Karnataka High Court
Samrudh Souhard Credit Sahakari ... vs Shri.Jaheer Mehmood Jamadar on 27 March, 2025
Author: Shivashankar Amarannavar
Bench: Shivashankar Amarannavar
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CRL.A No. 100137 of 2018
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 27TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
CRIMINAL APPEAL NO.100137 OF 2018
BETWEEN:
1. SAMRUDH SOUHARD CREDIT SAHAKARI NIYAMIT,
HAVING ITS OFFICE AT CTS NO.5647,
IIIRD FLOOR, BAMNE TOWER,
OPP. FIRE BRIGADGE STATION,
KHANAPUR ROAD, BELAGAVI,
REPRESENTED BY IT SECRETARY,
SMT. KRANTI W/O. MANGESH KANTAK,
AGE:36 YEARS, OCC: SERVICE,
R/O: CTS NO.5647, IIIRD FLOOR,
BAMNE TOWER, OPP. FIRE BRIGADGE STATION,
KHANAPUR ROAD, BELAGAVI.
2. SHRI. MANGESH S/O. TRIVIKRAM KANTAK,
AGE: 41 YEARS, OCC: SERVICE,
R/O: CTS NO.5647, IIIRD FLOOR, BAMNE TOWNER
OPP. FIRE BRIGADGE STATION,
KHANAPUR ROAD, BELAGAVI.
Digitally signed by
...APPELLANTS
MOHANKUMAR B
SHELAR (BY SRI. RAM P. GHORPADE, ADVOCATE)
Location: High
Court of
Karnataka,
Dharwad Bench,
Dharwad
AND:
SHRI. JAHEER MEHMOOD JAMADAR,
AGE: 45 YEARS, OCC: BUSINESS,
R/O: H.NO.2075, SARASWATI NAGAR,
NEAR SIDHIVINAYAK TEMPLE BELAGAVI - 06.
...RESPONDENT
(BY SRI. S. B. SHAIKH, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF
CR.P.C., SEEKING TO GRANT LEAVE TO APPEAL AND TO CALL FOR
THE RELEVANT RECORDS AND ALLOW THIS CRIMINAL APPEAL, BY
SETTING ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED
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CRL.A No. 100137 of 2018
28.03.2018 PASSED IN C.C.NO.172/2017, BY THE VITH JMFC,
BELAGAVI AND TO CONVICT AND SENTENCE THE
ACCUSED/RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT AND PASS
SUCH ANY OTHER ORDER OR ORDERS AS THIS HON'BE COURT
DEEMS FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN
THE INTEREST OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR
ORAL JUDGMENT
This appeal is filed by the appellant -complainant
praying to set-aside the judgment of acquittal dated
20.03.2018 passed in C.C.No.172/2017 by the VI JMFC,
Belagavi, whereunder the respondent -accused has been
acquitted for offence punishable under Section 138 of the
Negotiable Instruments Act, 1881 (hereinafter referred to
as 'N.I. Act', for short)
2. The case of the appellant -complainant's in
brief is as under:
The respondent -accused has taken a loan of
Rs.3,00,000/- (rupees Three Lakhs only) on 16.11.2013
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from the complainant. The respondent -accused become
defaulter in paying the installments of the said loan. The
total amount due as on 14.01.2016 is Rs.4,36,357/-
(rupees Four Lakh Thirty Six Thousand Three Hundred
Fifty Seven Only). The appellant -complainant requested
the accused to make payment of loan amount. The
respondent -accused has issued a cheque bearing
No.212232 dated 14.01.2016 drawn on ICICI Bank,
Khanapur Road, Tilakwadi Branch, Belagavi for Rs.
4,36,357/-(rupees Four Lakh Thirty Six Thousand Three
Hundred Fifty Seven Only) infavour of the appellant -
complainant. The appellant -complainant presented the
said cheque for encashment and it came to be
dishonoured for reason "funds insufficient" in the account
of accused under memo dated 18.01.2016. The appellant
-complainant got issued legal notice to the respondent
accused on 15.02.2016 and it has been served on the
respondent -accused on 16.02.2016. The respondent -
accused has not paid the cheque amount and therefore,
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the appellant -complainant has filed a private complaint
against the respondent -accused for the offence
punishable under Section 138 of the N.I Act.
3. Learned Magistrate has taken cognizance and
registered C.C.No.172/2017 against the respondent -
accused for the offence under Section 138 of N.I. Act. The
plea of the accused has been recorded. The appellant -
complainant in order to prove its case has examined
witness as PW-1 and got marked documents as Exs.P-1 to
P-14. The statement of accused has been recorded under
Section 313 of Cr.P.C. The respondent -accused did not
lead any defence evidence. The learned Magistrate after
hearing the arguments on both sides, has formulated the
points for consideration and passed the impugned
judgment of acquittal of the respondent -accused for
offence punishable under Section 138 of the N.I Act. The
said judgment of acquittal has been challenged by the
appellant -complainant in this appeal.
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4. Heard learned counsel for appellant and learned
counsel for the respondent.
5. Learned counsel for appellant -complainant
would contend that the borrowing of loan of Rs.3,00,000/-
(rupees Three Lakhs only) has been established by
producing loan application -Ex.P7, promissory note -Ex.P8
executed by the respondent -accused and two others and
withdrawing the loan amount credited to the SB account of
the respondent -accused under two withdrawal slips
Ex.P12 and 13. The statement of personal loan account -
Ex.P10 and 11 indicate that the loan amount was due and
it is higher than the cheque amount as on the date of
cheque. The respondent -accused has admitted his
signature on the cheque -Ex.P1. The presumption drawn
under Section 139 of the N.I Act has not been rebutted by
the respondent -accused. There is legally enforceable debt
and for which the respondent -accused has issued cheque
-Ex.P1 and it has been dishonoured for reason "funds
insufficient" in the account of the accused. Inspite of
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issuance of notice, the respondent -accused neither
replied to the notice nor paid the cheque amount within 15
days. The evidence on record will establish that the
respondent -accused has committed offence punishable
under Section 138 of the N.I Act. Without considering all
these aspects, learned trial Judge has erred in acquitting
the respondent -accused for offence punishable under
Section 138 of the N.I Act. On these grounds, he prays to
allow the appeal and convict the respondent -accused for
offence punishable under Section 138 of the N.I Act.
6. Learned counsel for the respondent -accused
would contend that P.W.1 in his cross examination has
admitted that proposal of loan has been rejected. He
contends that loan application, demand promissory note
and other documents were taken at the time of filing loan
application. He contends that cheque has been also issued
at the time of filing loan application. The Chairman of
appellant - Society was friend of the respondent -accused
and at his instance he affixed his signature on documents
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including cheque. Husband is Chairman and wife is
Secretary of appellant -Society and family members
cannot be hold post of elected members as per Section
29(A)(1)(f) of the Karnataka Co-Operative Societies Act,
1959. The respondent -accused has rebutted the
presumption raised under Section 139 of the N.I Act. The
appellant -complainant has also filed another case for
dishonor of cheque by using cheque bearing No.212231
and it is pending. He submits that considering all these
aspects, learned Magistrate has rightly acquitted the
respondent -accused for offence punishable under Section
138 of the N.I Act. With these, he prays for dismissal of
the appeal.
7. Having heard learned counsels, the Court has
perused the impugned judgment and trial Court records.
Considering the grounds urged, the following point arises
for my consideration:
"Whether the trial Court has erred
in acquitting the respondent -accused
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for offence under Section 138 of N.I.
Act?"
My answer to the above point is in the 'affirmative'
for the following reasons:
It is the specific case of the appellant -complainant
that the respondent -accused has availed loan of
Rs.3,00,000/- (rupees Three Lakhs only) from the
appellant -complainant and repayment of the same has
issued cheque -Ex.P1. The respondent -accused has
admitted his signature on cheque -Ex.P1. As respondent
-accused has admitted his signature on cheque -Ex.P1,
the presumption has to be drawn under Section 139 of the
N.I Act that the cheque has been issued for discharge of
debt. The said presumption is rebuttable presumption. The
standard of proof for rebutting the said presumption is
preponderance of probability.
8. Since, the appellant -complainant has produced
documents to establish that the respondent -accused has
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borrowed loan of Rs.3,00,000/-(rupees Three Lakhs only)
and there was balance more than cheque amount as on
the date of cheque, the presumption drawn under Section
139 of the N.I Act becomes insignificant.
9. Ex.P7 is loan application filed by the respondent
-accused seeking loan of Rs.5,00,000/-(rupees Five Lakhs
only) and it bears his signature. The page No.2 of the said
application bears signature of two guarantors namely
Dattatraya Jadhav and Srikanth Patil. The page No.3 of
the said application contains sanction order and loan has
been sanctioned in sum of Rs.3,00,000/-(rupees Three
Lakhs only) to the respondent -accused under resolution
dated 05.11.2013 and it has been signed by the Chairman
and Secretary with round seal. Ex.P8 -on demand
promissory note executed by the respondent -accused and
two sureties infavour of the appellant -complainant for
sum of Rs.3,00,000/-(rupees Three Lakhs only) dated
16.11.2013. It bears signature of the respondent -accused
and two sureties. Ex.P9 is account opening form of SB
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account filed by the respondent -accused and it contains
account No.594 which is SB account of the respondent -
accused. It is case of the appellant -complainant that loan
amount of Rs.3,00,000/-(rupees Three Lakhs only) has
been credited to SB account of the respondent -accused
and he has withdrawn Rs.41,625/- on 16.11.2013 under
withdrawal slip -Ex.P13 and Rs.2,58,375/- on 19.11.2023
under withdrawal slip -Ex.P12. Those two withdrawal slips
pertains to SB account No.594 and they bears signature of
the respondent -accused. Ex.P12 contains signature of the
respondent -accused on the back of the withdrawal slip.
There is no signature on the back of Ex.P13 withdrawal
slip. The said documents itself clearly establish that the
respondent -accused has availed loan of Rs.3,00,000/-
(rupees Three Lakhs only) from the appellant -
complainant.
10. Ex.P-11 is statement of loan account of the
respondent/accused maintained with the appellant. As per
Ex.P-11, a sum of Rs.4,73,343/- (rupees Four Lakhs
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Seventy Three Thousand Three Hundred Fourty Three
only) was due as on 31.03.2016. The said statement of
loan account Ex.P-11 indicates that the respondent -
accused has not repaid any amount towards his loan
account. Ex.P-1-cheque has been issued on 14.01.2016
for Rs.4,36,357/-(rupees Four Lakhs Thirty Six Thousand
Three Hundred Fifty Seven only) by the accused in favour
of the appellant. The said cheque has been withdrawn for
repayment of loan amount. Ex.P11- statement of loan
account indicate that loan due is more than the cheque
amount.
11. Learned counsel for respondent/accused would
contend that the name of Samruddhi Co-operative Credit
Society Limited has been changed to Samrudh Souhard
Credit Sahakari Niyamit in the year 2007 and it has been
admitted by PW-1 in his cross-examination. Ex.P-7, Ex.P-
8, Ex.P-9, Ex.P-12 and Ex.P-13 are printed in the name of
Samruddhi Co-operative Credit Society Limited. Learned
counsel contends that even though the name is changed,
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the forms are used in the old name and therefore, there is
no legal liability to show that loan amount is due by the
accused to the appellant. On perusal of those documents,
it is seen that seal of Samrudh Souhard Credit Sahakari
Niyamit is affixed on top of all those documents namely,
Ex.P7, Ex.P-8, Ex.P9, Ex.P-12 and Ex.P-13.
12. Placing reliance on the admission given by PW-1
in his cross-examination that the application for loan has
been rejected, the learned counsel submits that when loan
application is rejected, there is no any liability of the
accused to pay the loan amount. On perusal of the
sanction order contained in Pg.No.3 of Ex.P-7, loan of
Rs.3,00,000/- has been sanctioned to the respondent -
accused under resolution No.3 dated 05.11.2013 and it
bears seal and signature of Chairman and Secretary and it
is dated 05.11.2013. Therefore, the said admission given
by PW-1 in his cross-examination does not help the
accused to say that he has not been sanctioned with loan
by the appellant.
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13. Learned counsel for appellant contended that
the signature on Ex.P-5-Postal acknowledgement is not
that of respondent -accused. The respondent -accused has
not disputed his address mentioned in Ex.P-5 and Ex.P-3-
legal notice. When address on a postal cover/postal
acknowledgement is not disputed, there is a presumption
under Section 27 of the General Clauses Act that the letter
is delivered to the addressee.
14. The cheque has been issued by the
appellant/accused as per Ex.P-1 for Rs.4,36,357/- towards
repayment of amount borrowed. Ex.P-11 indicate the loan
availed by respondent -accused is due more than the
extent of the cheque amount. The said cheque has been
dishonoured for want of funds in the account of the drawer
as per Bank memo-Ex.P-2. The appellant has issued notice
as per Ex.P-3. The said notice-Ex.P-3 has been served on
accused on 16.02.2016 as per Ex.P-5-Postal
acknowledgement. The accused did not pay cheque
amount within 15 days from the date of service of legal
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notice. The appellant has filed complaint within one month
from the date of cause of action. Considering all these
aspects, the appellant has established all ingredients of
offence under Section 138 of N.I. Act. Learned Magistrate
without considering the above aspects, has erred in
acquitting respondent -accused for offence under Section
138 of N.I. Act. Therefore, the impugned judgment
requires to be set aside and respondent -accused is liable
to be convicted for offence under Section 138 of N.I. Act.
15. In the result, the following:
ORDER
i. The appeal is allowed.
ii. The impugned judgment of acquittal dated
28.03.2018 passed in C.C.No.172/2017 by VI-
JMFC, Belagavi is set aside.
iii. The respondent -accused is convicted for offence
under Section 138 of N.I. Act and he is
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sentenced to pay fine of Rs.4,46,357/- (rupees
Four Lakhs Forty Six Thousand Three Hundred
Fifty Seven only) and in default to undergo
simple imprisonment for six months. Out of this
said fine amount Rs.4,36,357/- (rupees Four
Lakhs Thirty Six Thousand Three Hundred Fifty
Seven only) has to be paid as compensation to
the appellant.
iv. The appellant -accused shall deposit the said fine
amount within two months from this day.
Sd/-
(SHIVASHANKAR AMARANNAVAR)
JUDGE
DSP,RKM/CT-ASC
