Karnataka High Court
M/S M K Agro Tech Pvt Ltd vs Smt. Renuka on 12 March, 2025
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CRL.A No. 1183 of 2022
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 12TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
CRIMINAL APPEAL NO. 1183 OF 2022 (A)
BETWEEN:
M/S M.K.AGRO TECH PVT LTD
HAVING REGISTERED OFFICE AT NO.389
M.B.ROAD, KAVERI LAYOUT
SRIRANGAPATNA-571 438
REPRESENTED BY ITS
AUTHORIZED SIGNATORY
MR. ASHFAQ AHMED R
...APPELLANT
(BY SRI. PRAVEEN M.T, ADVOCATE)
AND:
SMT. RENUKA
W/O LATE GAVI RANGAPPA
AGED ABOUT 60 YEARS
R/AT NO.401/2
Digitally signed SANNA KURUBARA STREET
by SHAKAMBARI
Location: HIGH
OLD BHADRAVATHI
COURT OF SHIVMOGGA-577 301
KARNATAKA
...RESPONDENT
(RESPONDENT SERVED, UNREPRESENTED)
THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO
SET ASIDE THE JUDGMENT OF ACQUITTAL DATED 29.04.2022
PASSED BY THE LXI ADDITIONAL CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH-62) IN CRL.A.NO.2224/2018 AND
CONFIRM THE JUDGMENT DATED 27.10.2018 (ANNEXURE-A)
PASSED BY THE XXIV ADDITIONAL SMALL CAUSES JUDGE AND
XXII ADDL.C.M.M., (SCCH-26), BENGALURU.
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CRL.A No. 1183 of 2022
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR
ORAL JUDGMENT
This appeal is directed against the judgment of
acquittal dated 29.04.2022 passed by the LXI Addl. City
Civil and Sessions Judge, Bengaluru (CCH-62) in Criminal
Appeal No.2224/2018 by setting aside the judgment of
conviction and sentence dated 27.10.2018 passed by the
XXIV A.S.C.J and XXII A.C.M.M (SCCH-26), Bengaluru in
C.C.No.1068/2018.
2. The parties to this appeal are referred to as per
their rank before the trial Court for convenience.
3. The facts leading up to this appeal are as
under:
The complainant/appellant filed a complaint under
Section 200 of Cr.P.C against the accused alleging offence
punishable under Section 138 of the Negotiable
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Instrument Act, 1881 (for short 'NI Act'), stating that,
complainant is a 'cooking oil manufacturing company' and
the accused was the distributor of 'Sunpure cooking oil',
running her business under the name and style of 'Renuka
Enterprises and Trading', Brigade Road, Bhadravathi. It is
stated that, the complainant's company has supplied the
'Sunpure cooking oil' to the accused on credit basis. The
accused used to repay the amount for having received this
cooking oil. It is stated that, in discharge of the said
amount towards purchase of the 'Sunpure cooking oil' on
27.12.2017, accused issued a cheque bearing No.691663
in the name of the complainant drawn on SBI, Old Town
area Branch Bhadravathi. When the said cheque was
presented by the complainant for encashment on the same
day i.e. 27.12.2017, it was dishonoured for want of
'Sufficient Funds' in the account of the accused.
Thereafter, the complainant issued the statutory notice on
17.01.2018 and called upon the accused to make a
payment of money mentioned in the cheque. The accused
did not issue any reply. Therefore, the complainant filed a
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complaint before the XXIV A.S.C.J and XXII A.C.M.M
(SCCH-26), Bengaluru, which was subsequently registered
as C.C.No.1068/2018 by the trial Court. The accused was
summoned before the trial Court and she was enlarged on
bail. The plea was recorded under Section 138 of the NI
Act for which she pleaded not guilty.
4. To substantiate the case of the complainant,
one Sri.Manjunath Umasutha, entered the witness box as
PW.1 and got marked Exs.P.1 to 8 and closed his
evidence. Thereafter accused was questioned under
Section 313 of Cr.P.C so as to enable her to answer the
incriminating evidence appearing in the complainant's
evidence. She denied her complicity in the crime. To
rebut the evidence of the complainant, accused herself
entered the witness box as DW.1, none of the documents
are marked on her behalf.
5. Learned trial Court on hearing the arguments of
both the sides and on evaluation of the evidence found the
accused guilty of committing the offence under Section
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138 of the NI Act and accused was convicted and
sentenced for the said offence with a direction to pay fine
of Rs.3,00,000/- (Rupees Three Lakhs only). In default of
payment of fine, she shall suffer simple imprisonment for
6 months. It is further ordered that, if the fine amount is
realized, Rs.2,95,000/- has to be paid as compensation to
the complainant and remaining Rs.5,000/- is defrayed to
the state for the expenses incurred.
6. This judgment of conviction and sentence
passed by the trial Court was challenged by the accused
before the LXI Addl. City Civil and Sessions Judge,
Bengaluru (CCH-62) by filing appeal in Criminal Appeal
No.2224/2018. The learned First Appellate Court after
hearing the arguments and on re-evaluation of the
evidence, found that, the accused had failed to prove his
case with regard to the legally enforceable debt and
consequentially by observing that, as the accused was a
retail business woman and purchased the an oil as credit
basis but as there was incentives to be paid, on that
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ground, the said appeal came to be allowed and
consequentially, the accused is acquitted. This is how,
now the appellant/complainant is before this Court
challenging the judgment of the First Appellant Court.
7. Though notice of this appeal is served on the
respondent, she remained unrepresented. The learned
counsel, Sri.Praveen M.T., for the appellant submits that,
though the accused admits the transaction between the
complainant and the accused with regard to supply of the
'Sunpure cooking oil' and issuance of a cheque but, the
learned First Appellate Court has committed a grave error
in allowing the appeal and setting aside the impugned
judgment of conviction and sentence passed by the trial
Court. He submits that, the trial Court on considering the
evidence placed on record by the complainant, evaluated
the evidence and rightly concluded that, accused is guilty
of committing offence punishable under Section 138 of the
NI Act. He would submit that, there is no proper
appreciation of evidence by the first Appellate Court. The
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learned Appellate Court has acquitted the accused by
setting aside the judgment of the trial Court. In support
of his submission, the learned counsel for the
appellant/complainant relied upon the evidence placed on
record by the complainant as well as respondent and the
oral evidence and admissions DW.1 in the cross
examination.
8. Having heard the arguments of the learned
counsel for the appellant and on perusal of the records
placed on record, the point that would arise from my
consideration is:
"Whether the First Appellate Court has
committed any legal and factual error in
allowing the appeal and setting aside the
judgment passed in the C.C.No.1068/2018
passed by the trial Court?"
9. In this case as stated supra, most of the factual
features are admitted. It is not in dispute that,
complainant is a 'cooking oil manufacturing company' and
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accused was the distributor of 'Sunpure cooking oil' and
running her business under the name and style of 'Renuka
Enterprises and Trading', Brigade Road, Bhadravathi. It is
the case of the complainant that, the complainant has
supplied the 'Sunpure cooking oil' to the accused on credit
basis. Towards the payment of the materials purchased by
the accused, she issued a cheque bearing No.691663
dated 27.12.2017 on Rs.268461/- drawn on SBI, Old Town
area Branch Bhadravathi. On receipt of the said cheque,
complainant presented the same for encashment but, the
said cheque came to be dishonoured for want of 'Sufficient
Funds' on 27.12.2017 itself. Therefore, the complainant
issued the statutory notice on 17.01.2018 and called upon
the accused to make the payment of the cheque amount,
but the accused did not respond for the same. Therefore,
the complainant constrained to file the complaint under
Section 200 of Cr.P.C and subsequently, it was registered
in C.C.No.1068/2018 by the learned Magistrate.
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10. Let me discuss the law with regard to dishonor
of cheques and how the complainant has to prove his
case.
11. Law regarding offence under Section 138 of N.I
Act is well settled in the decision of Hon'ble Apex Court in
APS Forex Services (P) Ltd. v. Shakti International
Fashion Linkers reported in (2020) 12 SCC 724 which
reads as under:
"7.2....Therefore, once the accused has admitted
the issuance of cheque which bears his signature,
there is presumption that there exists a legally
enforceable debt or liability under Section 139 of
the NI Act. However, such a presumption is
rebuttable in nature and the accused is required to
lead the evidence to rebut such presumption. The
accused was required to lead evidence that the
entire amount due and payable to the complainant
was paid."
12. The Hon'ble Apex Court in Rajesh Jain v. Ajay
Singh reported in (2023) 10 SCC 148 states regarding
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necessary ingredients of Section 138 of the NI Act, which
reads as under:
"24. Essentially, in all trials concerning dishonour
of cheque, the courts are called upon to consider is
whether the ingredients of the offence enumerated
in Section 138 of the Act have been met and if so,
whether the accused was able to rebut the
statutory presumption contemplated by Section 139
of the Act.
25. In Gimpex (P) Ltd. v. Manoj Goel [Gimpex
(P) Ltd. v. Manoj Goel, (2022) 11 SCC 705 : (2023)
3 SCC (Civ) 314] , this Court has unpacked the
ingredients forming the basis of the offence under
Section 138 of the NI Act in the following structure
: (SCC pp. 726-27, para 26)
(i) The drawing of a cheque by person on an
account maintained by him with the banker for
the payment of any amount of money to another
from that account;
(ii) The cheque being drawn for the discharge
in whole or in part of any debt or other liability;
(iii) Presentation of the cheque to the bank
arranged to be paid from that account;
(iv) The return of the cheque by the drawee
bank as unpaid either because the amount of
money standing to the credit of that account is
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insufficient to honour the cheque or that it
exceeds the amount;
(v) A notice by the payee or the holder in due
course making a demand for the payment of the
amount to the drawer of the cheque within 30
days of the receipt of information from the bank
in regard to the return of the cheque; and
(vi) The drawer of the cheque failing to make
payment of the amount of money to the payee or
the holder in due course within 15 days of the
receipt of the notice."
13. PW1, being the Manager of the complainant
company by name Manjunath Umasutha, has reiterated
the averments made in the complaint in his evidence on
oath. He is specific about the issuance of the cheque by
the accused in discharge of the amount so due from the
accused towards supply of the cooking oil. Though he has
been cross-examined at length, but nothing worth is
elicited from the mouth of this witness. It is admitted by
PW1, as rightly observed by the Trial Magistrate that, PW1
has given evidence based upon the document. He is one
of the Directors of the Company. He is specific that, there
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was transaction in between the complainant and the
accused till October 2017. It is a suggestion by the
counsel for the accused that, the last transaction between
the accused and the complainant was till October 2017.
That means, the supply of cooking oil to the accused by
the complainant company is categorically admitted by the
accused. It is admitted that, if the customer of the
complainant company after reaching the target, the
complainant company provides incentives to the same. It
is stated that, the incentives is being given to the
customers and it is included in the payment. Taking this
evidence of PW1, the learned Appellate Court has
observed that, as there is no legally enforceable debt,
therefore, the accused is to be acquitted.
14. Insofar as issuance of the cheque, signature on
the same, it is admitted by DW1. It is suggested to PW1
that, two cheques were given to the complainant, but they
are given by way of security. To show that, the said
cheques were issued towards security, except the bald
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suggestions, no evidence is placed on record by the
accused. This PW1 is specific that, out of total amount of
Rs.4,98,000/-, Rs.2,30,000/- was paid by the accused,
and for remaining amount, she has issued a cheque as per
Ex.P1. There is no further denial of this fact by the
accused in the further cross-examination. Further, it is
suggested that, in the year 2017 itself, the entire account
of the accused is closed, but this suggestion is denied by
PW.1.
15. DW.1, being the accused, has stated that, the
complainant company had obtained two blank cheques
signed by her and it was being misused. According to her,
the contents of Ex.P1 are filled by the complainant. No
notice is served upon the accused. According to her,
complainant has to pay Rs.1,15,000/- towards incentives
and when she enquired about payment of the same, the
complainant stopped transaction with the accused. For
the first time, without suggesting any question to that
effect to PW.1, she has stated in her examination in chief.
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She has been cross-examined. It is stated in the cross-
examination that, as per the Account Statement, the total
outstanding amount to the complainant was
Rs.4,98,000/-. She admits that, she has paid
Rs.2,30,000/- to the complainant. To that effect, Ex.P.8 is
confronted to her and it is marked in evidence. She
admits that, she has received incentives from the
complainant company and denied other suggestions.
16. Insofar as documentary evidence is concerned,
the complainant relies upon Ex.P.1 - the cheque signed by
the accused and her signature, which is admitted by DW.1
herself in her chief examination. So also, Ex.P.2 is an
endorsement issued by the Bank stating that, the cheque
was dishonoured for want of sufficient funds. So
immediately after receipt of the said cheque dated
27.12.2017, the said cheque was presented, but it was
dishonoured for want of sufficient funds. Thereafter, the
statutory notice came to be issued by the complainant as
per Ex.P.3. Ex.P.4 is the return cover, which shows the
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notice was returned as it was 'not claimed'. Thereafter,
the complainant filed a complaint under Section 200 of
Cr.P.C. As the notice is not claimed, the Trial Court held
that, it is a deemed service. Ex.P.5 is the letter of
authorization to PW.1 to give evidence in this case. Ex.P6
is an admitted document by the accused that, it is the
statement of account to show that in all, the accused has
to pay Rs.4,98,499/- towards supply of 'cooking oil' to the
accused. Out of this Rs.4,98,499/-, accused has paid
Rs.2,30,000/- as per the evidence of PW.1 and as per the
admission of DW.1 in the cross-examination. To show that
accused is the Proprietor of the said Renuka Enterprises,
photocopy of the VAT Registration Certificate is produced,
which is not disputed. Ex.P.8 is produced to show the
account extract.
17. The learned Trial Court, considering the entire
evidence placed on record by the complainant and
evaluating the evidence of DW.1, has clearly observed
that, as the accused has admitted her signature on the
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said cheque, so also admitted the transaction, therefore, it
raised the presumption under section 118 of the NI Act, as
well as under Section 139 of the NI Act which speaks to
that effect. The learned Trial Court relied upon the
decision in K.L.Agarwal V/s. M/s Paramount
Solutions, Bangalore reported in 2017 (2) AKR 12.
It is held that, when the accused admits about issuance of
the cheques and signature, if there is no evidence placed
on record to rebut the presumption raised against the
accused, then the case of the complainant has to be
accepted. Even the decision in T. Vansanthakumar V/s.
Vijayakumari reported in 2015 AIR-SCW 3040 is
relied upon by the Trial Court. Wherein it is held that,
"when the signature is not disputed on the said cheque,
then the presumption under Section 139 of the NI Act is
attracted".
18. By appreciating the evidence in proper
perspective, the learned Trial Court has rightly convicted
the accused, but the Appellate Court, without appreciating
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the evidence and without applying its mind in a proper
perspective, has set aside the judgment so passed in
C.C.No.1068/2018. When the complainant is able to
establish that, there was legally enforceable debt, i.e.,
towards sale consideration of selling the 'cooking oil' by
the complainant to the accused and when in discharge of
the said amount, the cheque is issued, there is a
compliance of provisions of Section 138 of the NI Act by
the complainant. If that is so, it is proved that, accused
has committed the offence under Section 138 of the NI
Act, rightly the Trial Court has convicted the accused. The
Appellate Court has committed an error in setting aside
the judgment passed by the Trial Court. The same is
required to be set aside. When accused admits about
purchase of the cooking oil worth Rs.4,98,499/- and
payment of Rs.2,30,000/- and for balance she has issued
a cheque and when this transaction is proved, I find that,
the First Appellate Court has committed illegality in
allowing the appeal. Consequentially, the judgment of the
Appellate Court dated 29.04.2022 passed in
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Crl.A.No.2224/2018 by the LXI Additional City Civil and
Sessions Judge, Bengaluru City(CCH-62) is liable to be set
aside, and the judgment of conviction and order of
sentence dated 27.10.2018 passed in C.C.No.1068/2018
by the XXIV Additional Small Causes Judge and XXII
ACMM (SCCH-26), Bengaluru, is to be restored.
19. Resultantly, I pass the following:
ORDER
(i) The Criminal Appeal is allowed.
(ii) The judgment of acquittal dated
29.04.2022 passed in Crl.A.No.2224/2018
by the LXI Additional City Civil and
Sessions Judge, Bengaluru City (CCH-62)
is hereby set aside.
(iii) Consequentially, the judgment of
conviction and order of sentence so
passed in C.C.No.1068/2018 dated
27.10.2018 by the XXIV Additional Small
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Causes Judge and XXII ACMM, Bengaluru
(SCCH-26) is hereby restored.
(iv) The bail bond of the accused stands
cancelled.
(v) The Trial Court is directed to take
necessary steps to recover the fine
amount in accordance with law.
(vi) Registry to transmit the Trial Court
Records along with copy of this judgment.
Sd/-
(RAMACHANDRA D. HUDDAR)
JUDGE
AM, AMM
