARA G.S, ADVOCATE)
THIS CRL.A. IS FILED U/S.378(4) CR.P.C TO SET ASIDE
THE IMPUGNED JUDGMENT OF ACQUITTAL ORDER DATED
18.11.2013 PASSED BY THE III ADDL. C.J. AND J.M.F.C.,
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CRL.A No. 1176 of 2013
SHIMOGA IN C.C.NO.440/2009 - ACQUITTING THE
APPELLANT/ACCUSED FOR THE OFFENCE P/U/S 138 OF
N.I.ACT.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR
ORAL JUDGMENT
[
This appeal is filed by the complainant challenging
the judgment of acquittal dated 18.11.2013 passed in
C.C.No.440/2009 by the III Additional Civil Judge and
J.M.F.C., Shivamogga, whereunder the respondent -
accused has been acquitted for offence punishable under
Section 138 of the Negotiable Instruments Act, 1881
(hereinafter referred to as 'N.I. Act' for brevity).
2. The case of the appellant - complainant in brief,
is as under:
The appellant -complainant and respondent -
accused are known to each other through husband of the
appellant -complainant. Out of that acquaintance, the
accused has borrowed a hand loan of Rs.8,00,000/- for his
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immediate business and domestic needs. On 02.10.2008
the accused has borrowed Rs,8,00,000/- from the
appellant -complainant agreeing to repay the same within
three months. The respondent -accused has issued post
dated cheque for Rs.8,00,000/- and it is dated 08.01.2009
drawn on Vijaya Bank, S.R. Road Brnach, Shivamogga.
The respondent -accused did not repaid the amount within
three months and therefore, the complainant presented
the said cheque for encashment and the said cheque came
to be dishonoured for reason "funds insufficient". The
appellant -complainant got issued legal notice on
18.02.2009 through her counsel calling upon the
respondent -accused to pay the cheque amount. Inspite
of service of notice the respondent -accused did not pay
the cheque amount. Therefore, the complainant has filed a
private complaint against the respondent - accused for
offence punishable under Section 138 of the NI Act.
3. Learned Magistrate has taken cognizance
against the respondent -accused and registered case in
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C.C.No.440/2009 for offence punishable under Section 138
of the N.I Act. The plea of respondent - accused has been
recorded. The complainant in order to prove her case has
examined herself as P.W.1 and got marked documents as
Ex.P1 to P7. Ex.D.1 has been marked in the cross
examination of P.W.1. The statement of respondent -
accused came to be recorded under Section 313 of Cr.P.C.
The respondent -accused has been examined himself as
D.W.1 and got marked documents as Ex.D2 and D3.
Learned Magistrate after hearing arguments on both sides
has formulated points for consideration and passed
impugned judgment of acquittal. The said judgment of
acquittal has been challenged by the complainant in this
appeal.
4. Heard learned counsel for the appellant and
learned counsel for the respondent.
5. Learned counsel for the appellant would
contend that the respondent -accused has admitted his
signature on Ex.P1 -cheque and therefore, the
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presumption has to be drawn under Section 139 of the N.I
Act that cheque is issued for discharging debt. The said
presumption has not been rebutted by the respondent -
accused. The respondent -accused has taken up his
defence that signed cheque has been issued as security
as he has taken a room on rent in the building belonging
to the appellant -complainant and the said signed cheque
has been misused. He contends that the said defence has
not been established. Ex.P7 -sale deed establishes the
capacity of the appellant -complainant to lend money of
Rs.8,00,000/-. He further submits that merely because
the appellant -complainant is not holding any money
lending license on that ground the case of the appellant -
complainant cannot be rejected. On that point he placed
reliance on the decision of this Court in the case of V.
Satyanarayana Vs M/s. Sandeep Enterprises1. On
these grounds, he prays to allow the appeal and convict
Reported in ILR 2004 KAR 4505
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the respondent -accused for offence punishable under
Section 138 of the N.I Act.
6. Learned counsel for the respondent -accused
would contend that in the averments of the complaint
itself it is stated that post dated cheque has been issued at
the time of borrowing. P.W.1 in her cross examination has
admitted that she and her husband were lending money
and they did not possess money lending license. There
are contradictions in the averments of the complaint and
in the deposition of the complainant given in criminal case
which is at Ex.D.1 regarding the period of borrowing. It is
further contended that the amount at the hand of the
appellant -complainant was unaccounted cash and she has
not filed any income tax returns. On that point he placed
reliance on the decision of the Bombay High Court in the
case of Sanjay Mishra Vs Ms Kanishka Kapoor @ Nikki
And Anr2. He also placing reliance on the decision of Co-
Ordinate Bench of this Court in the case of B. Girish Vs S.
Reported in 2009 CRI.L.J 3777
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Ramaiah3 has contended that huge money of
Rs.8,00,000/- has been lent by cash and any money to be
lent above Rs.20,000/- has to be given though account
payee cheque. There are no documents regarding lending
huge amount to the respondent -accused. Considering the
said aspect, the presumption drawn under Section 139 of
N.I Act has been rebutted. On these ground he submits
that learned Magistrate has rightly passed impugned
judgment of acquittal and prays for dismissal of the
appeal.
7. Having heard learned counsels, this Court has
perused the impugned judgment and trial Court records.
8. It is specific case of the appellant -complainant
that she lent Rs.8,00,000/- to the respondent -accused on
02.10.2008 and for making repayment of the said amount
borrowed the respondent -accused has issued cheque -
Ex.P1 dated 08.01.2009 for Rs.8,00,000/-. The
respondent -accused has admitted his signature on
Reported in 2010 SCC OnLine Kar 54
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Cheque -Ex.P1. As signature on Ex.P1 -cheque is
admitted, the presumption has to be drawn under Section
139 of N.I Act that the cheque has been issued for
discharging of debt. The said presumption is rebuttable
presumption. The standard of proof for rebutting the
presumption is preponderance of probability.
9. On reading the cross examination of P.W.1, the
defence of the respondent -accused is that he had taken a
room on rent in the building belonging to the appellant -
complainant and her husband and as security deposit is
not given, he had issued signed blank cheque as security
and the same has been misused. The suggestion put in
that regard has been denied by P.W.1. In order to prove
the said defence the respondent -accused has not placed
any evidence on record. He has not choosen to examine
any of tenants in the said building. The complainant
owning the said building is admitted and they giving rooms
on rent is also admitted. They taking the advance as
security deposit is also admitted by P.W.1. But the
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defence of the respondent -accused giving signed blank
cheque as security for occupying the said building as
tenant in lieu of non paying security deposit has been
denied by P.W.1. Merely because there are contradictions
in the averments of the complaint and evidence of P.W.1
with regard to the period of borrowing with the statement
made by the complainant in C.C. No. 427/2009 which is at
Ex.D.1, the said aspect will not disprove the fact of lending
money by the complainant to the respondent -accused.
10. The respondent -accused has contended that
the appellant -accused had no capacity to lend cash of
Rs.8,00,000/- to the respondent -accused. Ex.P7 is
certified copy of registered sale deed dated 24.01.2008
wherein the complainant, her husband and their two
children have sold their property for consideration of
Rs.47,00,000/- and the said consideration has been
received by cash. The said document -Ex.P7 -sale deed is
not disputed by the respondent -accused. The said sale
has taken place 08 months prior to the said transaction of
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hand loan. Therefore, the said aspect itself establish that
the appellant -complainant has capacity of lending of
Rs.8,00,000/- as on the date of borrowing by the
respondent -accused. Merely because there is gap of more
than 08 months between the receiving cash by the
complainant and her family members and the date of
lending, it cannot be said that she had no capacity to lend
Rs.8,00,000/-.
11. Merely because the appellant -complainant has
not filed her income tax returns, it cannot be said that the
said amount received by her under registered sale deed
cannot be said to be unaccounted money. Considering all
these aspects, the respondent -accused has failed to rebut
the presumption drawn under Section 139 of the N.I Act.
12. The Hon'ble Apex Court in the case of Rajesh
Jain Vs Ajay Singh4 has observed as under
Reported in AIR Online 2023 SC 807
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"55. As rightly contended by the appellant,
there is a fundamental flaw in the way both the
Courts below have proceeded to appreciate the
evidence on record. Once the presumption
under Section 139 was given effect to, the Courts
ought to have proceeded on the premise that the
cheque was, indeed, issued in discharge of a
debt/liability. The entire focus would then
necessarily have to shift on the case set up by the
accused, since the activation of the presumption
has the effect of shifting the evidential burden on
the accused. The nature of inquiry would then be
to see whether the accused has discharged his
onus of rebutting the presumption. If he fails to
do so, the Court can straightaway proceed to
convict him, subject to satisfaction of the other
ingredients of Section 138. If the Court finds that
the evidential burden placed on the accused has
been discharged, the complainant would be
expected to prove the said fact independently,
without taking aid of the presumption. The Court
would then take an overall view based on the
evidence on record and decide accordingly."
In view of the above decision of the Hon'ble Apex
Court, if the accused has failed to discharge his onus of
rebutting the presumption, the Court has to straight away
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proceed to convict him for offence punishable under
Section 138 of the N.I Act subject to satisfaction of other
ingredients of Section 138 of the N.I Act.
13. The Hon'ble Apex Court in the case of
Kalamani tex and Another Vs P. Balasubramanian5
has held as under
"13. Adverting to the case in hand, we find on
a plain reading of its judgment that the trial Court
completely overlooked the provisions and failed to
appreciate the statutory presumption drawn under
Section 118 and Section 139 of NIA. The Statute
mandates that once the signature(s) of an accused
on the cheque/negotiable instrument are
established, then these 'reverse onus' clauses
become operative. In such a situation, the
obligation shifts upon the accused to discharge the
presumption imposed upon him. This point of law
has been crystalized by this Court in Rohitbhai
Jivanlal Patel v. State of Gujarat in the following
words:
"18. In the case at hand, even after
purportedly drawing the presumption under
Reported in (2021) 5 SCC 283
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Section 139 of the NI Act, the trial court
proceeded to question the want of evidence
on the part of the complainant as regards the
source of funds for advancing loan to the
accused and want of examination of relevant
witnesses who allegedly extended him money
for advancing it to the accused. This approach
of the trial court had been at variance with
the principles of presumption in law. After
such presumption, the onus shifted to the
accused and unless the accused had
discharged the onus by bringing record such
facts on circumstances as to show the
preponderance of probabilities tilting in his
favour, any doubt on the complainant's case
could not have been raised for want of
evidence regarding the source of funds for
advancing loan to the appellant- accused."
14. In the case on hand, even after purportedly
drawing the presumption under Section 139 of the N.I Act,
the trial Court proceeded to question the want of evidence
on the part of the complaint as regards the source of funds
for advancing loan to the accused. The approach of the
trial Court is not proper and correct. Merely because the
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appellant -complainant and her husband lent money to
different persons, it cannot be said that they are doing
money lending business. In the case on hand there is no
any averments regarding charging of any interest on the
amount lent by the appellant -complainant to the
respondent -accused. Without considering all these
aspects in proper perspective, the learned Magistrate has
erred in passing the judgment of acquittal of the
respondent -accused for offence punishable under Section
138 of the N.I Act by impugned judgment.
15. The said judgment of acquittal passed by the
trial Court is perverse. Considering the other aspects, the
appellant -complainant has satisfied all ingredients of
Section 138 of N.I Act. The notice of the dishonour of
cheque has been issued within statutory period. The said
notice has been served on the respondent -accused. The
respondent -accused has not paid cheque amount within
statutory period. The appellant -complainant has filed the
complaint within statutory period from the date of cause of
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action. The respondent -accused requires to be convicted
for offence punishable under Section 138 of N.I Act.
16. In the result, the following
ORDER
i) The appeal is allowed.
ii) The impugned judgment of acquittal dated
18.11.2013 passed in C.C.No.440/2009 by the
III Additional Civil Judge and J.M.F.C.,
Shivamogga acquitting the respondent -
accused for offence punishable under Section
138 of the N.I Act is set aside.
iii) The respondent -accused is convicted for
offence punishable under Section 138 of the N.I
Act and he has been sentenced to pay fine of
Rs.8,10,000/- and in default of payment of said
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fine amount he shall undergo simple
imprisonment for a period of 06 months.
iv) Out of the fine amount Rs.8,00,000/- is
ordered to be paid as compensation to the
appellant -complainant.
v) The respondent -accused shall deposit the said
fine amount within 02 months from this day.
Sd/-
(SHIVASHANKAR AMARANNAVAR)
JUDGE
DSP
