Karnataka High Court

Sri Raghurama Reddy vs Sri Chandra Reddy B on 26 March, 2025

Author: H.P.Sandesh

Bench: H.P.Sandesh

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                                                      CRL.A No. 1144 of 2013




                        IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                           DATED THIS THE 26TH DAY OF MARCH, 2025

                                            BEFORE

                             THE HON'BLE MR JUSTICE H.P.SANDESH

                              CRIMINAL APPEAL NO. 1144 OF 2013

                   BETWEEN:

                   1.    SRI. RAGHURAMA REDDY
                         S/O MUNIREDDY
                         AGED ABOUT 45 YEARS
                         R/AT NO.12/2, N.AGARA
                         JIGANI HOBLI, ANEKAL TALUK
                         BENGALURU URBAN DISTRICT.
                                                                 ...APPELLANT

                               (BY SRI. BASAVANNA M.D., ADVOCATE)
                   AND:

                   1.    SRI. CHANDRA REDDY B,
                         S/O BHADRAREDDY
                         AGED ABOUT 40 YEARS
                         R/AT PRABHAKARA REDDY BUILDING
Digitally signed
by DEVIKA M              3RD CROSS, VIDYANAGARA
Location: HIGH           BOMMANAHALLI INDUSTRIAL AREA
COURT OF                 HOSURU MAIN ROAD
KARNATAKA                BENGALURU-99.
                                                               ...RESPONDENT

                              (BY SRI. M.S.VARADARAJAN, ADVOCATE)

                          THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378
                   OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND
                   ORDER DATED 05.10.2013 PASSED BY THE XIV ACMM,
                   BENGALURU      IN   C.C.NO.27013/2011   ACQUITTING    THE
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                                      CRL.A No. 1144 of 2013




RESPONDENT/ACCUSED        FOR   THE   OFFENCE     PUNISHABLE
UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT.


     THIS APPEAL COMING ON FOR FINAL HEARING THIS
DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:


CORAM:    HON'BLE MR. JUSTICE H.P.SANDESH

                      ORAL JUDGMENT

Heard learned counsel for the appellant and learned

counsel for the respondent.

2. The factual matrix of the case of the complainant

before the Trial Court is that both the complainant and the

accused are relatives i.e., brother in laws and having close

acquaintance with each other, since he has given his sister to

the accused and in turn he has married his sister. In the first

week of August 2010, the accused approached and requested

him for hand loan of Rs.15 lakhs for the purpose of financial

difficulties. Considering his request, he arranged and paid the

amount of Rs.15 lakhs in the last week of August, 2010 and he

had agreed to repay the amount on or before 26th of October,

2010. On demand, he had issued the cheque for Rs.15 lakhs

and when the same was presented, it was dishonoured with an

endorsement 'insufficient fund'. Hence, legal notice was issued

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and the same was served on 02.03.2011, but not made any

payment in compliance of the demand. Hence, complaint was

filed, the Trial Court taken cognizance and secured the accused

and he did not plead guilty and the complainant examined

himself as P.W.1 and got marked the documents as Exs.P1 to

P6. On the other hand, the accused did not choose to enter

into the witness box, but instead examined his father-in-law,

who is also father of the complainant and got marked the

documents as Exs.D1 and D2. The accused was subjected to

313 statement.

3. The Trial Court having considered the evidence of

P.W.1 as well as Exs.P1 to P6 and also the evidence of D.W.1

dismissed the complaint, in coming to the conclusion that there

was no source of income to make the payment of Rs.15 lakhs.

Apart from that payment of more than Rs.20,000/- ought to

have been paid through cheque and also payment of the

amount of Rs.15 lakhs was not declared in income tax. D.W.1,

who is none other than father of the complainant was also

examined and he has deposed before the Court that he had

bequeathed 5 guntas of land as per Ex.D2 and copy of the gift

deed is also produced in favour of the complainant for doing the

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bisleri business and also stood as guarantor while availing loan

of Rs.25 lakhs from the concerned bank authority and also he

categorically deposed before the Court that cheque was given

as security, in order to avail loan from the bank to do the

business. Hence, comes to the conclusion that probable defence

was led by accused by examining his father-in-law and

complainant has not proved his case. Being aggrieved by the

order of acquittal, present appeal is filed before this Court.

4. The main contention of learned counsel for the

appellant before this Court is that issuance of cheque is not

disputed and only defence is that cheque was given as security

for availing loan by the complainant. But, he was not a surety

to the said transaction and the same is elicited from the mouth

of D.W.1. Learned counsel would submit that before filing

complaint also, notice was issued and no reply was given to the

notice. He has also not led any evidence before the Trial Court

to show that cheque was given as security as contended,

instead the Trial Court accepted the case of the accused and

there is no rebuttal evidence before the Trial Court and ought

not to have dismissed the complaint.

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5. Per contra, learned counsel for the respondent

submits that according to the complainant, the amount was

paid in the presence of his wife in the month of August 2010

and complainant has not examined his wife before the Trial

Court. The learned counsel would contend that amount was

paid having drawn the amount from bank and no document is

placed before the Court for having drawn the money. Learned

counsel would vehemently contend that with regard to source

of income is concerned, according to him cheque was given on

26.10.2010 for an amount of Rs.15 lakh. Learned counsel also

brought to notice of this Court document marked before the

Trial Court i.e., Ex.D1. In terms of the agreement also, made

the payment of Rs.15 lakhs, for having paid the amount of

Rs.15 lakhs for the complainant as well as in favour of land

owner in terms of Ex.D1, no document is placed before Trial

Court and also no bank statement is produced before the Court

to prove that he was having that much of amount to pay the

same, since notice was given to one Veerareddy in terms of

Ex.D1 at the instance of the complainant only and sale

consideration was arrived as Rs.7,50,000/- for 1 gunta and

total land was measuring 2 guntas for total consideration of

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Rs.15 lakhs and entire sale consideration was also paid. Hence,

the Trial Court rightly comes to the conclusion that he was not

having source of income to make such payment. The father of

the very complainant was examined before the Trial Court,

even though not examined the accused and evidence available

on record was considered by the Trial Court and it does not

require any interference.

6. Having heard learned counsel for the appellant and

learned counsel for the respondent and also the grounds urged

by both the respective counsels, the points that would arise for

consideration of this Court are:

(1) Whether the Trial Court committed an error in acquitting the accused in coming to the conclusion that the complainant has not proved the case?

(2) What order?

7. Having heard learned counsel for the appellant and

learned counsel for the respondent, it is the specific case of the

complainant that accused is his brother-in-law and he was in

need of money and he had approached the complainant in the

first of August, 2010 and he made the payment in the end

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August, 2010 of Rs.15 lakh and agreed to repay the same in a

short period of two months and when he did not repay the

same, he gave the cheque and cheque was bounced and notice

was issued. Issuance of cheque and issuance of notice is not in

dispute and no reply was given immediately after receiving the

notice. Learned counsel would submit that notice was served

on his wife, but it is not the case of the accused that notice was

not served on him and it was also not brought to his notice by

his wife and postal acknowledgment produced discloses that

wife of the accused had taken the notice.

8. It is also important to note that, in the cross-

examination of P.W.1, nothing is elicited with regard to cheque

was given as security, in order to avail loan from the bank. But

only says that at the time of lending money, no document was

obtained and the fact that both of them are brother-in-laws are

not in dispute and it is also not in dispute that the sister of the

complainant was given to the accused and in turn, sister of

accused was given to the complainant. No doubt, he admits

that he is paying income tax, for having made the payment of

Rs.15 lakhs, he did not disclose the same in his income tax and

except this submission, nothing is elicited. He admits that in

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order to clear construction of the house, the father had sold the

property and he admits that cheque was presented on

22.02.2011 and not presented the same immediately on

26.10.2010. He also admits that he had availed the loan of

Rs.25 lakhs under 'Rojgar Scheme' from Union Bank of India

and got the subsidy of Rs.8,75,000/-. There were four

suretydars in respect of the said loan transaction. It is

suggested that he has not given amount of Rs.15 lakhs and

only to avail loan in respect of bisleri factory business, cheque

was given and the same was denied.

9. On the other hand, D.W.1, father-in-law appeared

and given the evidence that the bank people have insisted for

guarantee and demanded cheque for Rs.15 lakhs. Hence,

accused gave the cheque to him and the same was given to the

complainant and he also says that he was aware of issuance of

notice. But in the cross-examination, he admits that when his

son availed loan from the bank, he himself and his other

children gave their property as security and land is worth of

Rs.1 Crore and admits that loan was given based on that

security. He also admits that loan amount is lesser than value

of the land. It is suggested that bank people have not

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demanded cheque for Rs.15 lakhs and the said suggestion was

denied. However, he categorically admits that to that loan, this

accused was not surety or guarantor. When suggestion was

made that bank people have not asked any security and the

same was denied. He also admits that for having misused the

cheque also, he has not given any complaint against his son

and also admits that he is not cordial with his son from last two

years and there was dispute between him and his son in

respect of the property and his son had filed the suit in

O.S.No.673/2012 seeking partition and he is having grudge

against him in view of filing of case against him.

10. Having taken note of answer elicited from the

mouth of D.W.1, who is none other than father of the

complainant, it is very clear that he was not in cordial terms

with the complainant, but he came forward to give evidence

claiming that cheque was given by the accused and handed

over to him and in turn, he handed over the same. But, when

the admission given by D.W.1 is very clear that the accused

was not the guarantor or surety for the loan which the

complainant has availed and apart from that, he categorically

admits that the property which was given as security to the

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loan which the complainant had availed is more than Rs.1 Crore

and all the family members stood as guarantors, when such

being the case, very case of the accused that he issued cheque

in favour of complainant as security for availing the loan, no

probable defence has been raised. Apart from that, even the

accused did not choose to lead any defence evidence in support

of his contention, except examining the father-in-law, who was

having grudge against this complainant, since the complainant

had filed the suit seeking the relief of partition and the person,

who takes the specific defence that he gave the cheque as

security for availing the loan for the complainant, he would

have appeared and given the evidence and no such probable

defence is raised.

11. It is also important to note that when the notice

was given by the complainant and the same was served, but no

reply was given and when the suggestion was made to P.W.1

that he was having source of money and also he is running the

factory is suggested in the cross-examination of P.W.1, the fact

that he is running bisleri factory is also not disputed. When

such being the case, the Trial Court ought not to have come to

a conclusion that he was not having source of income to lend

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the money. No doubt, as on the date of transaction, no

document was obtained, the Court has to take note of

relationship between the complainant and the accused who are

brother-in-laws and not declaring the amount in the income tax

cannot be a ground to come to an other conclusion, when the

complainant placed on record the cheque issued and there is a

presumption under Section 139 of Evidence Act and unless

presumption is rebutted under Section 139 of Evidence Act, the

judgment relied upon by learned counsel for the appellant

reported in RAJESH JAIN VS. AJAY SINGH reported in AIR

2023 SC 5018 regarding presumption of cheque issued by

accused towards repayment of debt availed from complainant,

was dishonoured, accused neither replied demand notice nor

presented any rebuttal evidence, instead, accused claimed that

blank cheque had been misused by complainant, accused

however failed to provide any substantial evidence or file a

police complaint regarding alleged missing cheque and the said

judgment is aptly applicable to the facts of the case on hand.

12. This Court also in CRIMINAL REVISION

PETITION NO.619 OF 2021 dated 04.06.2024 also made an

observation that when no positive action is also taken by the

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accused like filing a police complaint or issuing a legal notice or

filing the civil proceedings in respect of the alleged misuse of

the cheque as well as when he has placed on record the

document of Ex.P1-cheque which belong to the accused and the

signature found therein is that of the accused and in the

absence of any rebuttal evidence, the defence of the accused is

not accepted.

13. The counsel also relied upon the judgment of Apex

Court in TEDHI SINGH VS. NARAYAN DASS MAHANT

reported in LAWS (SC)-2022-3-108, wherein also discussion

was made with regard to the fact that when the complainant

gives his evidence, unless a case is set up in the 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. 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. But in the case on hand, no probable defence is

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raised by the accused and I have already pointed out that he

did not choose to appear and give any evidence before the Trial

Court and even defence set up that the cheque was given as

security for availing loan by the complainant is not

substantiated, inspite of D.W.1, the father of the complainant

has been examined and answer given by P.W.1 is also clear

that he was having ill-will against his son, since his son had

filed the case before giving evidence in 2012 and also admits

that for initiation of case against him, he is having ill-will

against his son and the same is also elicited in the cross-

examination of D.W.1. Under the circumstances, I do not find

any force in the contention of learned counsel for the

respondent that no documentary evidence is placed before the

Court and the contention that not examined the wife of

complainant is not a ground to come to an other conclusion and

the Trial Court committed error in not considering the material

on record, particularly the answer elicited from the mouth of

D.W.1. It is also important to note that when notice was issued,

no reply was given and no probable defence was set up by the

accused and the same is not probabilized by leading any

preponderance of probability before the Trial Court and hence,

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the Trial Court committed an error in acquitting the accused.

Hence, I answer Point No.(1) as 'affirmative'.

Point No.(2)

14. In view of the discussion made above, I pass the

following:

ORDER

(i) The criminal appeal is allowed.

(ii) The impugned judgment of acquittal is set

aside. Consequently, the complaint filed by

the appellant/complainant is allowed. The

accused is convicted for the offence under

Section 138 of N.I. Act.

(iii) The respondent/accused is directed to pay

the fine amount of R.15,00,000/- to the

appellant/complainant within two months

from today. If he fails to pay the fine amount

within two months, he shall undergo simple

imprisonment for a period of one year.