Karnataka High Court
Sri C K Mylaraiah vs Smt Dakshayanamma on 24 February, 2025
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CRL.RP No. 627 of 2017
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF FEBRUARY, 2025
BEFORE
THE HON'BLE MR JUSTICE S RACHAIAH
CRIMINAL REVISION PETITION NO. 627 OF 2017
BETWEEN:
SRI C K MYLARAIAH
S/O KALASAIAH
AGED ABOUT 40 YEARS,
R/AT SALPARA BEEDI, C.N.HALLI TOWN
TUMKUR DISTRICT
...PETITIONER
(BY SRI. K S JAYASIMHA, ADVOCATE)
AND:
SMT. DAKSHAYANAMMA
W/O LATE GANGARAMAIAH
AGED ABOUT 45 YEARS
R/AT HALLIKAR BEEDI
C.N HALLI TOWN, TUMKUR DIST
...RESPONDENT
(BY SRI. MANJE GOWDA B V, ADVOCATE FOR
Digitally SRI. K A CHANDRASHEKARA, ADVOCATE)
signed by
NARAYANA
UMA THIS CRL.RP IS FILED U/S.397 R/W 401 CR.P.C PRAYING TO
Location: SET ASIDE THE JUDGMENT OF CONVICTION AND SENTENCE DATED
HIGH COURT
OF 23.03.2015 IN C.C.NO.201/2010 PASSED BY THE PRL. CIVIL JUDGE
KARNATAKA AND JMFC, CHIKKANAYAKANAHALLI WHICH WAS CONFIRMED BY
THE V ADDITIONAL DISTRICT AND SESSIONS JUDGE, TIPTUR IN
CRL.A.NO.10013/2015 DATED 19.04.2017.
THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED ON 17.02.2025, COMING ON FOR PRONOUNCEMENT
OF ORDER, THIS DAY, THE COURT MADE THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE S RACHAIAH
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CAV ORDER
This Criminal Revision Petition is filed by the petitioner,
being aggrieved by the judgment of conviction and order on
sentence dated 23.03.2015 in C.C.No.201/2010 on the file of
the Prl. Civil Judge and J.M.F.C., Chikkanayakanahally and its
confirmation judgment and order dated 19.04.2017 passed in
Crl.A.No.10013/2015 on the file of V Addl. District and Sessions
Judge, Tiptur seeking to set aside the concurrent findings
recorded by the Courts below, wherein the petitioner/accused
was convicted for the offence punishable under Section 138 of
Negotiable Instrument Act, 1881 (for brevity, N.I.Act).
2. The ranks of the parties henceforth will be
considered as per their rankings before the Trial Court for
convenience.
3. Heard Sri.K.S.Jayasimha., learned counsel for the
petitioner and Sri. Manjegowda B.V., for Sri. K.A.
Chandrashekar, learned counsel for the respondent.
4. It is the submission of the learned counsel for the
petitioner that the petitioner has not borrowed any amount
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from the complainant at any point of time. In fact, the cheque
had been given to the husband of the complainant as he had
owed to a sum of Rs.1,000/-. He further submitted that the
complainant materially altered the cheque and inserted two
zeros and made it as Rs.1,00,000/- and presented for
encashment which does not carry any liability as the said
negotiable instrument is materially altered.
5. It is further submitted that the financial capacity of
the complainant has not been established in the case. Though
the complainant has stated that she used to grow areca nut
and the same being sold to the accused, the fact remains that
there are some contradictions and omissions occurred in her
evidence regarding growing of areca nuts. Even though, the
accused has established that he had not purchased any areca
nut from the complainant, the Courts below have failed to
appreciate the same.
6. It is further submitted that though the accused has
rebutted the presumption, the burden to prove the case of the
complainant has not been shifted in order to secure the ends of
justice, interference with the findings of the Courts below is
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necessary. Making such submissions, the learned counsel for
the petitioner prays to allow the petition.
7. Per contra, the learned counsel for the respondent
vehemently submitted that the findings of the Courts below in
respect of presumption is relevant and proper. In fact, the
cheque and the signature have been admitted by the accused.
Once it is admitted, the presumption has to be raised. Though
the said presumption is rebuttable in nature, the accused has
not raised any grounds to rebut the presumption. Mere denial
of transaction would not be sufficient to rebut the presumption.
8. It is further submitted that the evidence of P.W.2 would
indicate that the cheque has been returned not on the basis of
material alteration but it is for insufficient funds. In case, if the
cheque is returned on the basis of material alteration,
obviously, the complaint would not have been maintained. In
the absence of evidence in respect of material alteration, it is
not safe to arrive at a conclusion to that effect. Moreover, the
cheque and signature have been admitted by the petitioner and
no reply was given by the petitioner/accused. Therefore,
findings of the Courts below are appropriate and proper and
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interference may not be necessary. Making such submissions,
the learned counsel for the respondent prays to dismiss the
petition.
9. Having heard the learned counsel for the respective
parties and perused the findings of the Courts below, it appears
that the Trial Court and the Appellate Court have concurrently
held that the complainant has proved the case and the
presumption as stipulated under Section 139 of N.I. Act has
also been raised successfully and opined that the petitioner is
liable to pay the cheque amount.
10. Before adverting to the facts of the case, it is
relevant to refer the judgment of the Hon'ble Supreme Court
for clarity in respect of N.I. Act. The Hon'ble Supreme Court in
the case of Tedhi Singh Vs Narayan Das Mahant reported
in (2022) 6 SCC 735, held in paragraph No.10 as under:
"10. The trial court and the first appellate court
have noted that in the case under Section 138 of
the NI Act the complainant need not show in the
first instance that he had the capacity. The
proceedings under Section 138 of the NI Act is not
a civil suit. At the time, when the complainant
gives his evidence, unless a case is set up in the
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reply notice to the statutory notice sent, that the
complainant did not have the wherewithal, it
cannot be expected of the complainant to initially
lead evidence to show that he had the financial
capacity. To that extent, the courts in our view
were right in holding on those lines. However, the
accused has the right to demonstrate that the
complainant in a particular case did not have the
capacity and therefore, the case of the accused is
acceptable which he can do by producing
independent materials, namely, by examining his
witnesses and producing documents. It is also
open to him to establish the very same aspect by
pointing to the materials produced by the
complainant himself. He can further, more
importantly, achieve this result through the cross-
examination of the witnesses of the complainant.
Ultimately, it becomes the duty of the courts to
consider carefully and appreciate the totality of the
evidence and then come to a conclusion whether in
the given case, the accused has shown that the
case of the complainant is in peril for the reason
that the accused has established a probable
defence."
11. On careful reading of the dictum of the Hon'ble
Supreme Court, it makes it clear that in a case under
Section 138 of N.I. Act, the complainant need not show at
the first instance that he had a financial capacity to lend the
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loan. On the other hand, it is the accused who has to
demonstrate that he had not issued a cheque for any other
liability or debt by leading acceptable evidence.
12. Having considered the principles laid down by the
Hon'ble Supreme Court, now it is relevant to refer the facts
of the case along with the relevant evidence. It is the case of
the complainant that she was growing areca nut and also
doing areca nut business. According to her, the accused had
purchased 10 quintal of areca nut from her. Each quintal of
areca nut was sold at the rate of Rs.10,000/. The accused
had to pay Rs.1,00,000/- as a sale consideration.
13. On 28.01.2010, the accused had issued a cheque
for the said amount. When it was presented for encashment,
it was dishonored with a shara "funds insufficient".
Therefore, a complaint was filed after having followed the
stipulated procedure.
14. The complainant has examined herself as P.W.1 and
also got examined another witness as P.W.2. The evidence of
P.W.1 would disclose that she has reiterated the averments of
the complaint in her evidence. Though, there are some
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suggestions made to her that she had no financial capacity and
she was not made any transaction with the accused, it was
denied by her. The learned counsel for the accused mainly
contended that the cheque was issued to the husband of P.W.1
and it was written a sum of Rs.1,000/-. However, it was
materially altered and two zeros were added and made it as
Rs.1,00,000/-. Further he claimed that since the cheque has
been materially altered, no liability would be fastened on the
said cheque.
15. Having considered the submission, it is needless to
say that on perusal of the cheque, it can be seen that two zeros
were inserted in the box of the cheque. The said alteration has
also been corroborated by the evidence of P.W.2.
16. Now it is relevant to refer Section 87 of the N.I. Act
which reads as under:
"87.Effect of material alteration.- Any material
alteration of a negotiable instrument renders the same
void as against any one who is a party thereto at the time
of making such alteration and does not consent thereto,
unless it was made in order to carry out the common
intention of the original parties.
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Alteration by indorsee.- And any such alteration, if
made by an indorsee, discharges his indorser from all
liability to him in respect of the consideration thereof.
The provisions of this section are subject to those
of sections 20, 49, 86 and 125."
17. On careful reading of the aforesaid provisions, it makes
it clear that if any alteration is made on the instrument without
consent of the promisee, such instrument becomes void.
Therefore, the liability on such instrument would not arise. In
the present case, as the accused has proved that cheque has
been materially altered by inserting two zeroes and the same
has been admitted by the bank manager, the findings of the
Courts below in rendering the conviction would be rendered
unsustainable. Therefore, the conviction is liable to be set
aside.
18. In the light of the observation made above, I
proceed to pass the following:
:ORDER:
(i) The Criminal Revision Petition is allowed.
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(ii) The judgment of conviction and order on
sentence, dated 23.03.2015 passed in
C.C.No.201/2010 by the Prl. Civil Judge and
JMFC, Chikkanayakanahally and judgment and
order dated 19.04.2017 passed in Crl. A.
No. 10013/2015 by the learned V Additional
District & Sessions Judge, Tiptur are set aside.
(iii) The petitioner/accused is acquitted for the
offence under Section 138 of N.I.Act.
(iv) Bail bonds executed, if any, stand cancelled.
Sd/-
(S RACHAIAH)
JUDGE
JS
