Smt Shashikala Aithal Vs Sri D J Partha Sarathy

THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED 26.09.2011 PASSED BY XIX ADDITIONAL C.M.M. BANGALORE IN C.C.NO.9091/2007 ACQUITTINGTHERESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 17.07.2025 AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THE COURT DELIVERED THE FOLLOWING:

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CORAM: HON'BLE MR JUSTICE S RACHAIAH

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HC-KAR

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CAV JUDGMENT

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(PER: HON'BLE MR. JUSTICE S RACHAIAH)

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This appeal has been filed by the complainant being aggrieved by the judgment of acquittal passed by the Trial Court dated 26.09.2011 in C.C.No.9091/2007 on the file of the XIX Addl. Chief Judicial Metropolitan Magistrate, Bangalore.

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The ranks of the parties henceforth will be considered as per their rankings before the Trial Court, for convenience.

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Factual matrix of the case:

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It is the case of the complainant that the accused

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had taken a loan of Rs.2,50,000/- towards his business of bakery and agreed to repay the said amount within three months. However, the accused has not repaid the amount as agreed upon. Therefore, the complainant insisted the accused to repay the amount. In the mean time, cheque was issued by the accused to discharge his legally enforceable debt or liability. The complainant presented the said cheque for encashment, it is returned with a shara as “account closed”. A Legal notice

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came to be issued to the accused in that regard, in spite of notice have been served, the accused has not repaid the cheque amount. Hence, the present complaint.

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The accused took defence stating that he had not borrowed loan from the present complainant and hence not issued any cheque in favor of the complainant. According to the accused his wife Vijayalakshmi had taken loan of Rs.1,00,000/from one Govinda who is elder brother of the complainant. Towards, the said transactions his wife had given two blank cheques with brother of the complainant and also the accused had issued two signed blank cheques to the said Govinda. The complainant has misused the present cheque and claimed the amount which is not proper and he prays to dismiss the complaint.

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The Trial Court after considering the oral and documentary evidence on record, accepted the contention of the accused an acquitted him.

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Being aggrieved by the same, the complaint before

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this Court.

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Heard Sri. S. Sampangi Ramaiah, appointed as

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Amicus Curiae to represent the complainant/appellant as the complainant and his representative not representing the case and Sri, M.K.Venkatramanan, learned counsel for respondent.

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It is the submission of the learned Amicus Curiae that the issuance of the cheque even though had not been admitted by the accused, the fact remains that the signature and cheque have not been disputed. However, the accused took the plausible defence stating that the cheque had been issued to the brother of the complainant, the said cheque has been misused by the complainant.

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It is further submitted that there are number of judgments of Hon’ble Supreme Court stating that, initially, the accused has to rebut the presumption once he admitted the signature and cheque. Further, he submitted that the accused though had taken defence that he had not borrowed any amount and also stated that the cheques were given to the brother of the complainant, the fact remains that, he had not taken any steps to take appropriate occasion against the said Govinda after having considered the matter with him.

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Therefore, the manner in which the Trial Court recorded the conviction appears to be not appropriate and the same is erroneous. Therefore, the judgment of acquittal has to be set aside.

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Per Contra, the learned counsel for the respondent vehemently justified the judgment of acquittal passed by the Trial Court by contending that the accused, in fact, had transactions with the brother of complainant. The wife of the accused had issued two cheques of Rs.50,000/- each. The matter has been considered between the wife of the accused and the brother of the complainant for a sum of Rs.90,000/-. Two cheques were given as a security to the brother of the complainant in respect of the transaction held between his wife and brother of the complainant. The cheque has been misused and the same has been presented for encashment with an intention to gain wrongfully.

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It is further contended that the Trial Court after appreciating the oral and documentary evidence on record opined that it is a fit case to acquit the accused. Hence, interference with the said findings may not be necessary. In

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support of his contention the learned counsel for the

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respondent relied on the following three judgments:

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1. S.P. Rajkumar Vs. M.J.Prabhakar reported in 2024 (1) KAR.L.R.168.

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2. Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418.

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3. Dashrathbhai Trikambhai Patel Vs. Hitesh Mahendrabhai Patel and Anr. reported in (2023) 1 SCC 578.

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Having heard learned counsel for the respective parties and also perused the findings of the Trial Court in recording the acquittal, the case of the complainant is that she has lent an amount of Rs.2,50,000/- to the accused for his legal necessities. When she insisted him to repay the amount he is stated to have issued cheque for the said amount. When it was presented for encashment, it came to be dis-honoured with a shara “account closed”. Thereafter, in spite of notice having been issued, the accused has neither repaid the amount nor replied to the said notice.

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Now, it is relevant to refer the proposition of law relating to N.I Act. The Hon’ble Supreme Court in the case of

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Tedhi Singh Vs. Narayan Dass Mahant¹ , in paragraph

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No.10 , which reads as under:

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“10. The trial court and the first appellate court have noted that in the case under Section 138 of the NI Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the NI Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the crossexamination of the witnesses of the complainant. Ultimately, it becomes the duty of the courts to

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1(2022) 6 SCC 735

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consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.”

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On careful reading of the dictum of the Hon’ble

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Supreme Court, it makes clear that the accused may adduce direct evidence to prove that the cheque in question was not supported by consideration and that there was no debt or liability to be discharged by him. It is needless to say that once the execution of the cheque is admitted, Sec.139 of N.I. Act mandates a presumption that cheque was for the discharge of any debt or liability.

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Admittedly, in this case, the accused had admitted that he had issued two signed blank cheques to the brother of the complainant Govinda for having obtained loan by his wife. Except mentioned that those cheques were issued to the brother of the complainant, nothing has been produced to show that the cheques were issued to the Govinda. In the business of cogent evidence that cheques were issued to the Govinda as a security, that itself is not sufficient to hold that the accused has

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rebutted the presumption. However, the Trial Court committed grave error that accused has rebutted presumption which is contrary to the law laid down by the Hon’ble Supreme Court in the case of BirSingh Vs. Mukesh Kumar² paragraph

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Nos.18, 20 and 24 , which reads as under:

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“18. In passing the impugned judgment and order dated 21-11-2017 [Mukesh Kumar v. Bir Singh, 2017 SCC OnLine P&H 5352] , the High Court misconstrued Section 139 of the Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Needless to mention that the presumption contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.

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20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution

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2 (2019) 4 SCC 197

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to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal [Hiten P. Dalal v. Bratindranath Banerjee, (2001) 6 SCC 16 : 2001 SCC (Cri) 960] .

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24. In K.N. Beena v. Muniyappan [K.N. Beena v. Muniyappan, (2001) 8 SCC 458 : 2002 SCC (Cri) 14] , this Court held that in view of the provisions of Section 139 of the Negotiable Instruments Act read with Section 118 thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denials/averments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability.”

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On careful reading of the dictum of Hon’ble Supreme Court, it makes clear that mere denial is not enough

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to rebut the presumption. In the present case except denying the transactions with the complainant, not elicited anything to rebut the presumption. Therefore, I am of the considered opinion that, the Trial Court committed error by misconceived the facts and law. Hence, the acquittal order passed by the Trial Court is liable to be set aside.

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In the light of the observations made above, I proceed to pass the following:

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ORDER

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i. The Criminal Appeal is allowed .

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ii. The accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881, and he is sentenced to pay a sum of Rs.3,00,000/- for the offence punishable under Section 138 of Negotiable Instruments Act, 1881, in default he shall undergo simple imprisonment for a period of 1.5 years.

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iii. The Registry is directed to send the Trial Court Records for further proceedings.

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Sd/(S RACHAIAH) JUDGE

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NM List No.: 2 Sl No.: 38

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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[SMT SHASHIKALA AITHAL VS. SRI D J PARTHA SARATHY]

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13.08.2025 (VIDEO CONFERENCING / PHYSICAL HEARING)

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CORAM: HON'BLE MR. JUSTICE S RACHAIAH

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ORDERS ON ‘FOR BEING SPOKEN TO’

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This Court vide order dated 29.07.2025 allowed the appeal. While passing the said order, the remuneration of learned Amicus Curiae for appellant was left out. Now, it is relevant to mention the remuneration of learned Amicus Curiae as ‘Point No.iv’ in the operative portion of the said order, which read as under:

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“iv. The assistance rendered by the learned Amicus Curiae is appreciated. The same is placed on record. The Legal Services Authority is directed to pay remuneration of Rs.5,000/- (Rupees Five Thousand only) to the learned Amicus Curiae for his effective assistance forthwith.”

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Sd/(S RACHAIAH) JUDGE

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UN

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List No.: 2 Sl No.: 13

Smt Shashikala Aithal v. Sri D J Partha Sarathy

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Smt Shashikala Aithal v. Sri D J Partha Sarathy

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