Dismissed

Sri S Ramachandra Reddy v. Sri Asadulla

Karnataka HC2 Aug 2024CRL.A/468/2012

Case brief

AI extract

What is this about?

In this criminal appeal, the High Court of Karnataka dismissed the appeal against an order of acquittal. The appellant challenged the acquittal in a Section 138 NI Act case where the cheque was admitted but the complainant failed to prove the source of funds and the existence of a legally recoverable debt, which was necessary to sustain the presumption.

What did the court decide?

The Criminal Appeal was dismissed, upholding the acquittal of the respondent.

Sri S Ramachandra Reddy Vs Sri Asadulla — Cheque Dishonour | Karnataka HC (2024)

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1 - NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 2^ND DAY OF AUGUST, 2024

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BEFORE

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THE HON'BLE MRS JUSTICE M G UMA

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CRIMINAL APPEAL NO. 468 OF 2012

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BETWEEN:

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SRI. S. RAMACHANDRA REDDY S/O. CHIKKA SUBBANNA AGED ABOUT 55 YEARS RESIDING AT NO.387/4 9^TH MAIN, VIJAYANAGAR BANGALORE - 40

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Digitally signed by NANDINI B G Location: high court of karnataka

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(BY SRI. PARAMESH KUMAR H.K., ADVOCATE)

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AND:

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…APPELLANT

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SRI ASADULLA S/O. GUL AHMED AGED ABOUT 40 YEARS RESIDING AT NO.3 NEW NO. 64, 9^TH CROSS JUMMA MASJID ROAD (OPH ROAD) SHIVAJINAGAR BANGALORE. WORKING AT: MOTOR INDUSTRIES COMPANY LIMITED, (MICO), NOW CALLED AS BOSCH, EMPLOYEE NO.4482 DEPARTMENT NO.7180 AUDUGODI, HOSUR ROAD BANGALORE - 560 030.

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…RESPONDENT

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(BY SRI. SIJI MALAYIL, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C PRAYING TO SET ASIDE THE ORDER DATED: 27.2.12 PASSED BY THE XIX ADDL.C.M.M., BANGALORE IN C.C.NO.15606/07 -

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NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT.

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THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS JUSTICE M G UMA

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ORAL JUDGMENT

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The complainant in CC No.15606 of 2007 on the file of the learned XIX Additional Chief Metropolitan Magistrate, Bengaluru, is impugning the judgment dated 27.02.2012 acquitting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act (for short 'the NI Act').

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For the sake of convenience, the parties shall be referred to as per their rank and status before the Trial Court.

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Brief facts of the case are that, it is the contention of the complainant before the Trial Court that he was having acquaintance with the accused since several years and the accused had requested for lending the amount. The complainant had lent Rs.2,00,000/- during April 2004 and Rs.3,00,000/- during September 2004 and thereby, he has lent in all Rs.5,00,000/-. Towards repayment of loan, the accused

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had issued the cheques as per Exs.P1 and 2 for Rs.2,50,000/each on 15.11.2006. Those cheques were presented for

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3 - NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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encashment. Both were dishonored as there was insufficient funds. Legal notice was issued which was served on the accused. But the accused has neither replied nor complied with the demands made therein, thereby he has committed the offence punishable under Section 138 of NI Act. Accordingly, the complainant requested the Trial Court to initiate action against the accused.

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The complainant examined himself as PW1 and got marked the documents Exs.P1 to P13 in support of his contention. The accused denied all the incriminating materials available on record in his statement recorded under Section 313 of Cr.P.C and examined himself as DW1. He got marked Exs.D1 to D4 in support of his defence. The Trial Court has taken into consideration all these materials on record and came to the conclusion that the complainant is not successful in proving the guilt of the accused beyond reasonable doubt. Accordingly, passed the impugned judgment acquitting the accused.

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Heard Sri H K Paramesh Kumar, learned counsel for the appellant and Sri Siji Malayil, learned counsel for the

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NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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respondent. Perused the materials including the Trial Court records.

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Learned counsel for the appellant - complainant contended that the appellant had served in the Institution and had taken VRS during 2001. At that point of time, he had Rs.3,00,000/and it was with him. The remaining Rs.2,00,000/- was obtained by him from his friend and gave Rs.5,00,000/- to the accused. The accused had admitted that Exs.P1 and 2 are the cheques belonging to him and he also admitted his signatures found therein. Under such circumstances, presumption under Section 139 of NI Act arises and the burden lies on the accused to rebut the same. The accused has not rebutted the said presumption and therefore, he is liable for conviction. The Trial Court has not taken into consideration any of these facts and circumstances and acquitted the accused without any basis.

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Learned counsel placed reliance on the decision of the Hon'ble Apex Court in the case of M/s Kalamani Tex and another Vs P Balasubramanian¹ , in support of his contention

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1 (2021) 5 SCC 283

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5 - NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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that once the signature on the cheque is admitted, presumption under Sections 118 and 139 of NI Act would operate and on the failure of the accused to rebut the presumption, the accused is liable for conviction. Accordingly, he prays for allowing the appeal.

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Per contra, learned counsel for the respondent opposing the appeal submitted that the accused and the complainant are strangers. The accused is working in MICO industry with one Shantappa, who is the brother-in-law of the complainant and the accused in fact had borrowed the amount from Shantappa and had issued 6 cheques with his signature in favour of the said Shantappa. Even after repayment of the loan amount, the said Shantappa has misused the cheques. Therefore, the accused had issued legal notice as per Ex.D1 to Shantappa, calling upon him to return all the cheques. It is only thereafter the complainant managed to get two cheques from Shantappa who is his brother-in-law and fill it up his name and misused the cheques.

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Learned counsel submitted that PW1 categorically stated that he had taken VRS during 2001 and had kept

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6 - NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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Rs.3,00,000/- in the bank. No bank statement is produced to show that he was having the said amount with him. Therefore, the financial capacity of the complainant is not proved. When the complainant has not discharged his initial burden, the accused is entitled for acquittal. The Trial Court has rightly considered the materials on record and acquitted the accused. There are no reasons to interfere with the same. Accordingly, he prays for dismissal of the appeal.

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In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is:

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"Whether the appellant has made out any grounds to allow the appeal and to convict the accused for the offence punishable under Section 138 of NI Act?"

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My answer to the above point is in the 'Negative' for the

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following:

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REASONS

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It is the contention of the complainant that he had lent Rs.2,00,000/and Rs.3,00,000/during April and

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7 - NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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September, 2004 respectively. The accused issued Exs.P1 and 2 on 15.11.2006 for Rs.2,50,000/- each towards legally recoverable debt. The cheques were dishonored. In spite of service of notice, there was no reply nor there was compliance with the demand made and thereby, the accused has committed the offence as stated above.

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To prove the contention, the complainant examined himself as PW1. During cross examination, he categorically stated that he took VRS during 2001 and got Rs.3,00,000/which was kept by him in his bank account. The said amount was given to the accused. It is his further contention that he had obtained hand loan of Rs.2,00,000/- from his friend and given it to the accused. No scrap of paper is produced to substantiate the said contention. Moreover, when the complainant is not having sufficient cash with him, there was no necessity for him to obtain loan from his friend and give it to the accused.

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To a pointed query, learned counsel for the appellant submits that the loan that was obtained from his friend is already returned to him by cash. There are no

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documents to substantiate the said fact as well. Hence, the said contention is hard to believe.

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The next contention is with regard to the contention taken by the complainant that he had Rs.3,00,000/- with him when he took VRS during 2001 and he had kept in his bank account and the same was given to the accused. When the complainant has withdrawn the amount and paid to the accused, he could have produced either pass book or the bank statement. No such steps are taken by the complainant for the reasons best known to him.

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It is the defence taken by the accused while deposing before the Trial Court when he was examined himself as DW1 that, Shantappa, is the brother-in-law of the complainant and he had issued legal notice as per Ex.D1 to the said Shantappa for misusing the cheques given to him. Ex.D1 is dated 27.10.2006. It is pertinent to note that the cheques - Exs.P1 and 2 are dated 15.11.2006. It is immediately after issuance of Exs.P1 and 2, the said Shantappa said to have been issued reply to the accused as per Ex.D3 on 19.01.2007 i.e., just prior to filing of the present complaint. Even though there

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is no reference to the cheques Exs.P1 and 2 in Ex.D1, the admission of PW1 that the said Shanthappa is his brother-inlaw to whom Ex.D1 is addressed assumes importance. By placing these materials on record, the accused is successful in rebutting the presumption under Sections 118 and 139 of NI Act. The reverse burden lies on the complainant to prove his contention regarding his financial status and lending of the amount to the accused. But the complainant is not successful in proving the same.

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Learned counsel for the appellant places reliance on the decision in M/s Kalamani Tex (supra). On facts of the case, the complainant was the proprietor of a garment company and was engaged with the accused in the business arrangement to jointly export garments to France. In the course of business, accused No.2 had issued the cheque on behalf of accused No.1 and the same came to be dishonored on presentation. When accused No.2 took the defence that consideration had never passed on to him and probabalised such defence, he is not liable for conviction. The Hon'ble Apex

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NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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Court by referring to the decision in Rohitbhai Jivanlal Patel Vs State of Gujarat² held as under:

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"In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant’s case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused…..”

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(Emphasis supplied)

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The Hon'ble Apex Court also referred to its earlier decision in Bir Singh Vs Mukesh Kumar³ , wherein, it is held

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2 (2019) 18 SCC 106

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3 (2019) 4 SCC 197

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NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of legal debt.

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There cannot be any dispute with regard to the proposition of law. It is to be held that when the complainant places relevant materials and deposes about his contention, he discharges his initial burden and the legal presumption under Section 139 of NI Act arises. Then the burden is on the accused to rebut the presumption. But when the accused takes a defence and probabalises the same, the complainant is required to prove his contention regarding lending of the amount, existence of legally recoverable debt and issuance of cheque in question towards the same. In the present case, admission given by PW1 during cross examination coupled with the production of Exs.P1, P2 and Ex.D1 and the evidence of DW1, it is to be held that the accused has probablised his defence. The complainant has not discharged the burden placed on him. Under such circumstances, the accused is entitled for acquittal.

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NC: 2024:KHC:30704 CRL.A No. 468 of 2012

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I have gone through the impugned judgment

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passed by the Trial Court. It has taken into consideration all the oral and documentary evidence placed before it and has arrived at a right conclusion. I do not find any perversity or illegality in the judgment passed by the Trial Court. There are no reasons to interfere with the order passed by the Trial Court. Hence, I answer the above point in the Negative and proceed to pass the following:

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ORDER

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The Criminal Appeal is dismissed.

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Sd/(M G UMA) JUDGE

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*bgn/CT:VS List No.: 1 Sl No.: 16

Sri S Ramachandra Reddy v. Sri Asadulla

Case brief

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Sri S Ramachandra Reddy v. Sri Asadulla

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