[Cites 9, Cited by 0]

Karnataka High Court

Sri Abdul Rahiman vs Sri Janardhana Acharya on 25 February, 2026

                           -1-
                                      CRL.A No.718 of 2015


  IN THE HIGH COURT OF KARNATAKA AT BENGALURU
     DATED THIS THE 25TH DAY OF FEBRUARY, 2026
                        BEFORE
         THE HON'BLE MR. JUSTICE G BASAVARAJA
           CRIMINAL APPEAL NO.718 OF 2015

BETWEEN:

SRI ABDUL RAHIMAN
S/O ANDUNHI,
AGED ABOUT 63 YEARS
R/O ARLAPADAVU HOUSE,
PANAJE VILLAGE & POST,
PUTTUR TALUK,D.K-574201
                                              ...APPELLANT

(BY SRI. HAREESH BHANDARY T., ADV.)

AND:

SRI JANARDHANA ACHARYA
S/O AMBU ACHARYA,
AGED ABOUT 45 YEARS
R/O AJJIKALLU HOUSE,
VOLAMOGRU VILLAGE,
PUTTUR TALUK,D.K-574201
                                            ...RESPONDENT

(BY SRI. S. RAJASHEKAR, ADV.)

     THIS CRL.A. IS FILED U/S.378(4) CR.P.C PLEASED TO
SET-ASIDE THE JUDGMENT ORDER DATED 22.11.2010 PASSED
BY THE II ADDL. S.J., DAVANAGERE IN CRL.A.NO.88/2010 -
ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE
P/U/S 138 OF N.I. ACT.

     THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT    ON   17.12.2025  AND  COMING   ON   FOR
"PRONOUNCEMENT OF ORDERS" THIS DAY, THE COURT,
DELIVERED THE FOLLOWING:

CORAM:    HON'BLE MR. JUSTICE G BASAVARAJA
                                   -2-
                                            CRL.A No.718 of 2015


                        CAV JUDGMENT

Appellant-complainant has preferred this appeal against

the judgment of acquittal dated 30th May, 2015 passed in

Criminal Appeal No.55 of 2014 by the V Additional District

Sessions Judge, Dakshina Kannada, Mangalore, sitting at Puttur

(for short "the first appellate court") whereby the judgment of

conviction and order on sentence dated 07th February, 2014

passed in CC No.221 of 2011 by the Principal Civil Judge and

JMFC, Puttur (for short "the trial Court"), came to be set aside.

2. For the sake of convenience, the parties herein are

referred as per their rank before the trial Court.

3. Brief facts leading to this appeal are that the

complainant filed complaint under Section 138 of Negotiable

Instruments Act. After taking cognizance, case was registered

in CC No.221 of 2011. It is alleged by the complainant that

accused demanded a loan of ₹79,750/- for his urgent

necessities. Considering the urgency of the accused, the

complainant lent a sum of ₹79,750/- with the condition to

repay the same within a month. Accused agreed for the same

and received the amount. Even after lapse of a month, accused

did not come forward to repay the loan amount. The

complainant demanded the money for which the accused issued

a cheque bearing No.170791 dated 22nd December, 2007

drawn on State Bank of Mysore, Puttur Branch, assuring that

the same will be honoured upon presentation. Complainant

presented the cheque for encashment, but the same was

returned with an endorsement "insufficient funds". Registered

demand notice was issued to the accused on 5th January, 2008

calling upon to pay the amount covered under the cheque

within the stipulated period as required under the law and the

same was served on the accused on 8th January 2008. The

accused instead of complying with the demand, has given

frivolous reply to the said notice. Hence, the complainant

presented the complaint.

4. In pursuance of summons, accused appeared before

the court, plea was recorded, the accused pleaded not guilty

and claimed to be tried. To prove the guilt of the accused, one

witness was examined as PW1, four documents were marked as

Exhibits P1 to P4. On closure of prosecution side evidence,

statement of the accused under Section 313 of Code of Criminal

Procedure was recorded. Accused has totally denied the

evidence of prosecution witnesses and adduced evidence of two

witnesses as DWs1 and 2. Having heard the arguments on

both sides, the trial court convicted the accused for offence

under Section 138 of Negotiable Instruments Act and sentenced

to pay fine of ₹1,55,000/-, and in default, to undergo simple

imprisonment for a period of three months. Aggrieved by this

judgment of conviction and order on sentence, accused

preferred appeal before the first appellate court. The same

came to be allowed and the judgment of conviction passed by

the trial Court was set aside and accused was acquitted. Being

aggrieved by the judgment of acquittal passed by the first

appellate court, the complainant has preferred this appeal.

5. Sri Harish T. Bhandary, learned Counsel appearing

for the complainant would submit that the impugned judgment

of acquittal passed by the court is highly illegal, arbitrary and

unreasonable. He would submit that the first appellate court

has failed to properly appreciate the available material on

record and has erred in acquitting respondent. The first

appellate court has failed to note the presumption under

Sections 139 and 118 of Negotiable Instruments Act, which

ensures the benefit to the appellant that the cheque is issued

for legally recoverable debt, unless and until contrary is proved

and the respondent has not disputed the issuance of the

cheque. The first appellate Court has observed that there is no

specific pleading about the date of borrowing loan by the

respondent from appellant. He would further submit that the

first appellate court failed to note that the accused has

admitted the transaction with the complainant and the

signature in the cheque is also not disputed and therefore, the

presumption under Sections 139 and 118 of Negotiable

Instruments Act is required to be drawn in favour of the

Appellant/complainant.

6. Further, learned counsel would submit that the

observation made by the first appellate court that the

complainant has not narrated the disputed transaction and not

mentioned the date of issuance of cheque in his complaint as

well as in notice and evidence, and non-mentioning of the date

of transaction will go to the root of the case of the complainant

is not correct and bad in law. Under the Negotiable

Instruments Act, the entire case depends upon the

documentary evidence, and once the issuance of cheque and

transaction is admitted, it is not necessary to prove each and

every sequence of the transaction. When there is no dispute

with regard to signature of the accused on the cheque in

question, the approach of the first appellate court which has

proceeded with case as a money recovery suit, is bad in law.

The defence taken by the accused is not probable defence to

disprove the non-existence of the consideration. There is no

cogent or convincing evidence by the accused to disprove the

presumption available to the complainant. The defence of the

accused that the cheque was issued as a security, cannot be

accepted. He would further submit that Sections 138 and 142

of NI Act was introduced with the object of giving credibility to

negotiable instruments in a business transaction and to

discourage the people from disregarding the commitments. The

balance of convenience should lean in favour of an

interpretation which serves the object of the statute. He would

further submit that the presumption of Sections 118 and 139 of

Negotiable Instruments Act is rebuttable in nature. To rebut

the said presumption, accused has to adduce probable defence

to disprove the non-existence of the consideration. But the

accused took a different defence in respect of issuance of

cheque. The defence taken by the accused in reply notice is

not the defence taken by him during the course of trial. On all

these grounds, it is sought to allow the appeal.

7. Sri S. Rajashekar, learned Counsel appearing for

the respondent has submitted his written arguments supporting

the judgment of acquittal passed by the first appellate Court.

He has relied on the following decisions:

     i)      BASAPPA v. MUDIBASAPPA - (2019)5 SC 418;

     ii)     JOHN K. ABRAHAM v. SIMON C. ABRAHAM -
             (2014)2 SCC 236;

     iii)    K SUBRAMANI v.           K   DAMODARAN          NAIDU
             (2015)1 SCC 99;

     iv)     SHIVA MURTHY        v.    AMRITRAJ   -    ILR    2008
             Kar.4629;

     v)      SANJAY MISHRA v. KANISHKA                KAPOOR    @
             NIKKI - 2009(4) Mh.L.J 155

8. Having heard on both sides and on perusal of

material on record, the following point would arise for my

consideration:

"Whether the first appellate Court is justified in

reversing the judgment of conviction to acquittal?"

9. I have examined the materials placed before this

Court. It is the case of the prosecution that accused has

issued Cheque No.170971 dated 22nd December, 2007 for

Rs.79,750/- drawn on State Bank of Mysore, Puttur Branch in

favour of the complainant for discharge of loan obtained by the

accused. The same was presented for encashment and it was

returned with an endorsement, "insufficient funds". Hence,

complainant issued legal notice to the accused on 05th January,

2008 calling upon the accused to pay the cheque amount

within fifteen days. The accused did not pay the amount, but

has given reply stating that the cheque in question is not

issued towards any legally enforceable debt or the liability, but

the same is issued for the purpose of security. Further, he has

stated that he is ready to pay the amount of Rs.5,000/- which

was borrowed from the complainant. To substantiate the case

of the complainant, Cheque-Exhibit P1, Bank Endorsement-

Exhibit P2, copy of the legal notice-Exhibit P3 and reply notice-

Exhibit P4 has been produced. During the course of cross-

examination of DW1, he has clearly admitted that he has put

his signature on Cheque-Exhibit P1 as per Exhibit P1(a).

10. On perusal of materials placed before this Court, it

is crystal clear that the complainant has proved the essential

ingredients to constitute the offence under Section 138 of

Negotiable Instruments Act. Since the complainant has proved

the essential ingredients to constitute the offence under

Section 138 of the NI Act, the burden lies upon the accused to

rebut the evidence placed by the complainant under Section

139 of NI Act. To rebut the case of the complainant, the

accused has examined two witnesses as DWs1 and 2.

11. DW1 has deposed that he had taken his push-cart

to the workshop of the accused for repair. The accused has

told him to come after one month to take back the push-cart.

As he could not arrange for money, he went to the workshop of

the accused after three months. The accused asked him to

pay Rs.5,000/- as the repair cost. Accordingly, when he went

to the workshop with the amount, his cart was not there and

when enquired with the accused, he told him that he incurred

Rs.5,000/- for repair of the push-cart and as he was in urgent

need of money, he borrowed it from the complainant and gave

him the cart. Then, they both went to the house of the

complainant wherein he gave Rs.5,000/- to the accused, in

turn, the accused gave the same to the complainant. But the

complainant told them that he cannot give back the push-cart.

He has further deposed that when the accused gave him

money, he also demanded for two cheques and the accused

issued him two cheque leaves. It is further deposed that the

complainant demanded Rs.25,000/- more if he has to return

the cart and also two cheques. But the accused did not give

him the amount demanded. As he was repeatedly asking for

the cart, the accused made a new cart and gave it to him.

12. DW2-Janardhanachary, i.e. the accused, has

deposed in his evidence that he know the complainant and he

was doing fabrication work and running a shop and he has not

borrowed an amount of Rs.79,750/- from the complainant. He

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knows one Jayaramegowda. He came to his shop and had

given the push-cart for repair. He informed him to come after

one month and further told him that the repair cost would be

Rs.5,000/-. The said Jayaramegowda did not come after a

month and came only after three months. By that time, the

push-cart was not in his possession. He asked the complainant

for Rs.5,000/- loan. At the time of lending loan, the

complainant insisted to give push-cart which belonged to

Jayaramegowda on the promise that he will return the same to

Jayaramegowda whenever he comes and asked to give two

cheques for security. Accordingly, he has issued two blank

cheques and borrowed loan of Rs.5,000/-. After three months

Jayaramegowda came and approached the complainant and

paid him the amount of Rs.5,000/-. But the complainant

demanded Rs.25,000/- and he neither returned the push-cart

nor returned the cheques, despite repayment of loan amount

of Rs.5,000/-. Further, he has deposed that the complainant

has no financial capacity to lend the loan amount shown in the

cheque. The complainant has misused the cheque and has

filed false complaint against him and sought for acquittal.

During the course of cross-examination of DW2, he has clearly

admitted his signature on the cheque-Exhibit P1. If really, the

accused had issued blank cheques for the loan amount of

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Rs.5,000/- when the complainant issued legal notice to the

accused, the accused ought to have taken legal steps against

the complainant for misuse of the cheque in question. Accused

has not taken any legal steps against the complainant for

misuse of the cheque in question till this day. In reply notice,

the accused has not stated that the complainant has no

financial capacity to lend loan of Rs.79,750/-. For the first

time before the Court, the DW2-accused has deposed that the

complainant has no financial capacity to lend the amount of

Rs.79,750/-. Hence, this defence set up by the accused for

the first time before the Court, cannot be accepted. The trial

Court has properly appreciated the material on record in

accordance with law and facts. The first appellate Court has

observed that the alleged date of transaction is not mentioned

in the legal notice-Exhibit P3. This observation is not sufficient

to discard the evidence of the complainant for the reason that

burden lies upon the accused to rebut the presumption under

Section 139 of NI Act. Though the accused has not placed any

legally acceptable evidence before it, the first appellate Court

has acquitted the accused which is not sustainable under law.

13. Considering the facts and circumstances of the

case and keeping in mind the decision relied upon by the

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learned counsel for the appellant, and also the provision of

Section 139 of Negotiable Instruments Act, I am of the

considered opinion that the first appellate Court has not

properly appreciated the material on record and reversed the

judgment of conviction passed by the trial Court. Hence, I

answer the point that arose for consideration, in the negative.

14. In the result, I proceed to pass the following:

ORDER

i) Appeal is allowed;

ii) Judgment of acquittal dated 30th May, 2015 passed in Criminal Appeal No.55 of 2014 by the V Additional District & Sessions Judge, Dakshina Kannada, Mangalore sitting at Puttur, is set aside;

iii) Judgment of conviction and order on sentence dated 07th February, 2014 passed in CC No.221 of 2011 by the Principal Civil Judge and JMFC, Puttur is confirmed.