Karnataka High Court
Sri. K.B. Laxmikanth vs Smt. Shamantakamani on 17 February, 2025
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
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CRL.A No. 1221 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 17TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL APPEAL NO. 1221 OF 2015
BETWEEN:
SRI. K.B. LAXMIKANTH
S/O LATE SRI BOREGOWDA
AGED ABOUT 53 YEARS
MS BOREGOWDA COMPLEX
VIRAJPET - 571 218
...APPELLANT
(BY SRI. RAMESH P. KULKARNI, ADVOCATE)
AND:
SMT. SHAMANTAKAMANI
D/O MR. RANGADAS
AGED ABOUT 56 YEARS
NO.4, KEERTANA FARM
Digitally signed by
HEMAVATHY NEAR VARUNANALA CHANNEL
GANGABYRAPPA
OLD KESARE, K R MILL
Location: HIGH COURT
OF KARNATAKA MYSORE - 570 001
...RESPONDENT
(BY SRI. KRISHNAMURTHY G. HASYAGAR, ADV. - [VC])
THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO
SET ASIDE THE JUDGEMENT AND ORDER DATED 25.7.2015
PASSED BY THE CIVIL JUDGE AND J.M.F.C, VIRAJPET IN
C.C.NO. 652/2012 - ACQUITTING THE RESPONDENT/ACCUSED
FOR THE OFFENCE P/U/S 138 OF N.I ACT.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
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CRL.A No. 1221 of 2015
CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR
ORAL JUDGMENT
This appeal is filed by the complainant challenging
the judgment of acquittal dated 25.07.2015 passed in
C.C.No.652/2012 by the Civil Judge and J.M.F.C., at
Virajpet, whereunder the respondent - accused has been
acquitted for offence under Section 138 of Negotiable
Instruments Act, 1881.
2. The brief facts of the complainant's case are as
under:
The complainant is acquainted with the husband of
the accused at K.R. Nagar for the past few years. The
accused is the owner of Atithi Aradhana resort situated at
Keerthana farm, Old Kesare, K.R.Mill, Mysore running
lodging, bar and restaurant. The complainant was doing a
business of lodging and bar at Virajpet. The complainant
and accused entered into a lease agreement on
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29.05.2010 and as per terms of the said lease agreement,
the complainant had paid a sum of Rs.8,00,000/- as
security deposit and agreed to pay daily rent of
Rs.6,000/-. The complainant was permitted to add the
required furniture at his own cost with the consent of the
accused and complainant has to furnish the details of
expenditure incurred to the accused and accused after
expiry of the lease period shall compensate the
complainant. The complainant has carried out the
business in the leased premises and also renovate the
premises by incurring Rs.6,07,000/- which was due to be
paid by the accused. The complainant carried out the
business in a leased premise from June 2010 and due to
poor business requested the accused to cancel the lease
and cancellation agreement was entered on 14.12.2010.
As per this agreement, the accused agreed to refund the
security deposit of Rs.8,00,000/- and issued five cheques
bearing Nos.465401 to 465405 dated 25.05.2011 to
29.05.2011 for a sum of Rs.1,60,000/- each drawn on
Vijaya Bank, Sayyaji Rao Road, Mysore branch. Then, the
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complainant in the month of May 2011, when he suppose
to present the said cheques, the accused requested for
extension of time for three months. Therefore, the
complainant presented the said cheques on 24.10.2011
through his banker Canara Bank, Virajpet and those
cheques were returned with an endorsement as
'insufficient funds' on 26.10.2011. The complainant got
issued legal notice on 03.11.2011 and it was served on the
respondent - accused on 04.11.2011 for which the
accused sent a reply. The claim of the accused in reply
notice alleging that a settlement was made on 05.06.2011
through their well wishers and friends and a settlement
was arrived for Rs.6,07,000/- after deduction of rent and
have received Rs.5,00,000/- and the complainant had
written shara in kannada acknowledging the same is false.
The said amount has nothing to do with the cheque issued
and same was towards renovation, fixtures and fittings
made to the leased premises. The complainant filed a
private complaint against the respondent - accused for
offence under Section 138 of the N.I. Act. The learned
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Magistrate has taken cognizance and registered
C.C.No.652/2012 for offence under Section 138 of the N.I.
Act. The complainant in order to prove his case has
examined himself as PW.1 and got marked Exs.P1to P15.
The complainant also examined one witness PW.2 and got
marked Exs.P16 to P18 - bills. The statement of the
accused has been recorded under Section 313 of Cr.P.C.
The accused got examined one witness as DW1 and got
marked Exs.D1 and D2. The said exhibits are marked in
the cross-examination of PW.1. The learned Magistrate
after hearing arguments on both sides has passed the
impugned judgment of acquittal. The said judgment of
acquittal has been challenged by the
appellant - complainant in this appeal.
3. Heard the learned counsel for the appellant and
the learned counsel for the respondent.
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4. Learned counsel for the appellant would
contend that the respondent - accused has admitted his
signatures on five cheques - Exs.P1 to P5 and also
admitted that they are issued towards payment of security
deposit under lease cancellation deed dated 14.12.2010.
The respondent - accused has agreed to honour the said
cheques and the details of those cheques are stated in
Ex.D2 - cancellation of lease agreement deed. He further
submits that the endorsement made on the last page of
Ex.D2 which is at Ex.D2(a) is with regard to the amount of
renovation done by the complainant in the leased
premises and it has nothing to do with the refund of the
security deposit. He contend that security deposit is
Rs.8,00,000/- and renovation charge is Rs. 6,07,000/-.
The evidence of PW.2 established that complainant got
done renovation work for Rs.6,07,000/-. The respondent -
accused has not denied the complainant getting renovation
work done in the leased premises. He further submits that
in lease agreement - Ex.D1, there is a clause that the
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respondent - accused i.e., lessor has to compensate to
lessee i.e., complainant regarding additional expenditure
incurred towards the extra or additional furniture, fittings
and fixtures. He further submits that the
respondent - accused has not entered the witness box to
suppress the real aspects. The evidence on record will
establish that the five cheques have been issued for
making payment of security deposit of Rs.8,00,000/- and
they are dishonoured and therefore, the respondent -
accused has committed offence under Section 138 of the
N.I. Act. Without considering these aspects, the learned
Magistrate has swade away by the endorsement on Ex.D2
and erred in passing the impugned judgment of acquittal.
With this, he prayed to allow the appeal and convict the
respondent - accused for offence under Section 138 of the
NI Act.
5. Learned counsel for the respondent would
contend that after receipt of legal notice, the respondent -
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accused has got issued reply to the said legal notice as per
Ex.P12, wherein in paragraph No.5, he has taken specific
decision of she having paid Rs.5,00,000/- towards security
deposit and agreed to pay remaining amount of
Rs.1,07,000/- as per settlement arrived at in the presence
of well-wishers and friends. The said defense has been put
to the PW.1 in the cross-examination who has admitted
regarding he making endorsement on the back of Ex.D2 as
per Ex.D2(a). Considering the said endorsement as per
Ex.D2(a), the learned Magistrate has rightly held that the
cheques are not issued for discharge of the liability and
rightly acquitted the respondent - accused by a reasoned
judgment. With this, he prayed to dismiss the appeal. The
learned counsel for the respondent further submits that
there is no reference to renovation charges in notice -
Ex.P11 got issued by the appellant - complainant.
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6. Having heard the learned counsels, the Court
has perused the impugned judgment and Trial court
records.
7. Considering the grounds urged, the following
point arises for consideration:
"Whether the learned Magistrate has erred in
acquitting the respondent - accused for offence
under Section 138 of the N.I. Act?"
8. My answer to the above point is in Affirmative
for the following reasons:
9. It is not in dispute that the respondent is a
lessor and the appellant - complainant is a lessee of the
bar and restaurant by name Atithi Aradhana resort under
agreement of lease dated 29.05.2010. It is also not in
dispute that complainant / lessee has paid security deposit
of Rs.8,00,000/- and the same is mentioned in Ex.D1 -
agreement of lease. It is also not in dispute that there was
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cancellation of the said lease agreement by cancellation
deed dated 14.12.2010. The copy of which is at Ex.D2. It
is also not in dispute that under cancellation deed - Ex.D2,
the respondent - accused has agreed to repay secutity
deposit of Rs.8,00,000/- to the appellant - complainant
and issued five cheques of Rs.1,60,000/- each. The
liability of the respondent - accused to repay the security
deposit of Rs.8,00,000/- has been established as per the
terms of cancellation of lease deed dated 14.12.2010
which is at Ex.D2. Exs.P1 to P5 are the said five cheques,
which are mentioned in Ex.D2 - cancellation deed issued
towards repayment of security deposit to the complainant
by the accused.
10. It is the specific defense of respondent accused
in Ex.P12 - reply notice that there was settlement of the
matter through well wishers and friends and as per that
settlement, she has paid Rs.5,00,000/- and agreed to pay
remaining Rs.1,07,000/- and there is a shara written by
the complainant on cancellation deed dated 14.12.2010.
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The said cancellation deed - Ex.D2 contains shara that
Rs.5,00,000/- is paid by the accused to the complainant
on 05.06.2011 and agreed to pay balance of Rs.1,07,000/-
in due course to the complainant. The said shara is
marked at Ex.D2(a). It is the contention of the
complainant that the said amount of Rs.5,00,000/- plus
Rs.1,07,000/- is towards renovation charges got done by
the complainant. PW.2 is a witness examined on behalf of
the complainant, he has deposed regarding he has done
the work of renovation in the leased premises amounting
to Rs.6,07,000/-. There is no suggestion to PW.2
regarding not doing any renovation work in the leased
premises at the expenses of the complainant. Even there
is no suggestion in cross-examination of PW.1 that the
complainant had not got done any renovation work worth
Rs.6,07,000/-. Under lease agreement - Ex.D1, clause 7,
reads thus:
"7. It is also agreed between the parties to this
agreement that the Lessees are at liberty to
make any renovation, alteration etc., which may
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absolutely be required to do in the schedule
premises to carry on the business smoothly. The
lessees may add the required furniture, fixtures,
fittings etc., at his own cost with the consent of
the lessor. The lessees shall furnish the details
of such expenditure incurred to the lessor. On
the expiry of the lease period the lessor shall
compensate the lessee on such additional
expenditure incurred towards the extra or
additional furniture, fittings and fixtures."
11. As per the above said clause, complainant -
lessee is at liberty to renovate and alter the premises at
his own cost by putting up furniture, fixtures, fittings etc.,
and on the expiry of the lease period, the lessor shall
compensate the lessee on such additional expenditure
incurred towards the extra or additional furniture, fittings
and fixtures. The respondent - accused has not disputed
that complainant - lessee having got done at his expenses
the said renovation work by PW.2. The evidence of PW.2
will establish that he has done the renovation and
alteration work in the leased premises at the request of
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the complainant worth Rs.6,07,000/-. The accused has
not entered the witness box to put forth her defence
regarding the settlement of security deposit in a sum of
Rs.6,07,000/- in the presence of well-wishers and friends.
The accused has also not examined his friends and well-
wishers who were present at the time of settlement.
DW.1, who is witness to the endorsement
Ex.D2(a) and signed as per Ex.D2(c) has deposed that out
of Rs.8,00,000/- to be paid by the accused to the
complainant, a sum of Rs.5,00,000/- is paid on the date of
cancellation deed and remaining amount of Rs.1,93,000/-
has been adjusted towards arrears of the rent and
remaining amount is paid through one cheque. The said
averments are not forthcoming in Ex.D2. The said DW.1 is
not witness to Ex.D2 - cancellation deed and witnesses
which have signed as witness Nos.1 and 2 are difference
persons. What PW.2 is stated in cross-examination is that
out of Rs.6,07,000/- which is due has been paid by cash in
a sum of Rs.5,00,000/- and for remaining amount, the
cheque has been issued. The evidence of DW.1 does not
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establish that what is paid in a sum of Rs.5,00,000/- by
cash is towards security deposit.
12. Learned counsel for the respondent contended
that the endorsement - Ex.D2(a) contains the term
'mungada hana' that is advance amount.
13. Learned counsel for the appellant contends that
the term 'mungada hana' has been written by mistake.
The total security deposit amount agreed to be paid under
Ex.D2 - cancellation deed is Rs.8,00,000/- and for making
payment of the same five cheques which are at Exs.P1 to
P5 are issued. The respondent - accused has not placed
on record that the payment of Rs.8,00,000/- has been
settled for Rs.6,07,000/- and considering the same, the
endorsement Ex.D2(a) appears to be not towards
repayment of the security amount. Therefore, the
respondent - accused has failed to establish that he has
paid part of security amount and there was settlement for
payment of security amount for Rs.6,07,000/- as against
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Rs.8,00,000/-. Therefore, the defence put forth by the
respondent - accused appears to be not true. Considering
the contents of the Exs.D1 and D2 and the cheques -
Ex.P1 to P5, the appellant - complainant has established
that the said cheques are issued for making payment of
security deposit. The said cheques are dishonoured for
want of funds. The complainant has issued legal notice
within a statutory period. The respondent - accused has
not paid the amount of the said five cheques, within the
statutory period. The appellant - complainant represented
the complaint within statutory period.
14. Considering all these aspects, the learned
Magistrate ought to have convicted the respondent -
accused for offence under Section 138 of the N.I. Act. The
appellant - complainant has made out case for setting
aside the impugned judgment of acquittal and to convict
the respondent - accused for offence under Section 138 of
the N.I. Act. In the result, the following:
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ORDER
i) The appeal is allowed;
ii) The impugned judgment dated 25.07.2015
passed in C.C.No.652/2012 by the Civil Judge
and J.M.F.C., Virajpet is set aside;
iii) The respondent - accused is convicted for
offence under Section 138 of the N.I. Act and
she is sentenced to pay fine of Rs.8,10,000/-
(Rupees Eight Lakhs ten thousand only) and in
default of payment of the said fine amount to
undergo simple imprisonment for six months;
iv) Out of the fine amount, a sum of Rs.8,00,000/-
(Rupees Eight Lakhs only) is ordered to be paid
as compensation to the appellant - complainant.
The respondent - accused shall deposit the said
fine amount, within two months from this day.
Sd/-
(SHIVASHANKAR AMARANNAVAR)
JUDGE
KG
