Karnataka High Court
J. Nagaraj S/O Ayappa vs H.K. Shantaraj on 20 June, 2025
-1-
NC: 2025:KHC-D:7889
CRL.A No. 100299 of 2016
HC-KAR
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 20TH DAY OF JUNE, 2025
BEFORE
THE HON'BLE MR. JUSTICE RAJESH RAI K
CRIMINAL APPEAL NO.100299 OF 2016 (A)
BETWEEN:
J. NAGARAJ S/O. AYAPPA,
AGED ABOUT 60 YEARS,
OCC. AGRICULTURE,
R/O. HIRE JANTAKAL,
TALUK: GANGAVATHI,
DISTRICT: KOPPAL.
...APPELLANT
(BY SRI. MALLIKARJUNSWAMY B. HIREMATH, ADVOCATE)
AND:
H.K. SHANTARAJ S/O. CHOTA ANJIRAO,
AGED ABOUT 52 YEARS,
OCC. CONTRACTOR, R/O. BASAVADURGA,
YASHAVANT NOW AT HIRE JANTAKAL, TQ. GANGAVATHI,
NARAYANKAR
DISTRICT: KOPPAL.
Digitally signed by
YASHAVANT
NARAYANKAR ...RESPONDENT
Date: 2025.06.24
10:12:00 +0530 (BY SRI. GURUBASAVARAJ S.M., ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION
378(4) OF CR.P.C., PRAYING TO SET-ASIDE JUDGMENT IN
CRIMINAL APPEAL NO.12 OF 2013 DATED 24/8/2016 PASSED
BY THE DISTRICT AND SESSIONS JUDGE, KOPPAL AT KOPPAL
AND CONSEQUENTLY RESTORE THE JUDGMENT DATED
01/02/2013 PASSED BY THE PRINCIPAL CIVIL JUDGE AND
JUDICIAL MAGISTRATE FIRST CLASS, AT GANGAVATI IN
CRIMINAL CASE NO.509 OF 2008.
-2-
NC: 2025:KHC-D:7889
CRL.A No. 100299 of 2016
HC-KAR
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: THE HON'BLE MR. JUSTICE RAJESH RAI K
ORAL JUDGMENT
(PER: THE HON'BLE MR. JUSTICE RAJESH RAI K)
In this appeal, the appellant/complainant has
assailed the judgment of acquittal dated 24.08.2016 in
Crl.A.No.12/2013 passed by the District and Sessions
Judge, Koppal (hereinafter referred to as the 'First
Appellate Court'), whereby the First Appellate Court
allowed the appeal filed by the accused and acquitted him
for the offence punishable under Section 138 of the
Negotiable Instruments Act, 1881 (for short 'N.I. Act') by
setting aside the judgment of conviction and order on
sentence dated 01.02.2013 in C.C.No.509/2008 passed by
the Principal Civil Judge and JMFC, Gangavathi (hereinafter
referred to as the 'learned Magistrate').
2. For the sake of convenience, the parties are
referred to as per their rankings before the trial Court.
NC: 2025:KHC-D:7889
HC-KAR
3. The abridged facts of the case are as under:
The complainant and accused are known to each
other and in the year 2012, the accused borrowed a hand
loan of ₹1,10,000/- from the complainant and thereafter,
failed to repay the same. On repeated request made by
the complainant, the accused issued a cheque bearing
No.394071 drawn on Syndicate Bank, Gangavathi Branch
on 19.09.2012 for repayment of the loan amount of
₹1,10,000/- in favour of the complainant. Thereafter, the
complainant presented the said cheque for encashment
through his banker. However, the said cheque was
dishonored with an endorsement 'funds insufficient' on
24.09.2002. The said aspect was intimated by the
complainant to the accused by issuing legal notice dated
24.09.2002. Though the said notice was served on
accused, neither he replied nor repaid the loan amount.
Left with no other alternative, the complainant filed a
private complaint under Section 200 of Cr.P.C., against the
NC: 2025:KHC-D:7889
HC-KAR
accused before the learned Magistrate for the offence
punishable under Section 138 of the N.I. Act.
4. To prove the case before the trial Court, the
complainant himself examined as PW1 and marked 8
documents as Exs.P1 to P8. The accused also examined
himself as DW1 and also examined 2 witnesses on his
behalf as DW2 and DW3 so also marked 5 documents as
Ex.D1 to Ex.D5.
2. On assessment of oral and documentary
evidence, the learned Magistrate convicted the accused for
the offence punishable under Section 138 of the N.I. Act
and ordered as follows:
"ORDER
Acting U/sec.255(2) of Cr.P.C., accused
is convicted for an offence punishable
U/Sec.138 of Negotiable Instruments Act
and ordered to pay fine of Rs.1,10,000/-. In
default, he shall undergo simple
imprisonment for six months.
NC: 2025:KHC-D:7889
HC-KAR
Further, Acting U/sec. 357 of Cr.P.C.,
out of fine amount, office is ordered
Rs.1,00,000/- paid to the complainant as a
compensation."
3. Aggrieved by the same, the accused preferred
an appeal before the First Appellate Court in
Crl.A.No.12/2013.
4. On reassessment of the evidence on record, the
First Appellate Court allowed the appeal and set-aside the
judgment of conviction and order on sentence passed by
the learned Magistrate and acquitted the accused for the
offence punishable under Section 138 of the N.I. Act. The
said judgment of the First Appellate Court is under
challenge in this appeal.
5. Heard the learned counsel Sri.
Mallikarjunaswamy B Hiremath for the appellant-
complainant and the learned counsel Sri.Gurubasavaraj
S.M., for the respondent-accused.
NC: 2025:KHC-D:7889
HC-KAR
6. The primary contention of the learned counsel
for the appellant-complainant is that the First Appellate
Court, without appreciating the evidence on record in a
right perspective, has grossly erred in allowing the appeal
and setting aside the judgment of conviction and order on
sentence passed by the Trial Court. He contended that, to
prove the legally recoverable debt, the complainant
himself examined before the trial Court as PW1 and
marked 8 documents. In his evidence, he clearly stated
that the accused had approached him for hand loan of
₹1,10,000/- in the year 2012 and accordingly, he
advanced the loan amount of ₹1,10,000/- to the accused,
however, the accused failed to refund the same.
Thereafter, he issued a cheque in question in favour of the
complainant and on presentation of the same, the said
cheque was returned to the complainant with an
endorsement 'funds insufficient'. Thereafter, the
complainant issued a legal notice to the accused. Though
the legal notice was served on the accused, neither he
NC: 2025:KHC-D:7889
HC-KAR
replied nor repaid the loan amount to the complainant. It
is contended by the learned counsel that the complainant
has discharged the initial presumption arising under
Sections 118 and 139 of the N.I. Act and the same was
not rebutted by the accused by placing a probable
defence. He contended that, the lending capacity of the
complainant is also proved since it is admitted by the
accused that the complainant is a money lender and
owning finance in the name and style 'Yogi Finance'. In
such circumstances, the Trial Court has rightly convicted
the accused; however, the First Appellate Court misread
the evidence and acquitted the accused. Accordingly, he
prays to allow this appeal by setting aside the judgment
passed by the First Appellate Court.
7. Per contra, learned counsel for the respondent-
accused contended that the First Appellate Court, after
meticulously examining the evidence on record, has rightly
passed well reasoned judgment, which does not call for
interference at the hands of this Court. He contended that
NC: 2025:KHC-D:7889
HC-KAR
the accused has rebutted the initial presumption arising
under Sections 118 and 139 of the N.I. Act by placing a
probable defence by way of leading evidence of DWs.1 to
3. All these witnesses have consistently deposed that
DW3, who is the sister of the accused, had obtained a
hand loan of ₹40,000/- from the complainant in the year
2000 and for repayment of the same, she executed an
agreement of sale of her property as per Ex.D1. At that
time, the complainant insisted DW3 for issuing cheques as
security, for which DW3 approached the accused, who is
none other than her brother and requested him to open a
bank account in his name and obtain cheques to hand over
the same to the complainant as security. Accordingly, the
accused opened a bank account and obtained cheque
book. From the said cheque book, 10 cheque leaves were
given to the complainant by the accused as a security.
Though DW3 repaid the loan amount, the complainant did
not return the said cheques and subsequently, he
presented the cheque in question for unlawful gain. This
NC: 2025:KHC-D:7889
HC-KAR
aspect of the matter is clearly appreciated by the First
Appellate Court in acquitting the accused by setting aside
the judgment of conviction and order on sentence passed
by the Trial Court. In such circumstances, the learned
counsel for the respondent-accused prays to dismiss the
appeal.
8. Having heard the learned counsel for the parties
and on perusal of the entire material available on record,
the sole point that would surface for my consideration is:
"Whether the First Appellate Court is
justified in acquitting the accused for the
offence punishable under section 138 of
the N.I. Act by setting aside the
judgment of conviction and order of
sentence passed by the trial court in
C.C.No.509/2008?
9. I have given my anxious consideration to the
arguments advanced by both the learned counsel and
perused the materials on record.
- 10 -
NC: 2025:KHC-D:7889
HC-KAR
5. On perusal of the records it could be gathered
that, Ex.P1-cheque in question and signature of the
accused on the cheque is not disputed by the accused. The
specific defence of the accused is, at no point of time, he
borrowed a hand loan of ₹1,10,000/- from the
complainant and it is DW3/his sister, had obtained a loan
of ₹40,000/- from the complainant in the year 2000 by
executing an agreement of sale of her property on
26.07.2000 as per Ex.D1. Despite, the complainant
insisted DW3 to issue a cheque as a security and as such,
DW3 approached the accused requesting him for cheque.
At that time, the accused opened an account in Syndicate
Bank at Gangavati Branch as per Ex.D2 on 21.07.2000
and obtained a cheque book and from the said cheque
book, he gave 10 blank cheques to his sister-DW3 and in
turn, DW3 handed over the same to the complainant as a
security for the hand loan obtained by her. It is further
case of the accused that, subsequently, DW3 repaid the
loan amount to the complainant, however the complainant
- 11 -
NC: 2025:KHC-D:7889
HC-KAR
failed to return the cheques of the accused and presented
the cheque in question for unlawful gain. To substantiate
this defence, the accused examined himself as DW1 and
his sister as DW3 and her son as DW2.
6. On careful perusal of their evidence, all these
witnesses have deposed that DW3 availed a hand loan of
Rs.40,000/- from the complainant in the year 2000 and for
repayment of the said hand loan, the cheque in question
was issued by the accused as a security. It is pertinent to
mention at this stage that, in the cross-examination of
PW1-complainant, he admitted about DW3 availing a hand
loan of ₹40,000/- from his Finance in the year 2000 and
an agreement of sale was also executed by her. Further,
on perusal of the complaint and the evidence of PW1-
complainant, nowhere the complainant has stated the
date, month or the year of lending loan to the accused.
Further, he also admitted in his cross-examination that
there are several cheque bounce cases filed by him
against different persons in the capacity of Finance and on
- 12 -
NC: 2025:KHC-D:7889
HC-KAR
his personal capacity. In such circumstances, a doubt
arises in the mind of this Court in respect of alleged
transaction between the complainant and accused and also
about legally recoverable debt owned by the accused. No
doubt, the initial presumption arising under Sections 118
and 139 of the N.I. Act favours the complainant, however,
at the same time, as per the settled position by this Court
and the Hon'ble Apex Court in catena of judgments, the
initial burden can be rebutted by the accused by placing
sufficient defence. In the instant case, the accused has
placed sufficient evidence of DW1 to DW3 and also marked
document at Ex.D1 to rebut the initial presumption. In
that view of the matter, I am of the considered view that
the First Appellate Court has rightly appreciated the
evidence on record and acquitted the accused by setting
aside the judgment of conviction and order on sentence
passed by the Trial Court. Further, this appeal is against
the judgment of acquittal and it is settled position of law
that the Appellate Court shall not interfere with the
- 13 -
NC: 2025:KHC-D:7889
HC-KAR
acquittal judgment unless the trial Court had not taken a
plausible view. In the instant case, the First Appellate
Court has taken a plausible view. Under such
circumstances, I find no good grounds to interfere in the
acquittal judgment passed by the First Appellate Court. In
that view of the matter, I answer point raised above in the
affirmative and proceed to pass the following:
ORDER
The Criminal Appeal No.100299/2016 is hereby
dismissed.
SD/-
(RAJESH RAI K)
JUDGE
YAN
CT:PA
