Dismissed

Sri Mothi Reddy v. Sri Dilip

Karnataka HC8 Dec 2023CRL.A/256/2018

Case brief

AI extract

What is this about?

The Karnataka High Court dismissed the appellant's appeal against the acquittal of the respondent under Section 138 NI Act. The court held that the presumption of legally enforceable debt under Section 139 was rebutted because the complainant failed to prove his financial capacity to advance a large cash loan of Rs.5 Lakhs.

What did the court decide?

The criminal appeal filed by the complainant against the acquittal of the accused was dismissed.

Sri Mothi Reddy Vs Sri Dilip — Cheque Dishonour | Karnataka HC (2023)

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NC: 2023:KHC:44678 CRL.A No. 256 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 8^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR CRIMINAL APPEAL NO. 256 OF 2018

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BETWEEN:

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SRI. MOTHI REDDY, SON OF M. BHASKAR REDDY, AGED ABOUT 28 YEARS, RESIDING AT NO. 3, 1^ST MAIN ROAD, S.G. PALYA, KORAMANGALA, BENGALURU – 560 029.

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…APPELLANT (BY SRI. RAGHU BABU .N, ADVOCATE)

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AND:

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Digitally signed by SOWMYA D Location: High Court of Karnataka

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SRI. DILIP, SON OF SHIVALINAGA NAIDU, AGED ABOUT 30 YEARS, RESIDING AT NO 93, 10^TH CROSS, NEAR APR KALYANA MANTAP, HONGASANDRA, BEGUR MAIN ROAD, BENGALURU – 560 068

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…RESPONDENT

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(BY SRI. A.N. RAGHAVENDRA, ADVOCATE)

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THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT AND ORDER DATED 16.12.2017 PASSED BY THE XIX ADDL.C.M.M., BENGALURU IN C.C.NO.2967/2016 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.

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THIS APPEAL COMING ON FOR HEARING THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the appellant / complainant challenging the judgment of acquittal passed by XIX Additional Chief Metropolitan Magistrate, Bangalore in C.C.No2967/2016 dated 16.12.2017.

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For the sake of convenience, the parties

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herein are referred with original ranks occupied by them before the trial Court.

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The brief factual matrix leading to the case are that the complainant and accused are friends and out of this acquaintance, accused approached the complainant in the month of December 2014 for a hand loan of Rs.5 Lakhs to meet his family financial commitments agreeing to repay the same in due course by paying interest at the rate of 10% per annum. Accordingly, the complainant had advanced a sum of Rs.5 Lakhs by way of cash and accused issued two post dated cheques for Rs.2,50,000/- dated 10.8.2015 and

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12.08.2015 respectively and when the said cheques were presented, they were bounced for ‘insufficient of funds’. Hence, the complainant issued a legal notice to the accused but the accused did not respond to the legal notice by paying the cheque amount and hence, a complaint came to be lodged.

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The learned Magistrate after recording the sworn statement taken cognizance of the offence and issued process against the accused. The accused appeared through his counsel and was enlarged on bail. The plea under Section 138 of N.I.Act is framed and same is denied by the accused.

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The complainant was got examined himself as PW1 and placed reliance on 6 documents marked at Ex.P1 to Ex.P6. After conclusion of the evidence of the complainant, the statement of accused under Section 313 of Cr.P.C was recorded to enable the accused to explain the incriminating evidence appearing against

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him in the case of the complainant. The case of the accused is of total denial and he did not choose to lead any oral or documentary evidence in support of his defence.

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The learned Magistrate after appreciating the oral and documentary evidence, acquitted the accused for the offence punishable under Section 138 of N.I.Act by exercising the powers under Section 255 (1) of Cr.P.C. Being aggrieved by the judgment of acquittal, the complainant is before this court by way of this appeal.

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Heard the arguments advanced by the

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learned counsel for the appellant / complainant. The learned counsel for the respondent did not appear before the court so as to advance the arguments. Perused the records.

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The learned counsel for the appellant would

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contend that the cheque and the signature on the cheque are admitted and as such, there is presumption

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under Section 139 of N.I.Act in favour of the complainant to the effect that cheque was issued towards legally enforceable liability and same is not rebutted by the accused. It is also asserted that though the accused has set up a defence, he has not proved his defence and the presumption stands as it is and hence,

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the learned Magistrate has committed an error in acquitting the accused. Hence, he would seek for allowing the appeal by convicting the complainant.

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Having heard the arguments and perusing the

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records, now the following point would arise for my consideration:

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(i) Whether the judgment of acquittal passed by the trial court is perverse, arbitrary and erroneous so as to call for any interference by this court?

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It is the specific contention of the

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complainant is that in the month of December, 2014 accused has approached and requested him to lend a sum of Rs.5 Lakhs to meet his family committments with an assurance of repayment of the same in due course with interest at the rate of 10% and towards discharge of the said liability, it is alleged that the cheques Ex.P1 and Ex.P2 came to be issued. The cheques Ex.P1 and Ex.P2 are dated 10.08.2015 and 12.08.2015 respectively. There is no dispute of the fact that the cheques belong to the account of the accused and they bear his signatures. Hence, initial presumption under Section 139 of N.I.Act, that the cheque was issued towards legally enforceable liability is in favour of the complainant. However, it is a rebuttal presumption and accused can rebut the said presumption by highlighting the lacuna in the pleading, by way of crossexamination or leading evidence in this regard.

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On perusal of the complaint, it is evident that the complainant has no where asserted as to when the loan was advanced. Though it is argued that the loan was advanced in the month of December, 2014, on perusal of the recitals of the complaint in para 3, it is evident that demand was made in the month of December 2014, but when it was paid is completely silent. It is hard to accept the contention of the complainant that he is unable to recollect the date of advancement of the loan when he is advancing huge amount of Rs.5 Lakhs.

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Apart from that the accused has also disputed the financial status of the complainant. In view of that fact, complainant is also required to prove his financial status. The complainant, who is examined as PW1 in his cross-examination admitted that in the complaint he did not refer as to how he managed the amount of Rs.5 Lakhs. In the cross-examination for the first time he asserts that the amount was an

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agricultural income and he lent it to the accused. The complainant has not produced any scrap of paper to show that he is possessing any agricultural lands. He admits that he is in possession of the documents, but no such documents were produced. Further, he admits that he is not an income tax assesse. He further admits that he had no impediment to make payment by way of cheque or a Demand Draft. A suggestion was made to PW1 that when the complainant visited the house of the accused, he committed theft of the cheques and the said fact is denied. No doubt, the accused has not led any cogent evidence regarding theft of the cheques from his house and he has not intimated the same to the banker and did not lodge any complaint in this regard. However, when the financial status of the complainant is at stake, complainant is required to prove his status.

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In the cross-examination, PW1 further admits that he has no documents to show that he was

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possessing hard cash of Rs.5 Lakhs in his possession. Though he asserts that he is financially sound, he has not produced his bank statement to show his financial capacity or documents to show that he is possessing the agricultural lands, which would yield sufficient income. In the absence of any material documents in this regard, it is evident that complainant has failed to substantiate his financial status to advance huge loan of Rs.5 Lakhs. When the complainant has failed to substantiate his financial status, the presumption available in favour of the complainant regarding issuance of cheque towards legally enforceable liability automatically stands rebutted. In view of this, the complainant is required to prove his status, but he has not produced any evidence in this regard. Hence, at no stretch of imagination, it can be said that the cheque was issued towards legally enforceable debt.

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The accused has got examined himself as DW1 and he has all along asserted that he used to avail loan of Rs.1,000/- and Rs.2,000/- from the complainant regularly, but he has never availed loan of Rs.5 Lakhs. In the cross-examination of DW1, a suggestion was made that the amount of Rs.5 Lakhs was received by accused for construction of the house, but that was not the pleading made in the complaint. Looking to these facts and circumstances, the defence raised by the accused appears to be more probable and complainant is required to prove his case beyond all reasonable doubt, but accused is required to rebut the presumption on the basis of preponderance of probability. In the instant case, accused has rebutted the presumption by exposing the financial status of the complainant.

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The learned Magistrate has considered all

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these aspects and has rightly acquitted the accused / respondent herein. No perversity or illegality is found in

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the judgment of acquittal. Further, the conclusion arrived at by the learned Magistrate is also possible conclusion in view of lacunas in the pleadings. In the absence of material documents, the said conclusion of the learned Magistrate cannot be disturbed in this appeal. As such, the point under consideration is answered in the negative and accordingly, I proceed to pass the following:

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O R D E R

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(i) The appeal stands dismissed .

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Sd/JUDGE

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List No.: 1 Sl No.: 12

Sri Mothi Reddy v. Sri Dilip

Case brief

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Sri Mothi Reddy v. Sri Dilip

Case brief

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