Dismissed

Sri. D Somashekar v. Sri. S Giriraj

Karnataka HC18 Dec 2023CRL.A/26/2018

Case brief

AI extract

What is this about?

This criminal appeal challenges a trial court's acquittal in a cheque bounce case under Section 138 NI Act. The High Court held that the statutory presumption under Section 139 was rebutted due to the complainant's failure to prove the date of loan advancement and lack of financial capacity evidence, dismissing the appeal.

What did the court decide?

Criminal appeal filed under Section 378(4) Cr.P.C. is dismissed with no order as to costs.

Sri. D Somashekar Vs Sri. S Giriraj — Cheque Dishonour | Karnataka HC (2023)

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1 - NC: 2023:KHC:46012 CRL.A No. 26 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR CRIMINAL APPEAL NO. 26 OF 2018

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BETWEEN:

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SRI. D. SOMASHEKAR, S/O D DODDANARASIAH, AGED ABOUT 37 YEARS, R/AT NO.U 19, “BELLI BEDAGU” NILAYA, 10^TH MAIN, PALACE GUTTAHALLI, BANGALORE-560 003.

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…APPELLANT (BY SRI. C.M. DESAI, ADVOCATE) AND:

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Digitally signed by SOWMYA D Location: High Court of Karnataka

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SRI. S. GIRIRAJ S/O SUBBANNA .V.N, AGED ABOUT 52 YEARS, R/AT FLAT NO.301, 4^TH FLOOR, CREATIVE SURAJ, 5^TH CROSS, 5^TH MAIN, OPP:SRIRAMA TEMPLE, C.P BLOCK, GANGANAGARA EXTN. BANGALORE-560 032.

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…RESPONDENT (BY SRI. K. NIRANJAN AND SRI. NAMADEVA PADIYAR .U, ADVOCATES)

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THIS CRL.A. IS FILED U/S 378(4) CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 02.11.2017 PASSED BY THE XIX ADDL.C.M.M., BANGALORE IN C.C.NO.13831/2016 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 ON N.I ACT.

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

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NC: 2023:KHC:46012 CRL.A No. 26 of 2018

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JUDGMENT

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This appeal is filed by the appellant/

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complainant under Section 378(4) of Code of Criminal Procedure, 1973 (for short ‘Cr.P.C.’), challenging the judgment of acquittal passed by XIX Additional Chief Metropolitan Magistrate, Bengaluru City, in CC. No.13831/2016, dated 02.11.2017.

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For the sake of convenience, the parties herein are referred with the original ranks occupied by them before the trial Court.

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The brief factual matrix leading to the case are that complainant and accused are acquainted with each other since long time. It is further asserted that out of this acquaintance, the complainant was approached by the accused for financial assistance in the month of October2015 demanding hand loan of Rs.2,75,000/-. It is further asserted that, with great difficulty, the complainant adjusted the funds and gave a short term hand loan of Rs.2,75,000/- to the accused. The accused had agreed to

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repay the loan amount within three months, but he did not repay the same. Subsequently, by the intervention of friends, the matter was settled and accused has issued a cheque bearing No.111597, dated 08.03.2016, for a sum of Rs.2,75,000/- drawn on Axis Bank, R.T.Nagar Branch, Bengaluru. When the said cheque was presented for encashment by the complainant, it was returned with an endorsement as “funds insufficient”. Thereafter, the complainant has got issued a legal notice to the accused and in spite of service of legal notice, the accused failed to make repayment of the cheque amount. Hence, the complainant has lodged a complaint under Section 200 of Cr.P.C. before the learned Magistrate alleging that the accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’).

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After recording the sworn statement, the learned Magistrate has taken cognizance of the offence and issued process against the accused. The accused

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appeared through his counsel and was enlarged on bail. The plea under Section 138 of the N.I. Act was framed and accused denied the same. Thereafter, the complainant was got examined himself as PW1 and placed reliance on four documents marked at Ex.P1 to Ex.P4. After conclusion of evidence of the complainant, the statement of accused under Section 313 Cr.P.C was recorded and the case of the accused is of total denial. He got himself examined as DW1 and placed reliance on two documents marked at Ex.D1 and Ex.D2.

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

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Heard the arguments advanced by the learned

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counsel for the appellant. In spite of granting sufficient

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opportunities, the learned counsel for the respondent did not appear before the Court so as to advance the arguments on behalf of respondent. Perused the records. Since the transaction is a private transaction between the parties, there is no need for appointing Amicus Curiae for respondent.

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The learned counsel for appellant would contend that the accused has approached for advancement of loan of Rs.2,75,000/- and complainant with much difficulty arranged the said amount and handed over the same and accused assured repayment of the same within three months. But when he failed to do so and by intervention of the elders, he issued a cheque dated 08.03.2016. It is further asserted that the complainant thereafter when presented the said cheque, it was bounced and legal notice was issued, which is served and the trial Court only on the ground that there is no document of proof of loan and considering the defence held that rebuttal has been done, acquitted the accused.

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He would contend that the cheque and signature have been admitted and there is initial presumption under Section 139 of N.I.Act in favour of the complainant regarding issuance of cheque towards legally enforceable debt. He would also assert that no documents have been produced to prove that cheque was issued to one R. Chandrashekar as asserted by the accused and regarding chit fund transaction no documents are forthcoming and mere filing of a criminal case by R. Chandrashekar against the accused does not establish the defence of the accused. Hence, it is submitted that the learned Magistrate has committed an error in acquitting the accused on assumptions and presumptions. Hence, he would seek for allowing the appeal by setting aside the impugned judgment of acquittal and sought for convicting the accused.

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After having heard the arguments and perusing

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

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“Whether the judgment of acquittal passed by the trial Court is perverse and arbitrary so as to call for any interference by this Court.”

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It is the specific contention of the accused that complainant has approached him in October-2015 for advancement of loan and trusting the accused, he with great difficulty adjusted the funds and handed over the loan of Rs.2,75,000/- to the complainant. Interestingly, in the complaint, the complainant has nowhere pleaded regarding reply notice issued by the accused. All along, complainant asserted that the amount was demanded in the month of October-2015. Interestingly, the complainant nowhere asserted as to when the loan of Rs.2,75,000/was advanced to the accused. This material pleading is completely silent in the complaint. It is hard to accept the contention of the complainant that he is unable to recollect the date or even the month of advancement of loan.

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Further, though the financial status of the complainant is not challenged, but interestingly, the

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complainant in his complaint at para No.3 itself specifically asserted that with much difficulty, he adjusted the loan amount Rs.2,75,000/- and paid it to the complainant. This assertion establish that the complainant was not having sufficient means to advance such a huge amount.

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The complainant was examined himself as PW1 and in his examination-in-chief, he has reiterated complaint allegations. In his examination-in-chief also he simply asserted that with great difficulty, he had adjusted the funds and gave a short term hand loan of Rs.2,75,000/- to the accused and demand was made in the month of October-2015. But even in examination-inchief, there is no assertion as to when exactly the loan was advanced.

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It is the specific defence of the accused that he has availed a small loan of Rs.1,00,000/- from one R. Chandrashekar and Rs.10,000/- was already paid and he was due to pay Rs.90,000/- to R. Chandrashekar. It is his further defence that at the time of availment of

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Rs.1,00,000/- loan from R. Chandrashekar, he has issued two blank cheques and one of the cheque is misused by the complainant and the complaint is got filed through present complainant by R. Chandrashekar and he himself has lodged another complaint and in this regard he placed reliance on Ex.D1 a legal notice issued

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R. Chandrashekar.

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All along, it is argued that no documents have been produced by the accused regarding chit fund transaction, as asserted. But the complainant in his crossexamination admitted that he knew one Chandru who is doing chit fund transaction and he is member of the said chit fund. He has further asserted in his cross-examination that he has advanced loan of Rs.2,75,000/-, which is received from bidding the chit with said Chandru and on the same day of receiving amount, the said amount was handed over to the accused. He claims that he is well conversant with accused since number of years and simply asserts that accused is running a club in R.T.Nagar. But

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complainant claims that he did not visit the said club and even does not know the name of the said club. He further admits that Chandru is also known to the accused. He pleads ignorance regarding said Chandru alias R. Chandrashekar filing a complaint against the present accused and he denied the suggestion that the cheque given to the R. Chandrashekar was misused by him. As observed above, the evidence of complainant itself discloses that he do not know the date or month of advancement of loan. His own assertions made in the complaint disclose that he has no financial capacity to advance such a huge loan and he advanced the loan by using the bid amount with one R. Chandrashekar, but that was not pleaded in the complaint. Even otherwise he has not produced any documents for having received the bid amount from Chandru and said Chandru was also not examined by the complainant.

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The accused was also examined himself as DW1

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and in his examination-in-chief, he has taken the defence

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regarding handing over the two cheques as a security for a loan amount availed from R. Chandrashekar and one of the cheque is being misused and in respect of another cheuqe Chandru filing a complaint against him. No doubt, he admits that Ex.P1 cheque belongs to his account and it bears his signature, but he very specifically asserts that he had handed over the said cheque to R. Chandrashekar. Though initial presumption is under Section 139 of the N.I. Act is in favour of complainant, however, in view of the own pleadings made by the complainant that with much difficulty, he could able to adjust the amount and handed over amount to the complainant, establish that he had no financial capacity. In such event the complainant ought to have produced material documents to show either his financial capacity or that he received the bid amount and he was the highest bidder by examining R. Chandrashekar alias Chandru. But that was also not done. Even he does not know when the loan was advanced. Ex.D1 discloses that R. Chandrashekar had already issued statutory notice to accused. It is admitted fact that R. Chandrashekar is

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running a chit fund transaction. Considering these aspects, the entire case of the complainant creates serious doubt and the complainant has failed to prove that the cheque was issued towards legally enforceable debt. Considering the cross-examination and inconsistent defence, non pleading date of advancement of the loan etc., it is evident that the presumption available in favour of complainant stands rebutted.

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The learned counsel for appellant has placed reliance on a decision reported in AIR 2021 SC 2814 [APS Forex Services Pvt. Ltd. v. Shakti International

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Fashion Linkers and Ors.] . But in the said case no evidence was not lead by the accused regarding repayment of the entire amount and hence, it is held that presumption is not rebutted. But in the instant case, cross-examination of complainant itself establishes that he was involved in a chit transaction conducted by R. Chandrashekar and the specific defence of the accused is that he availed loan of Rs.1,00,000/from R.

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Chandrashekar and already repaid Rs.10,000/- and two cheques were given as a security. Considering the conduct

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of the complainant, defence of the accused is more probable and principles of above case are of no availment to accused.

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The learned counsel for appellant has also placed reliance on decision reported in

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AIR OnLine 2021 SC 82 [M/s. Kalamani Tex and Anr. vs. P.Balasubramanian] . The facts and circumstances of the said case are entirely different and though the signature has been admitted, but the presumption in the instant case was rebutted and the reported case was the case of over extension of credit facility, which was not established. Hence, the facts and circumstances of the said case would not come to the aid of the appellant in any way.

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He has further placed reliance on a decision reported in AIR 2019 SC 1876 [Rohitbhai Jivanlal Patel v. State of Gujarat and Anr.] and argued that the

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rule of presumption is in favour of complainant and onus is on the accused to establish the probable defence so as to rebut the said presumption. There is no dispute regarding the said proposition of law but in the instant case, the evidence of complainant, pleadings made in the complaint, cross-examination of complainant and evidence of accused

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establish that the presumption available in favour of complainant is already rebutted and hence, the benefit of presumption under Section 139 of the N.I. Act is not available in favour of the complainant. As such complainant is required to prove a transaction independently, but he has failed to do so.

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He has also placed reliance on decision reported in 2019 (2) KAR L.R 717 (SC) [Uttam Ram v. Devinder Singh Hudan and Another]. It is again in respect of Section 118(a), 138 and 139 N.I. Act as well as statutory presumption and rebuttal. There is no dispute regarding the proposition of law laid down in the above said case. But in the instant case, the evidence on record

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clearly establishes that presumption was already rebutted by the accused and hence, the said principles cannot be made applicable to the facts and circumstances of the case in hand.

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He has also placed reliance on a decision reported in 2015 (3) AKR 147 [T. Vasanthakumar v Vijayakumari] and decision reported in ILR 2019 KAR 493 [Sri Yogesh Poojary vs. Sri. K. Shankara Bhat]. Again, it is in respect of drawing presumption under Section 139 of the N.I. Act, which is mandatory. But as observed above, the said presumption is statutory presumption and it is not a conclusive presumption. It is a rebutabble presumption and accused is required to rebut the presumption on the basis of preponderance of probability, but not as in case of the complainant regarding proof beyond all reasonable doubt. In the instant case the evidence on record and the pleadings made by the complainant establish that the accused has rebutted the presumption available in favour of

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complainant under Section 139 of the N.I. Act. Even the complainant does not know when exactly he advanced the loan including the month. Hence, once the presumption stands rebutted, the burden again shifts on the complainant to prove the transaction but in the instant case, no such evidence is placed by the complainant regarding passing of the consideration. Hence, the principles of the above said case cannot be made applicable to case in hand.

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Considering the admissions given by the complainant, the defence raised by the accused is more probable. The learned Magistrate appreciated all these facts and circumstances in proper perspective and has rightly acquitted the accused. No illegality or perversity is found in the judgment of acquittal so as to call for interference by this Court. Hence, the appeal being devoid of any merits, does not survive for consideration. Accordingly, the point under consideration is answered in the negative and as such, I proceed to pass the following:

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ORDER

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(i) The appeal stands dismissed .

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Sd/JUDGE

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DS List No.: 1 Sl No.: 15

Sri. D Somashekar v. Sri. S Giriraj

Case brief

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Sri. D Somashekar v. Sri. S Giriraj

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