Karnataka High Court
Mr D P Gupta vs Sri Pradeep Rai on 28 March, 2025
Author: H.P.Sandesh
Bench: H.P.Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL NO.658/2013
BETWEEN:
MR. D.P. GUPTA
S/O LATE G.S. GUPTA
AGED ABOUT 60 YEARS
NO.5 & 6, MILLA BUILDING
N.R. ROAD, 2ND CROSS
BANGALORE-560 002. ... APPELLANT
(BY SRI. SHIVAPRASAD E, ADVOCATE)
AND:
SRI. PRADEEP RAI
BANTRA RANGA
NEAR DIVYA DIGITAL STUDIO
VAMENJUR
MANGALORE-575 004.
ALSO AT SRI. PRADEEP RAI
LOBO COMPOUND, ANEGUDI,
4TH CROSS, BEJAI NEW ROAD
MANGALORE-575 004. ... RESPONDENT
(BY SMT. ANANYA RAI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)
OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED
30.04.2013 PASSED BY THE XV ACMM, BANGALORE IN
2
C.C.NO.10182/2009 FOR THE OFFENCE PUNISHABLE UNDER
SECTION 138 OF NEGOTIABLE INSTURMENTS ACT AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT ON 18.03.2025 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
CAV JUDGMENT
This appeal is filed challenging the judgment dated
30.04.2013 passed in C.C.No.10182/2009 by the XV Additional
Chief Metropolitan Magistrate, Bangalore City for the offence
punishable under Section 138 of N.I. Act.
2. Heard the learned counsel appearing for the
respective parties.
3. The factual matrix of the case of the complainant
before the Trial Court that accused had availed a loan of Rs.4
lakh from the complainant promising to repay the same with
24% interest per annum within a year i.e., by the end of
February 2009. The complainant further contends that he met
the accused at Mangalore and demanded for repayment of the
loan amount with interest and traveling expenses. The accused
had issued a Cheque for a sum of Rs.5 lakh falsely assuring that
the Cheque will be honoured when presented for encashment
towards repayment of the legally recoverable debt. It is also the
case of the complainant that when the Cheque was presented for
encashment, the same was dishonoured as funds insufficient
vide memo dated 09.03.2009 and the complainant immediately
contacted the accused for payment of the amount but the
accused failed to repay the same. Hence, the complainant got
issued the legal notice and the same was served on the accused
and the accused gave untenable reply to the said notice. Hence,
the complainant filed the complaint against the accused.
4. The Trial Court took the cognizance and secured the
accused and the accused did not plead guilty and claims to be
tried. In order to prove the case of the complainant, the
complainant examined himself as PW1 and got marked the
documents at Ex.P1 to P14. On the other hand, accused got
examined himself as DW1 and got marked the documents at
Ex.D1 to D5. The accused set up the defence that the Cheque
was given towards purchase of furniture and there was no any
transaction between the complainant and himself and the
defence of the accused was accepted by the Trial Court
considering the document at Ex.D5 and acquitted him. Being
aggrieved by the judgment of the Trial Court, the complainant
filed the present appeal before this Court.
5. The main contention of the learned counsel for the
appellant/complainant before this Court that the Trial Court
committed an error in accepting the defence of the
accused/respondent and reached a wrong conclusion that the
appellant does not know the address of the respondent's
residence, his financial capacity for repayment and also the
appellant/complainant was not aware of the phone number of
the respondent and this approach of the Trial Court is erroneous.
It is contend that the defence set out by the respondent in Ex.P8
is that the instrument was in his possession and the same is
kept in his drawer and later, he came up with a new version that
the instrument has been issued in favour of one M/s Somayaji
Furniture towards the purchase of furniture worth of Rs.4,000/-
on credit basis in his second reply at Ex.P13. The Trial Court
failed to appreciate that the defence of the respondent was not
reliable and he was taking inconsistent stands which itself was
sufficient to hold that the respondent has failed to rebut the
presumption.
6. The counsel for the appellant also would vehemently
contend that when specific defence was taken that accused failed
to prove that any shop was existing in Mangalore as Somayaji
Furniture by producing even a visiting card or the credit bill or
any other document or examining any witness, the Trial Court
failed to appreciate the same and the Trial Court also failed to
appreciate that the alleged Latha Saneel named by the
respondent is well known to the respondent and he was availing
loans from her and issuing cheques to her but the respondent
failed to examine the said Latha Saneel and even failed to give
her address. The Trial Court relied on the imaginary and
inconsistent allegations of the respondent which the respondent
failed to establish. Thus, the reasoning given by the Trial Court is
erroneous and failed to consider the evidence of PW1 and also
the evidence of DW1 in a proper perspective.
7. The reason assigned by the Trial Court while
acquitting the accused that the complainant does not know the
family members and details were not given and phone number
was not disclosed and erroneously relied upon the entry made in
Ex.D5(a). The counsel contend that the document at Ex.D5 is a
self styled document and created and same has been relied upon
by the Trial Court. The counsel further contends that if really the
Cheque was given to Latha Saneel, ought to have examined that
Latha Saneel and even not produced any document for having
purchase furniture for Somayaji Furniture and not proved the
defence and first and second replies are contrary to each other
and hence, ought not to have acquitted the accused.
8. Per contra, the learned counsel appearing for the
respondent/accused would vehemently contend that specific
reply was given in terms of Ex.P8 stating that earlier cheques
and subsequent Cheques are given long back in the year 2002
itself and question of issuance of subject matter of Cheque in
2009 does not arise and the Trial Court also taken note of
contradictions and probable case was set out by the accused by
producing the document at Ex.D5 and the same is not created as
contended by the counsel for the appellant. The counsel also
would vehemently contend that the appellant is an advocate and
paid the cash and at that time, son was present but not
examined the son. The counsel also would vehemently contend
that the reason given by the appellant that he had returned the
pronote and consideration receipt and what made him to return
the same when the loan amount was not repaid. The counsel
also would vehemently contend that the advocate cannot lend
the money and do any lending business. The counsel also would
vehemently contend that the complainant is a stranger to the
accused and the same has been properly appreciated by the Trial
Court while acquitting the accused in coming to the conclusion
that the complainant has not proved his case. The Trial Court
also taken note of the fact that without taking any security like
promissory note or post dated Cheque, advancing a loan of Rs.4
lakh to the accused cannot be believed. The Trial Court also
taken note of ignorance of complainant regarding occupation of
the accused, residential address, financial capacity and
repayment capacity and under such circumstances, advancing
the amount of Rs.4 lakh to the accused in the absence of all
these. Though the complainant claims that at the time of
advancing the loan, the accused executed on demand pronote
and consideration receipt and explanation is given that on
receipt of disputed Cheque, he has returned the promissory note
and consideration receipt and the said defence cannot be
accepted. Hence, this Court cannot find fault with the reasoning
of the Trial Court and it does not require any interference of this
Court.
9. Having heard the learned counsel appearing for the
respective parties and also on perusal of the material on record
and the grounds which have been urged by the counsel for the
appellant in the appeal as well as during the course of the
arguments and also the arguments of the learned counsel for the
respondent, the points that would arise for the 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 loan transaction and whether it requires
interference of this Court exercising the
appellate jurisdiction?
2. What order?
Point No.1:
10. Having heard the learned counsel appearing for the
respective parties, this Court has to first examine the contents of
the complaint. In the complaint, the complainant stated that
accused is known to the complainant and accused had availed a
loan of Rs.4 lakh promising the complainant to repay the same
with interest at 24% per annum within a period of one year. The
complainant also contend that when accused did not repay the
amount as agreed, he visited Mangalore and met the accused
and demanded for repayment of the loan amount with interest
and traveling expenses and accused had issued the Cheque
dated 04.03.2009 with a pre-planned deceitful intention and the
said Cheque was dishonoured. The evidence of PW1 in the
affidavit that he reiterated the contents of the complaint by way
of affidavit and got marked the documents. In the cross-
examination, he admits that he is an advocate by profession. He
further admits that he met the accused 3 to 4 times and he was
introduced by one B Raghavendra Rao and he is running a hotel
at Nanjanagudu. It is also his evidence that he got introduced
him 6 to 7 years back but cannot tell the date, month and year
in which he had introduced but he claims that he introduced in
Mangalore Circuit house. He also admits that when he was
introduced, the said Raghavendra Rao was residing at
Nanjanagudu. But accused was working at Samudra Sahakari
Sangha as Manager at Mangalore but accused not shown any
documents that he was working and he also not seen the same.
He also admits that thereafter, he met the complainant in 2008
in his office at Bengalore. He admits that in between there is no
transaction between them and he is not aware of anything about
the family members and their avocation and where they were
residing. But he says that once again he met him in the month
of February at Mangalore and in between February 2008 and
2009, he had not met him. He also admits that he cannot tell
where the accused was working in February 2008.
11. It is suggested that accused was not introduced by
one Raghavendra Rao and the witness says that when he met
the accused in his office, at that time, he demanded for Rs.4
lakh and he asked him to come after two days and he made the
payment in the month of February 2008 in his office and at that
time, his son was present and the amount was also paid by cash,
for that, accused agreed to pay 24% interest. He is not a
income tax assessee. But he claims that he is working at
Mangalore in Bantaranga paper company and given details of his
company and residential address but he has not seen any
document with regard to his employment. But complainant
made the payment as hand loan and at the time of availing the
loan, accused had executed an on demand pronote and
consideration receipt but the complainant has not produced the
same since he claims that when Cheque was given, he had
returned the same to the accused and for having return the
same he had not taken any endorsement. PW1 further admits
that his son is doing iron and steel business and his wife was
doing the business of electronics at Bengalore in the name of
Ganga Maruthi till 1992-93. He further admits that in connection
with the said business, he used to file several cases based on the
power of attorney. PW1 says that on 25.02.2009, he went to
the Mangalore to see the accused and he called the accused to
Mangalore bus stand and spoken to him. The said Raghavendra
Rao who got introduced the accused, passed away 6 to 7 years
ago. He admits the issuance of reply notice and also he has
issued re-joinder and also accused gave reply to the said notice.
It is suggested that at no point of time, accused had availed a
loan of Rs.4 lakh and even not paid any interest and not liable to
pay any amount and the same was denied. It is suggested that
subject matter of Cheque was given to Somayaji Furniture,
Mangalore as security and the same was misused and the
amount was paid to the Latha Saneel and demanded to return
the Cheque but the Latha Saneel told him that Cheque was
misplaced and going to return the same. It is suggested that in
collusion with the said Latha Saneel, the present case is filed and
the same was denied. However, admits that the contents of the
Cheque and signature are in different ink.
12. On the other hand, the accused also examined
himself as DW1 and denied that at no point of time, he had
received the amount of Rs.4 lakh from the complainant and the
subject matter of the Cheque was given to Latha Saneel for
purchase of furniture and amount was paid but Cheque was not
returned and promised to return the same when the same is
traced. Inspite of repeated demand also did not return the same
and the said furniture shop was also closed and only when the
notice was issued, he came to know about both the complainant
and the said Latha Saneel misused the said Cheque and got
marked the document at Ex.D1 to D5. This witness was
subjected to cross-examination and in the cross-examination,
witness admits that he did B.Com and he is running a paper
business in the name of Bantara Samaja and he himself is a
owner and editor and running the same from last 6 to 7 years
and prior to that he was working in other Bantara Sangha paper.
He also admits that prior to that he was working at Samudra
Sahakari Sangha as a Manager. The document was confronted
to the witness that Samudra Sahakari Sangha had filed a case
against him in C.C.No.160/2005 and judgment was passed in
terms of Ex.P14 and the said case also in respect of bouncing of
Cheque. He admits that he cannot tell in which year, he had
purchased the furniture from Somayaji Furniture but claims that
it was in the year 2002. He also admits that he cannot produce
the bill for having purchased the same and delivery challen but
says that he had purchased the same on credit basis and he also
not given any advance, but he had given the Cheque and for
having given the Cheque, there is no receipt and
acknowledgement in this regard.
13. It is suggested that no said furniture were purchased
and amount was paid and the said suggestion was denied. It is
suggested that in 2002, no such Somayaji Furniture was in
existence and same was in existence in front of Nazarath
Convent, Balmat Road, Mangalore. He claims that within one
month, he will repay the amount and for having paid the
amount, he lost the receipt. He also admits that he cannot
produce any document to show that in the said Somayaji
Furniture, the Latha Saneel was working. He admits that he can
get the address of Latha Saneel and except the said Cheque, no
other Cheque was given to Latha Saneel, but may be given 4 to
5 cheques to Latha Saneel in connection with other transaction
and also may be given 4 to 5 cheques as security and cannot tell
whether those cheques are honoured or dishonoured and also
cannot tell for which back, those cheques pertains to which given
to the Latha Saneel.
14. This witness was also further cross-examined
wherein he admits in terms of Ex.P14 that he had given three
cheques in favour of Samudra Sahakari Sangha and those
cheques are also not in continuity and also no reference in Ex.D5
Cheque number 515318 to 525322 and so also in respect of
Cheque No.525323 and also no reference of Cheque 525304, but
signature found in Ex.P13 belongs to him. He admits that in
Ex.P13, in four places, there are amendment and the same was
made by the advocate and written as 'Furniture' and he himself
given instructions to make such amendment and it was blank
and having received the instructions, got amended the same. In
Ex.D3 also signature belongs to him and admits that Ex.P13
where amendment was made it is mentioned as Somayaji
Electronics and the same was amended as Furniture. He admits
signature found in Ex.P8 and he admits that in Ex.P8, it is
mentioned that the said Cheque was in his possession in his
office. In Ex.P13 with an intention to give false evidence,
corrections are made and the same was denied. He admits that
for having issued the Cheque in favour of Somayaji Furniture or
Electronics, he is not having any document. For having repaid
the amount to Latha Saneel, when she replied that Cheque was
lost, not given any instructions to the bank not to encash the
same and even inspite of receipt of notice, not given any notice
to Latha Saneel for having misused the Cheque and even not
given any complaint against Latha Saneel and also not given any
complaint against the complainant. It is also elicited in the cross-
examination that in Ex.P5(a), Cheque No.525311, there was a
reference of giving the same to Somayaji Electronics but not in
the name of Somayaji Furniture.
15. Having considered both oral and documentary
evidence placed on record of the complainant and the accused, it
is not in dispute that Cheque pertains to accused. It is the case
of the complainant that amount was lent to the accused and
accused also got introduced by one Raghavendra Rao. It is the
specific case of the complainant that at the time of advancing
the loan, accused was working at Samudra Sahakari Sangha and
the accused also admits in the cross-examination that earlier, he
was working in the very same society. It is also important to
note that in reply notice, which is marked as Ex.P8, at the first
instance, denied the very transaction contending that instrument
is a bogus instrument and client has not issued the same and
client also not known to the accused and there was no any
dealings and no hand loan was taken and met the complainant
at any point. It is admitted that client opened the saving bank
account in ICICI bank and Cheque book was issued and the
Cheque leaves 525310 and 525312 which are the previous
Cheque and subsequent Cheque was issued way back in the year
2002 and there was no question of issuing the subject matter of
Cheque on 04.03.2009 and contend that this itself shows the
illegal claim of the complainant and accused has not operated
the said account since 2005 and there was a debit balance and
the said Cheque was not issued by his client but in the second
reply notice, after the issuance of re-joinder by the complainant,
defence was set up that the accused traced his counterfoil of the
Cheque book along with his old records wherein all the entries
relating to the cheques issued by him are written on the last
page. The Cheque in question was delivered on 12.07.2002 to
Somayaji Furniture for the purchase of a small furniture piece of
around Rs.4,000/- and a blank Cheque was issued by the
accused and there was a person by name Latha Saneel who was
working for Somayaji Furniture in 2002 who also had fixed
deposits invested in Samudra V.S.S. Limited in 2002 wherein
accused was the then Branch Manager. The fixed deposit
invested by Latha Saneel was not paid back on maturity and
hence, she used to insist that accused to pay the same and in
that connection, Cheque was issued.
16. Once the Cheque was admitted and defence was
taken by the accused and the very specific case of the accused
that he had purchased the furniture and issued the Cheque and
when the specific defence was taken that Cheque was issued in
favour of Somayaji Electronics and not in respect of Somayaji
Furniture, accused ought to have examined Latha Saneel to
prove the said defence but not done the same.
17. It is the specific case of the complainant that
accused was introduced by one Raghavendra Rao but the
complainant categorically deposes that the said Raghavendra
Rao passed away 6 to 7 years ago hence, the question of
examination of the said Raghavendra Rao does not arise. But no
doubt, PW1 admits that he could not give any details of family of
the accused and also phone number but categorically says that
phone number was saved but could not tell the same and also
categorically says that accused was working at Samudra
Sahakari Sangha as a Manager but no such documents were
produced in this regard but evidence of DW1 itself is clear that
earlier, he was working in the said society. It is important to
note that it is the case of the complainant that pronote and
consideration receipt was executed at the time of availing the
loan and the same were returned when the Cheque was issued
and no receipt is produced for having returned the same. It is
also important to note that when the complainant denied the
very existence of Somayaji Furniture, accused not placed any
document to show the existence of Somayaji Furniture and also
not examined the said Latha Saneel who said to be working in
the said Somayaji Furniture and no such defence was taken at
the first instance while issuing reply in terms of Ex.P8 except
stating that the subject matter of Cheque could not be issued in
2009. On the other hand, if really other cheques were issued
and transacted earlier to that, the accused has not placed any
document except relying upon Ex.D5(a) wherein a self styled
entry made in the said document.
18. It is also important to note that for having purchase
the furniture from Somayaji Furniture also no document is
placed before the Court. It is also important to note that in the
cross-examination of DW1, he categorically admits for having
paid the amount to Somayaji Furniture but not produced the
receipt in this regard but says that receipt was lost. It is also
important to note that in the cross-examination of DW1, answers
are elicited that Cheque numbers are not in continuity and there
was no reference in the Cheque book. It is important to note
that DW1 categorically admitted that the society, in which he
was working also, filed a case against him and hence, the Court
has to take note of the conduct of the accused also. The
accused had categorically admits that there are corrections and
amendments in Ex.P13 and the same was created by the
advocate that is in the second reply notice it is mentioned as
Somayaji Furniture, but it is mentioned as Somayaji Electronics.
19. It is also important to note that DW1 categorically
admits that there is no any document for having given the
Cheque to Somayaji Furniture or Electronics and even when the
Latha Saneel informed that Cheque was lost, the accused not
given any instructions to the bank stating that not to encash the
same. It is specific case of the accused that in collusion of the
complainant and Latha Saneel, the present case is filed. It is
also important to note that when the notice was issued to the
accused, he has not given any notice to Latha Saneel but claims
that shop was closed and hence, could not give notice. And
accused even not given any complaint against the said Latha
Saneel for having misused the Cheque and even as against the
complainant also. Except relying upon Ex.D5, nothing is placed
on record about the transaction, in which year, the other
cheques are honoured and dishonoured and even the document
of for having purchased the furniture also not placed before the
Court and even for having repaid the amount also, no receipt is
produced except stating that receipt was lost. No doubt, the
complainant-PW1 admits in the cross-examination that he was
not having the details of the family of the accused and phone
number and the same cannot be a ground to disbelieve the case
of the complainant when the Cheque was in the custody of the
complainant. No doubt, PW1 admits that he was not an income
tax assessee.
20. The very case of the complainant that he advanced
the amount in the year 2008 for a period of one year and when
he met the accused in the year 2009, the subject matter of the
Cheque was issued by the accused. It has to be noted that the
Trial Court given the reason that what made the complainant to
return the pronote and consideration receipt, but no explanation
for the same. But PW1 categorically says that when the Cheque
was given, he had returned the pronote and consideration
receipt. When such answer was given and when the Cheque was
in the custody of the complainant, burden shifts on the accused
to prove the same. But the Trial Court committed an error in
coming to the conclusion that the case of the accused is probable
than the case of the complainant. The accused has to rebut the
same and mere taking of defence that Cheque was given in
favour of Somayaji Furniture cannot be a ground to acquit the
accused when no cogent evidence is not placed for having
transacted with Somayaji Furniture and given the Cheque and
accused ought to have examined Latha Saneel but not examined
her. When contra defence was taken in Ex.P8 and P13, the Trial
Court ought not to have accepted the case of the accused in the
absence of cogent evidence with regard to probablising the case
that Cheque was given only in favour of Somayaji Furniture. In
the absence of having purchased the furniture on credit basis
and repayment and any receipt for having repayment and the
theory of misusing of Cheque by the complainant and Latha
Saneel also has not been proved. Hence, the Trial Court
committed an error and ought to have been drawn the
presumption in favour of the complainant under Section 138 of
N.I. Act unless the same is rebutted and no preponderance of
probabilities in favour of the accused inspite of the Trial Court
committed an error in acquitting the accused. Hence, it requires
interference of this Court. Accordingly, I answer the above point
as affirmative.
Point No.2
21. In view of the discussions made above, I pass the
following:
ORDER
The appeal is allowed.
The impugned order dated 30.04.2013 passed
in C.C.No.10182/2009 by the XV Additional Chief
Metropolitan Magistrate, Bangalore City is set aside.
Consequently, the accused/respondent is
convicted for the offence punishable under Section
138 of N.I. Act and directed the accused to pay the
amount of Rs.5,00,000/- within two months, in
default, he shall undergo sentence of simple
imprisonment for a period of six months.
Out of Rs.5,00,000/-, ordered to pay a sum of
Rs.4,90,000/- to the complainant and remaining
amount of Rs.10,000/- is ordered to vest with the
State.
Sd/-
(H.P. SANDESH)
JUDGE
SN
