Karnataka High Court

M/S Institute Of Language vs Himaja Educational Institutions on 24 February, 2025

Author: Shivashankar Amarannavar

Bench: Shivashankar Amarannavar

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                                                               NC: 2025:KHC:8026
                                                          CRL.A No. 1280 of 2015




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                          DATED THIS THE 24TH DAY OF FEBRUARY, 2025

                                             BEFORE
                      THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR


                               CRIMINAL APPEAL NO. 1280 OF 2015


                      BETWEEN:


                      M/S. INSTITUTE OF LANGUAGE
                      MANAGEMENT PVT.LTD.,
                      HAVING ITS REGISTERED OFFICE
                      AT NO.48/49/50,
                      "ASHOK PLAZA"
                      3RD FLOOR, GANDHI BAZAAR MAIN ROAD
                      BASAVANAGUDI
                      BANGALORE-560 004
                      REPRESENTED BY ITS
Digitally signed by
LAKSHMINARAYANA       AUTHORISED REPRESENTATIVE
MURTHY RAJASHRI
Location: HIGH        MR. A. GHOUSE PASHA
COURT OF
KARNATAKA


                                                                    ...APPELLANT


                      (BY SMT. VIDYA R. GOWDA, ADV. FOR
                         SRI. G.B. SHARATH GOWDA, ADVOCATE)
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                                              NC: 2025:KHC:8026
                                         CRL.A No. 1280 of 2015




AND:



1.    HIMAJA EDUCATIONAL INSTITUTIONS
      K.N.ROAD, PUTTUR
      CHITTOOR DISTRICT-517 583
      REPRESENTED BY ITS CHAIRMAN
      MR.M.SURENDRA RAJU


2.    MR.M.SURENDRA RAJU
      CHAIRMAN
      HIMAJA EDUCATIONAL INSTITUTIONS
      K.N.ROAD, PUTTUR-517583
                                                ...RESPONDENTS
(BY SRI. D.R.P. BABU, ADV.)


       THIS CRL.A. IS FILED U/S.378(4) OF CR.P.C PRAYING TO
SET ASIDE THE JUDGMENT DATED 14.09.2015 PASSED BY THE
XXV     A.C.M.M.,   BANGALORE       IN   C.C.NO.15561/2012    -
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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                                               NC: 2025:KHC:8026
                                        CRL.A No. 1280 of 2015




CORAM:     HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR


                      ORAL JUDGMENT

This appeal is filed by the complainant challenging the

judgment of acquittal dated 14.09.2015 passed in

C.C.No.15561/2012 by the XXV Additional Chief Metropolitan

Magistrate, Bengaluru, whereunder the respondents have been

acquitted for offence under Section 138 of the Negotiable

Instruments Act, 1881 (hereinafter referred to as 'N.I. Act', for

short).

2. The case of the complainant in brief is as under:

The complainant is into business of conducting training

sessions/workshops in communicative English to students of

various schools throughout Southern India. The complainant

had entered into a Memorandum of Understanding dated

28.03.2011 with the first accused - Institution for conducting

workshop of spoken English to students of Himaja Educational

Institution at Puttur, Jems English Medium School, Puttur,

Himaja Bala Saraswarthi School, Nindra Himaja International

Concept School, Nagari and Himaja Degree College,

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Kalyanpuram, Puttur, Chittoor District. As per the agreement,

the project was to cover 2900 students and the fee agreed

upon for each student was Rs.300/- for the academic year i.e.,

duration of not more than eight months. The total amount of

the project was Rs.8,70,000/- payable in three installments

i.e., the first installment comprising of 50% of the agreed sum

to be paid in June 2011, second installment comprising 25% to

be paid in the month of September, 2011 and third installment

comprising of remaining 25% to be paid in the month of

December, 2011. The complainant had started the project

successfully though the accused did not pay the installment

amount. However, during September 2011, the accused

requested the complainant for rescheduling the payments and

had requested for six installments to pay the balance amount.

The complainant had offered to accused three installments to

clear the balance amount. But the accused did not adhere to

three installments and in order to reduce cost of the project,

the accused had chosen for three faculties and further reduced

the faculty to two and off late demanded three faculties. Later,

everything was set in place after mutual discussion between

the accused and the complainant and in the mutual discussion,

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the number of students was reworked to 1574 instead of 2900

and the amount was mutually agreed to Rs.3,94,960/-

regarding 1574 students as against the original Rs.8,70,000/-

for 2900 students. In pursuance of the mutual discussion, the

accused addressed a final settlement letter dated 19.12.2011

acknowledging total project cost as Rs.3,94,360/- and after

deducting Rs.3,00,000/-, which was already paid, the accused

issued a post dated cheque in favour of the complainant for

Rs.94,360/- dated 10.02.2012 bearing No.689397 drawn on

State Bank of India, Puttur agreeing to complete the rest of the

project with two faculties. On presentation of the said cheque

for collection, the same has returned dishonored for reason

"funds insufficient" vide memo dated 13.02.2012. The

complainant got issued legal notice dated 27.02.2012. Inspite

of service of notice, the accused failed to make payment of the

cheque amount. Therefore, the complainant has filed a private

complaint against the respondent - accused for offence under

Section 138 of the N.I. Act. The learned Magistrate has taken

cognizance and registered C.C.No.15561/2012 against the

respondent - accused Nos.1 and 2 for offence under Section

138 of the N.I. Act. The complainant in order to prove his case,

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has examined one witness as PW.1 and got marked Exs.P1 to

P10. Exs.D1 and D2 are marked in the cross-examination of

PW.1. The statement of the accused has been recorded under

Section 313 of Cr.P.C. The evidence was not led by the

accused. The learned Magistrate after hearing the arguments

of both sides, has formulated points for consideration and

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 respondents.

4. The learned counsel for the appellant would contend

that the respondent - accused has admitted the signature on

cheque - Ex.P4 and its liability to pay sum of Rs.94,360/-

under letter - Ex.P3. Therefore, the presumption under Section

139 of the N.I. Act requires to be drawn. He further submits

that the said presumption has not been rebutted by the

respondent - accused. Without considering this aspect, the

learned Magistrate has swayed away by the admissions given

by PW.1 in his cross-examination and erred in acquitting the

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respondent - accused. With this, she prayed for allowing the

appeal and convicting the respondent - accused for offence

under Section 138 of N.I. Act.

4. The learned counsel for the respondents would

contend that PW.1 in his cross-examination has admitted that

two faculties not worked for March and April, 2012 and

cheque - Ex.P4 has been issued for making payment regarding

March and April, 2012. He further submits that the cheque

issued is a post dated cheque and it is issued under letter dated

19.12.2011 which is at Ex.P3, whereas the complainant did not

complete the assignment inspite of issuing two letters which

are at Exs.D1 and D2. There is no liability on the part of the

respondent - accused to pay the cheque amount. He further

submits that as the work assigned is not carried out, the post

dated cheque cannot be held to have been drawn for

existing debt or liability. On that point, he placed reliance upon

the decision of the Hon'ble Apex Court in the case of Indus

Airways Private Limited and Others vs. Magnum Aviation

Private Limited and another reported in

(2014) 12 SCC 539. He further submits that considering all

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these aspects, the learned Magistrate has rightly acquitted the

respondent - accused. With this, he prayed for dismissal of the

appeal.

5. Having heard the learned counsels, this Court has

perused the impugned judgment and Trial Court records.

6. 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 N.I. Act?"

7. My answer to the above point is in Negative for the

following reasons:

The parties entering into Memorandum of Understanding

dated 28.03.2011 as per Ex.P2 is not in dispute. The terms of

the said Memorandum of Understanding have been modified in

discussion between the complainant and the accused and the

settlement was arrived at on 19.12.2011 which is at Ex.P3. As

per terms of Ex.P3, a total amount payable is Rs.3,94,360/-

and the respondent - accused had paid Rs.3,00,000/- and

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balance payable is Rs.94,360/-. The said balance amount of

Rs.94,360/- is payable for two faculties till end of academic

year. For making payment of the said amount of Rs.94,360/-, a

post dated cheque has been issued by the respondent -

accused and the same has been mentioned in Ex.P3. The said

post dated cheque is at Ex.P4. It is the case of the appellant -

complainant that they have completed their assignment as per

settlement arrived at Ex.P3 and therefore, the respondent -

accused is liable to pay the amount of cheque - Ex.P4. PW.1 in

his cross-examination has admitted that the Memorandum of

Understanding is for academic year and the said academic year

commences on 28.03.2011 and ends, on 23.04.2012. PW.1

has admitted in his cross-examination that from 19.12.2011

they have sent two staff to the Institution of accused and the

said two staff were taken back during March 2012. PW.1 has

further admitted that during March and April, 2012 no staff of

appellant worked in the Institution of accused. PW.1 has

further admitted that the cheque amount of Ex.P4 pertains to

March and April, 2012. When PW.1 himself has admitted that

they have not done the work for March and April, 2012 they are

not entitled for any amount for the said two months.

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Cheque - Ex.P4 has been issued as a post dated cheque under

letter Ex.P3 for making payment for March and April, 2012 as

admitted by PW.1, whereas the complainant has not sent staff

to the accused - Institution for March and April, 2012. There is

no liability on the part of the respondent -accused to make

payment of amount of cheque - Ex.P4. Therefore, the learned

Magistrate has rightly held that Ex.P4 - cheque has not been

issued for making payment of liability. Considering the said

aspect, the learned Magistrate has rightly acquitted the

respondent - accused for offence under Section 138 of the N.I.

Act.