Varada Leasing Investment Pvt. Ltd., Kumta Vs Subrahmanya Shivaram Bhat

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 20^TH DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR

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CRIMINAL APPEAL NO.100021 OF 2019

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BETWEEN:

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VARADA LEASING INVESTMENT PVT. LTD., KUMTA, REPRESENTED BY ITS MANAGER, SUBHAS GANAPATI SHETTY, AGE: 44 YEARS, R/O: KUMTA, TQ: KUMTA, DIST: UTTARA KANNADA – 581 343.

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…APPELLANT

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(BY SRI CHETAN NAIK, ADVOCATE APPEARED FOR M/S J. S. SHETTY ASSOCIATES, ADVOCATES)

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AND:

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SUBRAHMANYA SHIVARAM BHAT, AGE: MAJOR, R/O: BARADAHITTAL ONI, GUDEANGADI, POST: HOLANGADDE, KUMTA TALUKA, DIST: UTTARA KANNADA – 581 327.

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Digitally signed by MOHANKUMAR B SHELAR Location: High Court of Karnataka, Dharwad Bench, Dharwad

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…RESPONDENT (BY SRI M. M. HIREMATH, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF CR.P.C. SEEKING THAT THE ORDER OF ACQUITTAL DATED 18.12.2018 PASSED BY THE LEARNED SENIOR CIVIL JUDGE AND PRINCIPAL JMFC COURT, KUMTA IN C.C.NO.384/2018, MAY KINDLY BE SET ASIDE AND THE RESPONDENT MAY KINDLY BE CONVICTED IN THE OFFENCES PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENT ACT, BY ALLOWING THIS APPEAL WITH THE COST THROUGHOUT IN THE ENDS OF JUSTICE AND EQUITY.

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR

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ORAL JUDGMENT

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This appeal is filed by appellant/complainant praying to set-aside the judgement of acquittal dated 18.12.2018 passed in C.C.No.384/2018 by Senior Civil Judge and Principal JMFC, Kumta, whereunder, respondent/accused has been acquitted for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘138 of N.I. Act’, for short)

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The case of appellant/complainant in brief is as under:

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The appellant/complainant is a financial institution dealing with loans and advances. The respondent/accused approached the complainant and sought for a loan of Rs.30,000/- for the purpose of business on 31.07.2008. He has executed Agreement, Promissory Note and Loan papers and loan of Rs.30,000/- was granted to the

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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accused. The accused became defaulter and did not repay the loan, hence, when insisted for repayment, he issued a cheque bearing No.667432 for Rs.36,558/dated 13.05.2015 drawn on Karnataka Bank, Kumta Branch towards repayment of loan amount. The said cheque was presented for collection. It was returned dishonoured for the reason ‘Funds Sufficient’. The complainant got issued legal notice on 29.05.2015 calling upon the respondent/accused to repay the cheque amount within 15 days. The notice has been served to accused on 01.06.2015. The accused did not repay the cheque amount and he has issued reply to the said notice. Therefore, complainant filed private complaint against the respondent/accused for offence under Section 138 of N.I. Act.

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Learned Magistrate has taken cognizance and registered C.C.No.384/2018 against the

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respondent/accused for offence under Section 138 of N.I. Act. The plea of the accused has been recorded. The

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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complainant in order to prove his case, has examined three witnesses as PW-1 to PW-3 and got marked documents as Exs.P-1 to P-7. Ex.D-1 to D-3 are marked in the cross examination of PW-1. The statement of accused has been recorded under Section 313 of Cr.P.C.

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The learned Magistrate after hearing the arguments on both sides, has formulated the points for consideration and passed the impugned judgement for acquittal. The said judgement of acquittal has been challenged by the complainant in this appeal.

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Heard learned counsel for appellant. Learned counsel for respondent is absent.

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Learned counsel for appellant would contend that the respondent/accused has admitted his signature on cheque-Ex.P-2 and therefore, presumption has to be drawn under Section 139 of N.I. Act. The said presumption has not been rebutted. Merely because, the earlier case filed by the appellant for dishonour of cheque and

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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settlement of the same will not come in the way of case of

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the complainant. With this, he prayed to allow the appeal.

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Having heard learned counsel, the Court has perused the impugned judgement and trial Court records.

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It is the specific case of the

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appellant/complainant that it is a company, dealing with loans and advances and it has advanced loan of Rs.30,000/- to the respondent/accused on 31.07.2008 and in order to repay the said amount borrowed, respondent/accused has issued a cheque-Ex.P-2 for Rs.36,558/- dated 13.05.2015. The respondent/accused has not denied his signature on cheque i.e., Ex.P-2. As the

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respondent has not denied the signature on chequeEx.P-2, a presumption has to be drawn under Section 139 of N.I. Act that the cheque is issued for discharge of the debt. The said presumption is a rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probability.

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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The respondent/accused has taken up the defence that earlier he has issued a cheque towards repayment of entire amount borrowed and it was dishonoured, the complainant filed a criminal case for offence under Section 138 of N.I. Act and there was a settlement in the said matter and he has repaid the entire loan amount and there is no amount due to the appellant/complainant.

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PW-1 in his cross-examination has admitted that in reply-Ex.P-7, the accused has stated that he has repaid the entire loan amount. PW-1 has also admitted that case filed in C.C.No.687/2009 against respondent/accused for dishonour of cheque. Ex.D-1 is copy of complaint in C.C.No.687/2009, Ex.D-2 is copy of deposition of PW-1 recorded in C.C.No.687/2009 and Ex.D-3 is cheque involved in the said C.C.No.687/2009 and its bearing No.667431. PW-1 in his cross-examination

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has admitted Ex.D1 to D3. In Ex.D-1, it is stated that cheque in that case has been issued for payment of entire

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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loan amount. In Ex.D-2 also it is stated that cheque has been issued for payment of entire loan amount.

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Cheque in the said C.C.No.687/2009, copy of

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which is at Ex.D-3 is dated 08.05.2009 and drawn for Rs.34,340/-. The amount borrowed as stated in Ex.D-1

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and D-2 is Rs.30,000/- and date of borrowing is 31.07.2008. The date of borrowing and the loan involved in the present case and C.C.No.687/2009 are one and the same. When the respondent/accused has taken up the specific defence that he has repaid the entire loan amount, the complainant ought to have produced the statement of loan amount to show what was amount due by the respondent/accused. The complainant has not produced the statement of the loan amount or any documents pertaining to the said loan availed by the respondent/accused namely, loan application, promissory note, agreement etc. Considering the said aspect, the complainant has failed to establish that a sum of

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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Rs.36,558/-(Amount of cheque-Ex.P-2) is due towards the loan of respondent/accused.

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The respondent/accused has taken up the defence that he had issued cheques as the security at the time of filing of loan application and it has been misused. On perusal of serial numbers of cheques involved in the present case and involved in the earlier case i.e., C.C.No.687/2009, they are in consecutive numbers. Cheque involved in C.C.No.687/2009 is bearing No.667431. Cheque involved in the present case is bearing No.667432. Cheque bearing Sl.No.667431 is dated 08.05.2009 (Copy of which is at Ex.D-2) and cheque-Ex.P2 is bearing No.667432 is dated 13.05.2015. There is a gap

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of 6 years between the dates of the said two chques. Considering all these aspects, the respondent/accused has rebutted the presumption drawn under Section 139 of N.I. Act. The cheque which is at Ex.P-2 has been issued for discharge of debt and respondent/accused is due Rs.36,558/- towards his loan to the appellant/company in

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NC: 2025:KHC-D:5148 CRL.A No. 100021 of 2019

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order to establish that appellant/company has not produced any documents. Considering all these aspects, the learned Magistrate has rightly acquitted the respondent/accused for offence under Section 138 of N.I. Act by a reasoned judgement. There are no grounds made out for allowing the appeal.

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13. In the result, the appeal is dismissed.

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SD/(SHIVASHANKAR AMARANNAVAR) JUDGE

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RKM/CT-ASC List No.: 1 Sl No.: 45

Varada Leasing Investment Pvt. Ltd., Kumta v. Subrahmanya Shivaram Bhat

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Varada Leasing Investment Pvt. Ltd., Kumta v. Subrahmanya Shivaram Bhat

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