M/S M K Agro Tech Pvt. Ltd. Vs Smt. Renuka

¶1

1 -

¶2

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12^TH DAY OF MARCH, 2025

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR

¶6

CRIMINAL APPEAL NO. 1183 OF 2022 (A)

¶7

BETWEEN:

¶8

M/S M.K.AGRO TECH PVT LTD HAVING REGISTERED OFFICE AT NO.389 M.B.ROAD, KAVERI LAYOUT SRIRANGAPATNA-571 438 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR. ASHFAQ AHMED R

¶9

…APPELLANT

¶10

(BY SRI. PRAVEEN M.T, ADVOCATE)

¶11

AND:

¶12

Digitally signed by SHAKAMBARI Location: HIGH COURT OF KARNATAKA

¶13

SMT. RENUKA W/O LATE GAVI RANGAPPA AGED ABOUT 60 YEARS R/AT NO.401/2 SANNA KURUBARA STREET OLD BHADRAVATHI SHIVMOGGA-577 301

¶14

…RESPONDENT

¶15

(RESPONDENT SERVED, UNREPRESENTED)

¶16

THIS CRL.A IS FILED U/S.378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT OF ACQUITTAL DATED 29.04.2022 PASSED BY THE LXI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, BENGALURU (CCH-62) IN CRL.A.NO.2224/2018 AND CONFIRM THE JUDGMENT DATED 27.10.2018 (ANNEXURE-A) PASSED BY THE XXIV ADDITIONAL SMALL CAUSES JUDGE AND XXII ADDL.C.M.M., (SCCH-26), BENGALURU.

¶17

2 -

¶18

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶19

THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

¶20

CORAM: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR

¶21

ORAL JUDGMENT

¶22

This appeal is directed against the judgment of acquittal dated 29.04.2022 passed by the LXI Addl. City Civil and Sessions Judge, Bengaluru (CCH-62) in Criminal Appeal No.2224/2018 by setting aside the judgment of conviction and sentence dated 27.10.2018 passed by the XXIV A.S.C.J and XXII A.C.M.M (SCCH-26), Bengaluru in C.C.No.1068/2018.

¶23

The parties to this appeal are referred to as per their rank before the trial Court for convenience.

¶24

The facts leading up to this appeal are as under:

¶25

The complainant/appellant filed a complaint under Section 200 of Cr.P.C against the accused alleging offence punishable under Section 138 of the Negotiable

¶26

3 -

¶27

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶28

Instrument Act, 1881 (for short 'NI Act'), stating that, complainant is a 'cooking oil manufacturing company' and the accused was the distributor of 'Sunpure cooking oil', running her business under the name and style of 'Renuka Enterprises and Trading', Brigade Road, Bhadravathi. It is stated that, the complainant's company has supplied the 'Sunpure cooking oil' to the accused on credit basis. The accused used to repay the amount for having received this cooking oil. It is stated that, in discharge of the said amount towards purchase of the 'Sunpure cooking oil' on 27.12.2017, accused issued a cheque bearing No.691663 in the name of the complainant drawn on SBI, Old Town area Branch Bhadravathi. When the said cheque was presented by the complainant for encashment on the same day i.e. 27.12.2017, it was dishonoured for want of 'Sufficient Funds' in the account of the accused. Thereafter, the complainant issued the statutory notice on 17.01.2018 and called upon the accused to make a payment of money mentioned in the cheque. The accused did not issue any reply. Therefore, the complainant filed a

¶29

4 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶30

complaint before the XXIV A.S.C.J and XXII A.C.M.M (SCCH-26), Bengaluru, which was subsequently registered as C.C.No.1068/2018 by the trial Court. The accused was summoned before the trial Court and she was enlarged on bail. The plea was recorded under Section 138 of the NI Act for which she pleaded not guilty.

¶31

To substantiate the case of the complainant, one Sri.Manjunath Umasutha, entered the witness box as PW.1 and got marked Exs.P.1 to 8 and closed his evidence. Thereafter accused was questioned under Section 313 of Cr.P.C so as to enable her to answer the incriminating evidence appearing in the complainant's evidence. She denied her complicity in the crime. To rebut the evidence of the complainant, accused herself entered the witness box as DW.1, none of the documents are marked on her behalf.

¶32

Learned trial Court on hearing the arguments of

¶33

both the sides and on evaluation of the evidence found the accused guilty of committing the offence under Section

¶34

5 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶35

138 of the NI Act and accused was convicted and sentenced for the said offence with a direction to pay fine of Rs.3,00,000/- (Rupees Three Lakhs only). In default of payment of fine, she shall suffer simple imprisonment for 6 months. It is further ordered that, if the fine amount is realized, Rs.2,95,000/- has to be paid as compensation to the complainant and remaining Rs.5,000/- is defrayed to the state for the expenses incurred.

¶36

This judgment of conviction and sentence passed by the trial Court was challenged by the accused before the LXI Addl. City Civil and Sessions Judge, Bengaluru (CCH-62) by filing appeal in Criminal Appeal No.2224/2018. The learned First Appellate Court after hearing the arguments and on re-evaluation of the evidence, found that, the accused had failed to prove his case with regard to the legally enforceable debt and consequentially by observing that, as the accused was a retail business woman and purchased the an oil as credit basis but as there was incentives to be paid, on that

¶37

6 -

¶38

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶39

ground, the said appeal came to be allowed and consequentially, the accused is acquitted. This is how,

¶40

now the appellant/complainant is before this Court challenging the judgment of the First Appellant Court.

¶41

Though notice of this appeal is served on the respondent, she remained unrepresented. The learned counsel, Sri.Praveen M.T., for the appellant submits that, though the accused admits the transaction between the complainant and the accused with regard to supply of the 'Sunpure cooking oil' and issuance of a cheque but, the learned First Appellate Court has committed a grave error in allowing the appeal and setting aside the impugned judgment of conviction and sentence passed by the trial Court. He submits that, the trial Court on considering the evidence placed on record by the complainant, evaluated the evidence and rightly concluded that, accused is guilty of committing offence punishable under Section 138 of the NI Act. He would submit that, there is no proper appreciation of evidence by the first Appellate Court. The

¶42

7 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶43

learned Appellate Court has acquitted the accused by setting aside the judgment of the trial Court. In support of his submission, the learned counsel for the appellant/complainant relied upon the evidence placed on record by the complainant as well as respondent and the oral evidence and admissions DW.1 in the cross examination.

¶44

Having heard the arguments of the learned counsel for the appellant and on perusal of the records placed on record, the point that would arise from my consideration is:

¶45

" Whether the First Appellate Court has committed any legal and factual error in allowing the appeal and setting aside the judgment passed in the C.C.No.1068/2018 passed by the trial Court?"

¶46

In this case as stated supra, most of the factual features are admitted. It is not in dispute that, complainant is a 'cooking oil manufacturing company' and

¶47

8 -

¶48

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶49

accused was the distributor of 'Sunpure cooking oil' and running her business under the name and style of 'Renuka Enterprises and Trading', Brigade Road, Bhadravathi. It is the case of the complainant that, the complainant has supplied the 'Sunpure cooking oil' to the accused on credit basis. Towards the payment of the materials purchased by the accused, she issued a cheque bearing No.691663 dated 27.12.2017 on Rs.268461/- drawn on SBI, Old Town area Branch Bhadravathi. On receipt of the said cheque, complainant presented the same for encashment but, the said cheque came to be dishonoured for want of 'Sufficient Funds' on 27.12.2017 itself. Therefore, the complainant issued the statutory notice on 17.01.2018 and called upon the accused to make the payment of the cheque amount, but the accused did not respond for the same. Therefore, the complainant constrained to file the complaint under Section 200 of Cr.P.C and subsequently, it was registered in C.C.No.1068/2018 by the learned Magistrate.

¶50

9 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶51

Let me discuss the law with regard to dishonor

¶52

of cheques and how the complainant has to prove his case.

¶53

Law regarding offence under Section 138 of N.I Act is well settled in the decision of Hon'ble Apex Court in

¶54

APS Forex Services (P) Ltd. v. Shakti International Fashion Linkers reported in (2020) 12 SCC 724 which reads as under:

¶55

"7.2....Therefore, once the accused has admitted the issuance of cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the NI Act. However, such a presumption is rebuttable in nature and the accused is required to lead the evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid."

¶56

The Hon'ble Apex Court in Rajesh Jain v. Ajay

¶57

Singh reported in (2023) 10 SCC 148 states regarding

¶58

10 -

¶59

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶60

necessary ingredients of Section 138 of the NI Act, which reads as under:

¶61

"24. Essentially, in all trials concerning dishonour of cheque, the courts are called upon to consider is whether the ingredients of the offence enumerated in Section 138 of the Act have been met and if so, whether the accused was able to rebut the statutory presumption contemplated by Section 139 of the Act.

¶62

25. In Gimpex (P) Ltd. v. Manoj Goel [Gimpex (P) Ltd. v. Manoj Goel, (2022) 11 SCC 705 : (2023) 3 SCC (Civ) 314] , this Court has unpacked the ingredients forming the basis of the offence under Section 138 of the NI Act in the following structure : (SCC pp. 726-27, para 26)

¶63

(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account;

¶64

(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;

¶65

(iii) Presentation of the cheque to the bank arranged to be paid from that account;

¶66

(iv) The return of the cheque by the drawee bank as unpaid either because the amount of money standing to the credit of that account is

¶67

11 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶68

insufficient to honour the cheque or that it exceeds the amount;

¶69

(v) A notice by the payee or the holder in due course making a demand for the payment of the amount to the drawer of the cheque within 30 days of the receipt of information from the bank in regard to the return of the cheque; and

¶70

(vi) The drawer of the cheque failing to make payment of the amount of money to the payee or the holder in due course within 15 days of the receipt of the notice."

¶71

PW1, being the Manager of the complainant company by name Manjunath Umasutha, has reiterated the averments made in the complaint in his evidence on oath. He is specific about the issuance of the cheque by the accused in discharge of the amount so due from the accused towards supply of the cooking oil. Though he has been cross-examined at length, but nothing worth is elicited from the mouth of this witness. It is admitted by PW1, as rightly observed by the Trial Magistrate that, PW1 has given evidence based upon the document. He is one of the Directors of the Company. He is specific that, there

¶72

12 -

¶73

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶74

was transaction in between the complainant and the accused till October 2017. It is a suggestion by the counsel for the accused that, the last transaction between the accused and the complainant was till October 2017.

¶75

That means, the supply of cooking oil to the accused by the complainant company is categorically admitted by the accused. It is admitted that, if the customer of the complainant company after reaching the target, the complainant company provides incentives to the same. It is stated that, the incentives is being given to the customers and it is included in the payment. Taking this evidence of PW1, the learned Appellate Court has observed that, as there is no legally enforceable debt, therefore, the accused is to be acquitted.

¶76

Insofar as issuance of the cheque, signature on the same, it is admitted by DW1. It is suggested to PW1 that, two cheques were given to the complainant, but they are given by way of security. To show that, the said cheques were issued towards security, except the bald

¶77

13 -

¶78

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶79

suggestions, no evidence is placed on record by the accused. This PW1 is specific that, out of total amount of Rs.4,98,000/-, Rs.2,30,000/- was paid by the accused, and for remaining amount, she has issued a cheque as per Ex.P1. There is no further denial of this fact by the accused in the further cross-examination. Further, it is suggested that, in the year 2017 itself, the entire account of the accused is closed, but this suggestion is denied by PW.1.

¶80

DW.1, being the accused, has stated that, the

¶81

complainant company had obtained two blank cheques signed by her and it was being misused. According to her, the contents of Ex.P1 are filled by the complainant. No notice is served upon the accused. According to her, complainant has to pay Rs.1,15,000/- towards incentives and when she enquired about payment of the same, the complainant stopped transaction with the accused. For the first time, without suggesting any question to that effect to PW.1, she has stated in her examination in chief.

¶82

14 -

¶83

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶84

She has been cross-examined. It is stated in the crossexamination that, as per the Account Statement, the total outstanding amount to the complainant was Rs.4,98,000/-. She admits that, she has paid Rs.2,30,000/- to the complainant. To that effect, Ex.P.8 is confronted to her and it is marked in evidence. She admits that, she has received incentives from the complainant company and denied other suggestions.

¶85

Insofar as documentary evidence is concerned,

¶86

the complainant relies upon Ex.P.1 - the cheque signed by the accused and her signature, which is admitted by DW.1 herself in her chief examination. So also, Ex.P.2 is an endorsement issued by the Bank stating that, the cheque was dishonoured for want of sufficient funds. So immediately after receipt of the said cheque dated 27.12.2017, the said cheque was presented, but it was dishonoured for want of sufficient funds. Thereafter, the statutory notice came to be issued by the complainant as per Ex.P.3. Ex.P.4 is the return cover, which shows the

¶87

15 - NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶88

notice was returned as it was 'not claimed'. Thereafter, the complainant filed a complaint under Section 200 of Cr.P.C. As the notice is not claimed, the Trial Court held that, it is a deemed service. Ex.P.5 is the letter of authorization to PW.1 to give evidence in this case. Ex.P6 is an admitted document by the accused that, it is the statement of account to show that in all, the accused has to pay Rs.4,98,499/- towards supply of 'cooking oil' to the accused. Out of this Rs.4,98,499/-, accused has paid Rs.2,30,000/- as per the evidence of PW.1 and as per the admission of DW.1 in the cross-examination. To show that accused is the Proprietor of the said Renuka Enterprises, photocopy of the VAT Registration Certificate is produced, which is not disputed. Ex.P.8 is produced to show the account extract.

¶89

The learned Trial Court, considering the entire evidence placed on record by the complainant and evaluating the evidence of DW.1, has clearly observed that, as the accused has admitted her signature on the

¶90

16 -

¶91

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶92

said cheque, so also admitted the transaction, therefore, it raised the presumption under section 118 of the NI Act, as well as under Section 139 of the NI Act which speaks to that effect. The learned Trial Court relied upon the decision in K.L.Agarwal V/s. M/s Paramount

¶93

Solutions, Bangalore reported in 2017 (2) AKR 12 . It is held that, when the accused admits about issuance of the cheques and signature, if there is no evidence placed on record to rebut the presumption raised against the accused, then the case of the complainant has to be accepted. Even the decision in T. Vansanthakumar V/s. Vijayakumari reported in 2015 AIR-SCW 3040 is relied upon by the Trial Court. Wherein it is held that, " when the signature is not disputed on the said cheque, then the presumption under Section 139 of the NI Act is attracted ".

¶94

By appreciating the evidence in proper perspective, the learned Trial Court has rightly convicted the accused, but the Appellate Court, without appreciating

¶95

17 -

¶96

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶97

the evidence and without applying its mind in a proper perspective, has set aside the judgment so passed in C.C.No.1068/2018. When the complainant is able to establish that, there was legally enforceable debt, i.e., towards sale consideration of selling the 'cooking oil' by the complainant to the accused and when in discharge of the said amount, the cheque is issued, there is a compliance of provisions of Section 138 of the NI Act by the complainant. If that is so, it is proved that, accused has committed the offence under Section 138 of the NI

¶98

Act, rightly the Trial Court has convicted the accused. The Appellate Court has committed an error in setting aside the judgment passed by the Trial Court. The same is required to be set aside. When accused admits about purchase of the cooking oil worth Rs.4,98,499/- and payment of Rs.2,30,000/- and for balance she has issued a cheque and when this transaction is proved, I find that,

¶99

the First Appellate Court has committed illegality in allowing the appeal. Consequentially, the judgment of the Appellate Court dated 29.04.2022 passed in

¶100

18 -

¶101

NC: 2025:KHC:10482 CRL.A No. 1183 of 2022

¶102

Crl.A.No.2224/2018 by the LXI Additional City Civil and Sessions Judge, Bengaluru City(CCH-62) is liable to be set aside, and the judgment of conviction and order of sentence dated 27.10.2018 passed in C.C.No.1068/2018 by the XXIV Additional Small Causes Judge and XXII ACMM (SCCH-26), Bengaluru, is to be restored.

¶103

Resultantly, I pass the following:

¶104

ORDER

¶105

(i) The Criminal Appeal is allowed . (ii) The judgment of acquittal dated 29.04.2022 passed in Crl.A.No.2224/2018 by the LXI Additional City Civil and Sessions Judge, Bengaluru City (CCH-62) is hereby set aside.

¶106

(iii) Consequentially, the judgment of conviction and order of sentence so passed in C.C.No.1068/2018 dated 27.10.2018 by the XXIV Additional Small

¶107