Dismissed

Sri H R Sathish v. Sri J Ravindralal

Karnataka HC3 Mar 2025CRL.A/19/2019

Case brief

AI extract

What is this about?

Appeal against acquittal for cheque dishonour of Rs.3,75,000. Accused showed bank records proving he had over Rs.6 lakh in his account when the alleged loan was taken, plus a consistent reply notice; the High Court held the presumption under Section 139 was rebutted by preponderance of probabilities and dismissed the appeal, upholding the acquittal.

What did the court decide?

None; acquittal of the respondent affirmed by dismissing the appeal.

Sri H R Sathish Vs Sri J Ravindralal — Cheque Dishonour | Karnataka HC (2025)

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1 - NC: 2025:KHC:9028 CRL.A No. 19 of 2019

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 3^RD DAY OF MARCH, 2025

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BEFORE

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THE HON'BLE MR JUSTICE H.P.SANDESH

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CRIMINAL APPEAL NO.19 OF 2019

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BETWEEN:

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SRI. H.R. SATHISH, S/O RAJEGOWDA, AGED ABOUT 32 YEARS, NO.2380-1, C.H.95-1, NEW KANTHARAJ URS ROAD, K.G.KOPPAL, MYSURU-570001.

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…APPELLANT

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(BY SRI. AKARSH KUMAR GOWDA, ADVOCATE FOR SRI. NARENDRA D.V. GOWDA, ADVOCATE)

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AND:

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Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA

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SRI. J. RAVINDRALAL, AGED ABOUT 49 YEARS, INSTITUTE OF EDUCATION HIGH SCHOOL, DRAWING TEACHER AT NEAR B.ED COLLEGE, NEAR KAMAKSHI HOSPITAL, KUVEMPUNAGAR, MYSURU-570024.

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…RESPONDENT

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(BY SRI. SREEDHAR N.G., ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 15.10.2018 PASSED BY THE V ADDITIONAL I CIVIL JUDGE AND JMFC, MYSURU IN C.C.NO.961/2015 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT.

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

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NC: 2025:KHC:9028 CRL.A No. 19 of 2019

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CORAM: HON'BLE MR. JUSTICE H.P.SANDESH

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ORAL JUDGMENT

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Heard the learned counsel for the appellant and the

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learned counsel for the respondent.

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This appeal is filed challenging the acquittal order dated 15.10.2018 passed by the Trial Court in C.C.No.961/2015 for the offence punishable under Section 138 of the Negotiable Instruments Act (‘NI Act’ for short).

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The factual matrix of the case of the complainant before the Trial Court is that the accused is known to the complainant since ten years and he is also a family friend and on many occasions the accused had borrowed money from the complainant and repaid the same. It is the case of the complainant that in the month of April 2013, the accused approached the complainant and sought Rs.3,75,000/- for his legal necessities and assured the complainant that he would repay the amount within five months. It is the case of the complainant that the amount was lent in the month of May 2013 and the accused had promised to repay the same in the month of November 2013. When the complainant demanded

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to return the amount, he sought some time and in the month

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of December 2013, again demand was made and he started giving false reasons and that on lot of persuasion, on 10.12.2013, the accused issued a cheque dated 11.12.2013. When the said cheque was presented, the same was returned with an endorsement “insufficient funds” and hence legal notice was issued and the same was served and reply was given and hence complaint was filed and cognizance was taken. The accused was secured and he did not plead guilty and claimed trial. The complainant examined himself as P.W.1 and got marked the documents at Exs.P.1 to 8. On the other hand, the accused examined himself as D.W.1 and got marked the documents at Exs.D.1 to 7. The Trial Court having considered the material on record and having accepted the repayment of Rs.1,40,000/- and also considering the documents of exhibit ‘D’ series, particularly Ex.D.7 for having availed loan of Rs.6,40,000/- and also the document of Ex.D.1 reply, which was given immediately after receipt of the notice, comes to the conclusion that the accused was not in need of money since he was having money in his account in terms of Ex.D.7 and doubted the very availment of loan of

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Rs.3,75,000/- and dismissed the complaint and acquitted the accused.

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Being aggrieved by the acquittal order, the

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present appeal is filed contending that admittedly there is an admission on the part of the respondent that signature and the cheque involved in the transaction belongs to the respondent. It is also the contention that the findings recorded by the Trial Court that the respondent had availed the loan of Rs.6,40,000/- on 15.03.2013 and there was no need for the respondent to avail the loan from the complainant during the month of May 2013, is erroneous. The learned counsel contend that it is the contention of the accused that he had issued two cheques while availing the loan of Rs.1 lakh and he repaid the said amount with interest and at the time of clearing the alleged loan, the appellant had only returned one cheque and another cheque and stamp paper was misused and the said defence has not been proved and in the absence of any probable evidence, the Trial Court committed an error in acquitting the respondent. The Trial Court ought to have held that the payment of Rs.1,40,000/by the respondent to the appellant was in respect of the loan

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availed by the respondent on 12.01.2012 and the said payment was not in respect of the loan availed by the respondent in May 2013. The very approach of the Trial Court is erroneous, since once the cheque Ex.P.1 was admitted, ought not to have acquitted the respondent. The learned counsel submits that the very pleading in the complaint is clear that the accused used to receive money and repay the same and payment of Rs.1,40,000/- is not disputed and merely making payment of Rs.1,40,000/- on 21.3.2013, the Trial Court erroneously comes to the conclusion that there was no need of money to the accused at

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the time of advancing of the amount in the month of May 2013 and the said approach is erroneous. The learned counsel brought to the notice of this Court the discussion made by the Trial Court in paragraph Nos.15 and 17 and the said discussion is erroneous as against the material on record.

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The learned counsel for the appellant in support of his arguments relied upon the judgment of the Apex Court in the case of RANGAPPA v. SRI MOHAN reported in (2010)

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11 SCC 441, wherein it is held that once the cheque is admitted, there exists a legally enforceable debt or liability.

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The learned counsel brought to the notice of this Court paragraph No.30 of the said judgment, wherein discussion was made with regard to the availment of hand loan and prima facie existence of a legally enforceable debt or liability since the complainant has maintained that his money was used for the construction expenses. The learned counsel brought to the notice of this Court that in the complaint also it is specifically mentioned that the amount was advanced for legal necessities.

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The learned counsel also relied upon the judgment

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of the Apex Court in the case of K.N. BEENA v. MUNIYAPPAN AND ANOTHER reported in (2001) 8 SCC 458 and brought to the notice of this Court paragraph No.7, wherein discussion was made that respondent No.1 not having led any evidence could not be said to have discharged the burden cast on him.

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The learned counsel also relied upon the judgment of the Apex Court in the case of BASALINGAPPA v. MUDIBASAPPA reported in (2019) 5 SCC 418, wherein in paragraph No.19, the Apex Court relied upon the judgment in the case of Kumar Exports v. Sharma Carpets reported in

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(2009) 2 SCC 513, wherein discussion was made with regard to as soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the NI Act help him shift the burden on the accused. The learned counsel referring this judgment would contend that material is placed before the Court and also answer is elicited from the mouth of D.W.1 that he did not give any complaint when the cheque and stamp paper was not returned and also not produced any document for misuse of the same and he did not give any complaint against the complainant. The learned counsel contend that P.W.1 in his evidence has categorically deposed with regard to lending of money though he had not taken any separate documents insisting the accused to furnish the document and the payment is in respect of the amount availed on 12.01.2012 and he used to take loan amount frequently.

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Per contra, the learned counsel for the respondent would contend that the material on record is very clear that an amount of Rs.1,40,000/- was repaid with regard to the earlier payment is concerned. The document of Ex.D.7 is

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placed before the Court to show that he was having an amount of Rs.6,40,000/- in his account and the same was available in the account throughout from 2013 to 2017 and there was no need for the respondent to borrow money from the appellant. If really he was in need of money, he would have utilized the money which was in his account and not borrowed the amount and there was no any occasion for him to avail an amount of Rs.3,75,000/-, since he was having money in his account. The learned counsel contend that when the legal notice was issued, immediately reply was given in terms of Ex.D.1 and clear defence was also set out that earlier he had taken Rs.1 lakh and at that time, the appellant had collected two cheques and a blank stamp paper and the same has been misused and only one cheque was returned and other one was not returned and the same is misused. The respondent specifically set out his defence and in the evidence also reiterated the same and hence the Trial Court rightly accepted the evidence of the respondent that he had shown plausible evidence before the Court and hence it does not require interference of this Court.

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Having heard the learned counsel for the appellant

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and the learned counsel for the respondent and considering the material placed on record and also the principles laid down in the judgments referred supra by the learned counsel for the appellant, the points that arise for the consideration of this Court are:

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(i) Whether the Trial Court has committed an error in acquitting the accused for the offence punishable under Section 138 of the NI Act and committed an error in appreciating the evidence?

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(ii) What order?

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Point No.(i):

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Having heard the learned counsel for the respective parties and also considering the averments made in the complaint, it is specifically stated by the complainant that both the complainant and the accused are having acquaintance with each other and both of them are family friends. It is also pleaded that earlier also the accused had availed the loan on many occasions and repaid the same. It is also pleaded that in the month of April 2013, the accused

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had sought an amount of Rs.3,75,000/- to meet his legal necessities and the same was paid in May 2013. The appellant also reiterated with regard to the issuance of notice, service of notice and claiming of trial. He got marked the documents in ‘P’ series and also he was subjected to crossexamination. In the cross-examination, he says that he cannot say in which year he came to know about the accused and not able to give information specifically, but he had given legal notice and admitted that for what purpose the amount was paid was not mentioned in the notice. The learned counsel submits that the same was mentioned in the complaint. He admits that in the notice he had not specifically pleaded on what date the loan was advanced, but he mentioned the month. He admits that at the time of advancing the loan, he did not demand for production of document, but he claims that he had informed his uncle about the payment of money. The defence of the respondent is that he had availed an amount of Rs.1 lakh and the same was repaid through bank and the fact that he made the payment of Rs.1,40,000/- is not in dispute. The appellant categorically

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admits that the accused used to take money and repay the same regularly.

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11. Having considered this evidence as well as

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evidence of D.W.1, he also set out the factual aspects in his affidavit as narrated in the reply notice in terms of Ex.D.1. He admits that there was no agreement in view of purchasing of stamp paper, but he admits that he has not given any complaint when the cheque was not returned and also he is not having any document to show that the stamp paper was misused. In the case on hand, there is an acquittal and when acquittal order has been challenged, the Court can look into both oral and documentary evidence placed on record.

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P.W.1 got marked the documents in exhibit ‘P’

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series i.e., Ex.P.1 to 8. Having considered Ex.P.1, there is no dispute with regard to the issuance of cheque for an amount of Rs.3,75,000/-. The endorsement, notice, reply notice, acknowledgment, postal receipts and income tax returns are marked as Exs.P.3 to 8. On the other hand, the accused got marked the document of Ex.D.1 reply notice, which is marked

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by the complainant and also produced the document of

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service of reply notice as Ex.D.3 and Ex.D.2 postal receipt and Ex.D.5 that he was not in station at the time of availing loan and almost in the month of May 2013 he was outside and particularly relies upon Ex.P.7 for having availed loan from the bank to the tune of Rs.6,40,000/-. It is important to note that the complainant also not disputed the fact that he had received an amount of Rs.1,40,000/-, since the respondent also claims that he had availed loan of Rs.1 lakh and the same was repaid with interest to the tune of Rs.1,40,000/-. The only dispute is with regard to receipt of Rs.3,75,000/- in the month of May 2013 and demand was made in the month of April 2013. Having perused Ex.D.7, it is very clear that an amount of Rs.6,40,000/- was transferred to the account of the respondent on 15.03.2013 and Ex.D.7 discloses that in the month of May 2013 also, he was having money to the tune of Rs.6,28,960/-.

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The case of the complainant is that he advanced an amount of Rs.3,75,000/- to the accused in the month of May 2013 and the Trial Court considered the document of Ex.D.7 as well as the reply given by the respondent in terms of Ex.D.1 and specific defence was taken that he repaid the

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amount of Rs.1,40,000/- with regard to the transaction of 12.01.2012 and subsequently he did not avail any amount from the complainant and the documents are produced before the Trial Court as Exs.D.7, 5 and 6 to substantiate the contention of the respondent/accused and these documents are probable defence as contended by the respondent along with oral and documentary evidence. For having paid the amount in the month of May 2013, no document is obtained and specific defence of the accused is that he had availed an amount of Rs.1 lakh. The complainant had collected two cheques and a blank stamp paper and blank stamp paper was not used and only one cheque was returned when the amount of Rs.1,40,000/- was repaid, but did not return the other cheque. No doubt, the accused admits that he did not give any complaint when the cheque was not returned, but the Court has to take note of probable defence of preponderance of probabilities that he was having money at the time of alleged transaction as narrated and documentary evidence substantiate the same and the same is in consonance with the reply given by the respondent and the evidence is also in terms of the reply.

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The learned counsel for the appellant relied upon

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the judgment of the Apex Court in the case of Rangappa (supra), wherein it is held that presumption mandated by Section 139 of NI Act includes presumption that there exists a legally enforceable debt or liability and at the same time, the Court also held that such presumption is rebuttable in nature. In the case on hand, rebutted the same by producing the documentary evidence of Exs.D.5 to 7 and the same is in consonance with Ex.D.1 reply. The learned counsel also relied upon the judgment of the Apex Court in the case of K.N.Beena (supra), wherein it is held with regard to discharging of liability and the burden is on the accused and there is no dispute with regard to the said principle and so also in the judgment in the case of Basalingappa (supra), it is discussed with regard to source of money for payment and it is held that the prosecution must establish its case beyond reasonable doubt and the accused to prove a defence must only meet standard of preponderance of probabilities. In the case on hand, preponderance of probabilities is found having considered Ex.D.1 and Exs.D.5 to 7. When such being the case, the judgments relied upon by the learned counsel for

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the appellant will not come to the aid of the appellant to substantiate the contention of the complainant.

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Having considered both oral and documentary evidence placed on record and also the reasoning given by the Trial Court, the Trial Court rightly comes to the conclusion that probable defence has been raised by the accused by producing the document of Ex.D.7, which reflects that he was having money in his account throughout in the month of March, April, May, June and even in the month subsequent also and there was no need for the accused to approach the complainant in the month of April. According to the complainant, demand was made in the month of April 2013 and payment was made in the month of May 2013 and when the accused was having money in his account, though it was availed through bank, there was no need for the accused to approach the complainant in the month of April and collecting the money in the month of May. Except the document of Ex.P.1 cheque, no other documents are produced with regard to the transaction is concerned. Hence, I do not find any error committed by the Trial Court in appreciating the evidence. Hence, I answer the point in the negative.

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