Siddappa Vs Sanganagouda

SANGANAGOUDA S/O BASANAGOUDA PATIL AGE:44 YEARS, OCC:BUSINESS R/O BANGALORE, NO.8, 1^ST "B"CROSS 4TH MAIN, MUTHYALANAGAR, MES ROAD BANGALORE-01 … RESPONDENT

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Digitally signed by SREEDHARAN BANGALORE SUSHMA LAKSHMI Location: High Court of Karnataka

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(BY SRI R S LAGALI, ADV.)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 01.10.2018 PASSED BY THE SENIOR CIVIL JUDGE AND JMFC AT LINGASUGUR IN C.C.No.337/2016 ACQUITTING THE APPELLANT FOR THE OFFENCES PUNISHABLE U/SEC.138 OF N.I.ACT.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 27.03.2025 AT KALABURAGI BENCH AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT, BEFORE THE PRINCIPAL BENCH AT BENGALURU, THROUGH VIDEO CONFERENCING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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CORAM: HON'BLE MR. JUSTICE S RACHAIAH

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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 appellant, being aggrieved by the judgment and order of acquittal dated 01.10.2018 passed in CC No. 337/2016 on the file of Senior Civil Judge and JMFC at Lingasugur.

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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 he is a businessman and the accused was his friend. Both were known to each other. The accused requested him for a sum of Rs.9,95,000/- as he was in need of money for his business and family commitments. Accordingly, by keeping faith on the words of the accused, the complainant had delivered the amount of Rs.9,95,000/-.

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The accused had agreed to repay the said amount whenever the complainant had asked to repay the same. The complainant had requested the accused to repay the

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amount on 22.02.2016. The accused had issued a cheque by mentioning the date as 23.02.2016 and asked the complainant to present the same for encashment. When the said cheque was presented for encashment, the same has been returned with a shara as ‘funds insufficient’. The complainant issued a legal notice on 29.02.2016 regarding the dishonour of the cheque. Though, the complainant had issued the legal notice, the accused has not made the payment within the stipulated time nor replied the said notice. Hence, the complainant filed a complaint before the learned Magistrate.

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To prove the case of the complainant, the complainant examined himself as P.W.1 and got marked 5 documents as Exs.P1 to P5. On the other hand, the accused himself examined as D.W.1 and got marked only one document i.e. Ex.D1 - Bank Statement. The Trial Court recorded the acquittal on the basis that the complainant had not received any security at the time of advancing the amount, which creates a doubt regarding the transaction and hence, the case has been ended in acquittal.

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Heard Sri.Shivanand V.Pattanashetti, learned counsel for the appellant and Sri.R.S.Lagali, learned counsel for the respondent.

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It is the submission of learned counsel for the appellant that the judgment and order of acquittal passed by the Trial Court is contrary to the law and also facts of the case. Hence, the same is liable to be set aside.

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It is further submitted that the manner in which the Trial Court dealt with the case is erroneous for the reason that merely because no documents have been received by the complainant at the time of lending the amount, cannot be a ground to disbelieve the transaction. The Trial Court ignored the recitals of the complaint that both the complainant and the accused were friends for several years.

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It is further submitted that the manner in which the Trial Court opined that the transaction had not taken place between the complainant and the accused is absolutely without any basis and also without any reasons. Making

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such submissions, learned counsel for the appellant prays to allow the appeal.

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Per contra, learned counsel for the respondent vehemently justified the judgment of acquittal passed by the Trial court and he further submitted that though the alleged transaction had taken place in the year 2010 for the huge amount, the cheque had been issued subsequently by the accused. At the time of lending the amount, the complainant did not receive the security, which is unbelievable. No prudent man can believe such a statement. Therefore, the Trial court rightly held that the transaction had not taken place and there is no infirmity in the findings of the Trial Court. Making such submissions, learned counsel for the respondent prays to dismiss the appeal.

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Having heard the learned counsel for the respective parties and also perused the findings of the Trial Court in recording the acquittal, it appears from the record that the complainant had lent Rs.9,95,000/- to the accused. The accused had borrowed the said amount for his legal

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necessity. When the complainant demanded to repay the said amount, the accused is said to have issued a cheque for the said amount. When it was presented for encashment, the same came to be dishonoured, with a shara as ‘funds insufficient’. The complainant had complied the statutory requirements to file the complaint. The Trial Court opined that the complainant had not received any security at the time of lending the huge amount, therefore, the said transaction appears to be doubtful. As such, the case has been ended in acquittal.

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At this stage, it is necessary to refer the judgment of the Hon'ble Supreme Court in the case of RAJESH JAIN vs. AJAY SINGH¹ , paragraph Nos.55 and 56 read as under:

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“55. At the stage when the courts concluded that the signature had been admitted, the court ought to have inquired into either of the two questions (depending on the method in which the accused has chosen to rebut the presumption) : Has the accused led any defence evidence to prove and conclusively establish that there existed no debt/liability at the time of issuance of cheque? In the

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1 (2023) 10 SCC 148

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absence of rebuttal evidence being led the inquiry would entail : Has the accused proved the non-existence of debt/liability by a preponderance of probabilities by referring to the “particular circumstances of the case”?

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56 . The perversity in the approach of the trial court is noticeable from the way it proceeded to frame a question at trial. According to the trial court, the question to be decided was “whether a legally valid and enforceable debt existed qua the complainant and the cheque in question (Ext. CW I/A) was issued in discharge of said liability/debt”. When the initial framing of the question itself being erroneous, one cannot expect the outcome to be right. The onus instead of being fixed on the accused has been fixed on the complainant. Lack of proper understanding of the nature of the presumption in Section 139 and its effect has resulted in an erroneous order being passed.”

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On careful reading of the above said judgment, it makes it clear that, initially, once the execution of the cheque is admitted, the presumption has to be raised in favour of the complainant that he had received the said cheque for the purpose of discharging the legally enforceable debt or

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liability. The accused has to rebut the said presumption by producing cogent evidence.

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In the present case, the accused examined himself as D.W.1 took a contention that in the month of April 2015, the cheque leaves were missing from his office, which were placed on the table. He had intimated the bank authority for stop payment.

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It is further contended that the accused had a friend, namely, Shanthabhushan. The said Shanthabhushan was doing paddy business. He used to visit his office and he had stolen the cheques from his office. The complainant colluding with Shantabhushan and created a false story and presented the cheque for encashment, which is illegal and the same has to be set aside.

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The accused was cross-examined by the counsel for the complainant. When a specific question was put to him that, he made a requisition to the bank authority regarding stop payment and whether he had produced such document before the Court. However, the accused did not produce any such requisition allegedly submitted

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to the bank authority for stop payment and also he has not filed any complaint before the police regarding loss of cheques. If he had a knowledge regarding theft of cheques by his friend, a complaint would have been lodged against him soon after receiving the notice regarding cheque bounce. However, the Trial Court considering the evidence of accused as a defence and acquitted the accused, which is erroneous and therefore, the same is liable to be set aside.

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

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ORDER

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i) The appeal is allowed.

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ii) The judgment and order of acquittal dated 01.10.2018 passed in CC No. 337/2016 by the Senior Civil Judge and JMFC at Lingasugur, is set aside.

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iii) The accused is convicted for the offence punishable under Section 138 of N.I Act and he is sentenced to pay fine of Rs.12,00,000/-. In default of payment of fine, he shall undergo simple imprisonment for a period of 1 ½ year.

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iv) On deposit being made, the Trial Court is directed to release a sum of Rs.11,90,000/- in favour of the complainant as compensation in terms of Section 357A of the Code of Criminal Procedure, on proper identification and the remaining balance amount of Rs.10,000/- shall be credited to the State Exchequer.

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v) The Registry is directed to send the records along with this order to the Trial court for taking necessary steps.

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Sd/(S RACHAIAH) JUDGE

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UN List No.: 19 Sl No.: 1

Siddappa v. Sanganagouda

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Siddappa v. Sanganagouda

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