High Court allowed criminal appeal challenging acquittal under Section 138 N.I. Act. Court held acquittal was perverse as financial capacity was unchallenged, mandating presumption under Section 139. Accused convicted and sentenced.
Appeal allowed; acquittal set aside; respondent convicted and sentenced to fine of Rs. 2,50,000 and six months' default imprisonment.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 11TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR CRIMINAL APPEAL NO. 329 OF 2018 (A)
BETWEEN:
SMT. MARY VINYA, W/O SRI. JAMES, AGED ABOUT 40 YEARS, R/O. MUTHAPPA TEMPLE ROAD, KARMAD VILLAGE, AMMATHI POST, VIRAJPET TALUK - 571 218, KODAGU DISTRICT.
…APPELLANT
(BY SRI. RAJARAMA SOORYABAIL, ADVOCATE)
AND:
SMT. REMA, W/O. SASHI, AGED ABOUT 45 YEARS, Digitally R/O. POLIBETTA ROAD, signed by SOWMYA D KARMAD VILLAGE, AMMATHI POST, Location: VIRAJPET TALUK - 571 518, High Court KODAGU DISTRICT. of Karnataka
…RESPONDENT
(BY SRI. P. UDAYASHANKAR RAI, ADVOCATE)
THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 05.01.2018, PASSED BY THE PRINCIPAL CIVIL JUDGE AND JMFC, VIRAJPET, IN C.C.NO.264/2015, ACQUITTING THE RESPONDENT FOR THE OFFENCE P/U/S 138 OF THE N.I. ACT.
CRL.A No. 329 of 2018 NC: 2023:KHC:44793
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
This appeal is filed by the appellant/complainant
under Section 378(4) of the Cr.P.C. challenging the judgment of acquittal passed by the Principal Civil Judge and JMFC, Virajpet in C.C.No.264/2015 dated 05.01.2018.
referred with the original ranks occupied by them before
the Trial Court.
The complainant is well acquainted with the accused and he has availed loan of Rs.1,50,000/- from the complainant in month of January 2015, and towards the discharge of the said amount, she has issued the cheque for a sum of Rs.1,50,000/-, dated 20.02.2015, drawn on Canara Bank, Ammathi Branch. When the complainant presented the said cheque, it was returned with an
endorsement as 'insufficient funds'. Then the complainant has issued a legal notice to the accused and in spite of the service of the legal notice, the accused neither paid the amount nor replied to the legal notice. Hence, she has filed a complaint under Section 200 of the Cr.P.C., before the learned Magistrate alleging that the accused has committed an offence under Section 138 of the Negotiable Instruments Acts, 1881 (for short ‘N.I. Act’ 1881).
and placed reliance on 5 documents marked at Ex.P1 to Ex.P5. After the conclusion of the evidence of the complainant, the statement of the accused under Section
313 of Cr.P.C. was recorded to enable the accused to explain the incriminating evidence appearing against her. The case of the accused is of total denial. She got examined herself as RW.1, and another witness was examined on her behalf as RW.2.
the appellant is before this Court by way of this appeal.
counsel for the appellant and the learned counsel for the respondent. Perused the records.
contend that the accused has not disputed the cheque and signature on the cheque and hence, the presumption under Section 139 of the N.I. Act, is in favour of the complainant. It is also asserted that the learned Magistrate has acquitted the accused only on the ground of financial status of the complainant but failed to consider the fact that, the financial status was never challenged and there is no reply to the legal notice issued. Hence, he would contend that the learned Magistrate has proceeded on assumption and presumption and as such, he would seek for allowing the appeal by setting aside the impugned judgment of acquittal by convicting the
accused/respondent herein.
has rightly appreciated this aspect and acquitted the accused, and when the said judgment is well reasoned one, it does not call for any interference. Hence, he would seek for dismissal of the appeal.
records, now the following point would arise for my consideration.
"Whether the judgment of acquittal passed by the learned Magistrate on the file of Principal Civil Judge & JMFC., Virajpet in C.C.No.264/2015 vide judgment dated 05.01.2018 is perverse, arbitrary and erroneous, so as to call for any interference by this Court.
accused has availed a loan of Rs.1,50,000/- from her and in discharge of the said debt, the disputed cheque under Ex.P1 came to be issued. It is an undisputed fact that, the cheque belongs to the accused and bears the signature of
the accused. Hence, the initial presumption under Section 139 of the N.I. Act, is in favour of the complainant to the effect that the cheque was issued towards legally enforceable liability. The drawing of the said presumption is mandatory and the accused is at liberty to rebut the said presumption by way of cross-examination or by leading the evidence in this regard.
the presumption but the records disclose that the accused, who has examined as DW.1, all along asserted that she had issued a reply notice. She also asserted that she had produced the copy of the reply notice, but she has not replied and she has not even produced the copy of the reply notice if she had replied. Ex.P3 is the legal notice and Ex.P5 is the postal acknowledgment for service of notice to the accused which is admitted.
complainant has raised a defence that the complainant, accused and others have formed an association and they were doing money lending business and towards security of these transactions, cheques were issued. The suggestion came to be denied by the complainant. However, during the examination-in-chief the accused who got examined herself as DW.1 has put forward a new defence asserting that the complainant was financing the amount on interest basis and she used to collect the interest from the others and used to handover the same
to the complainant. It is also asserted that, she used to get payment for her work and as a security, the complainant had obtained two blank cheques and as some of the parties, who had borrowed the money, did not return the same to the complainant, he misued the cheques. This statement is completely a new statement and in the cross-examination of PW.1, a suggestion was made that the complainant and the accused along with others were doing money lending business, but in the evidence, the accused has tried to set up a defence that the complainant alone was doing money lending business and she used to collect the installment and the interest from the borrowers and used to pay the same to the complainant, for which she was being paid, which is a new defence. Hence, it is evident that, the accused is taking inconsistent defences and she has not rebutted the presumption available in favour of the complainant.
complainant, held that the transaction is improbable. However, when the financial status of the complainant itself is not challenged by the accused, question of considering the capacity of the complainant to advance the loan, does not arise at all as under Section 139 of the N.I.Act, it is mandatory for the Court to draw a presumption. In this regard, it is relevant to refer the citation reported in the case of RAJESH JAIN Vs. AJAY SINGH reported in (2023) 10 Supreme Court cases 148. In view of these facts and circumstances, the entire approach of the learned Magistrate is perverse, arbitrary and erroneous and when the judgment is based on perversity, the judgment calls for interference by this Court.
two years or fine which may be extend to the double of the cheque amount or both. The transaction is of nearly eight years old and considering these facts and circumstances, in my considered opinion, it is just and proper to impose fine of Rs.2,50,000/- to the complainant which would serve the purpose. As such, the point under consideration is answered in the affirmative and hence, I proceed to pass the following:
ORDER
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simple imprisonment for a period of six months.
Sd/JUDGE
URN
List No.: 1 Sl No.: 16 CT: BHK
2 issues framed by the court
Whether the judgment of acquittal based on unchallenged financial capacity of the complainant was perverse and arbitrary calling for interference.
Whether the accused rebutted the presumption under Section 139 of the N.I. Act regarding the cheque being for a legally enforceable debt.
Colour shows how this judgement treated each authority
RAJESH JAIN Vs. AJAY SINGHExplained¶15
(2023) 10 Supreme Court cases 148
3 provisions across 2 enactments
SMT. MARY VINYA
SMT. REMA
RAJENDRA BADAMIKAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
