Sri Shankar Shetty Vs Smt Srilatha Shetty — Cheque Dishonour | Karnataka HC (2025)

Sri Shankar Shetty Vs Smt Srilatha Shetty — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

Issue for consideration

Whether the trial Court has erred in acquitting the respondent-accused for the offence punishable under Section 138 of the N.I. Act.

Court's answer

The point whether the trial Court erred in acquitting the respondent-accused for the offence punishable under S.138 N.I. Act is answered in the negative — the trial Court did not err.

Ratio / Principle

The specific date of the alleged borrowing was not stated in the legal notice (Ex.P3), the complaint, or the evidence of P.W.1, nor in Ex.P6 — the memorandum of understanding.

Key takeaways

P.W.1 admitted in his cross-examination (para 27) that he handed over cash on 14.11.2007, a date subsequent to the date of cheque Ex.P1; this very admission created suspicion in the complainant's case.ratio¶7
Ex.P6 — memorandum of understanding dated 26.09.2008 — came into existence during the pendency of the criminal case, and the respondent-accused denied its execution.ratio¶8
To prove Ex.P6 the complainant examined none of the witnesses who affixed their signatures on it; P.W.1 admitted in cross-examination (Para 32) that signatory Venkataraya Prabhu is his friend, yet did not examine him to establish the contents and execution of Ex.P6.

Detailed headnote1 paragraphs

CRIMINAL APPEAL UNDER S.378(4) Cr.P.C. BY COMPLAINANT AGAINST ACQUITTAL — S.138 NEGOTIABLE INSTRUMENTS ACT — High Court of Karnataka (Shivashankar Amaranannavar, J.), CRL.A No. 420 of 2015, decided 17-01-2025: Appeal by the complainant against the judgment of acquittal dated 27.02.2015 of the JMFC, 5th Court, Mangalore, in C.C.No.431/2008, acquitting the respondent-accused of the offence punishable under S.138 N.I. Act. Alleged hand loan of Rs.5,00,000/- borrowed in March 2007; cheque Ex.P1 (No.676564, dated 14.07.2007, Syndicate Bank, Hampanakatta Branch, Mangalore) dishonoured for want of funds; notice dated 03.11.2007 served; private complaint filed. Acquittal upheld because: (i) the specific date of the alleged borrowing was nowhere stated — not in legal notice Ex.P3, the complaint, P.W.1's evidence, or Ex.P6; (ii) P.W.1 admitted in cross-examination that he handed over cash on 14.11.2007, after the cheque date, creating suspicion; (iii) Ex.P6 memorandum of understanding dated 26.09.2008, executed during the pendency of the case, was denied by the accused and unproved — no signatory witness, including Venkataraya Prabhu (admitted by P.W.1 to be his friend), was examined; (iv) withholding Venkatraya Prabhu's evidence itself created suspicion; (v) documents under the accused's S.313(5) statement showed the complainant to be an accused in three S.138 N.I. Act cases, and his evading answers showed he was hiding the truth; (vi) the presumption under S.139 N.I. Act stood rebutted, shifting the onus to the complainant, who failed to discharge it as to the borrowing and issuance of Ex.P1 towards a legally enforceable debt. Holding: the trial Court did not err; acquittal upheld; appeal dismissed.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17^TH DAY OF JANUARY, 2025

BEFORE

THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR

CRIMINAL APPEAL No. 420 OF 2015

BETWEEN:

SRI SHANKAR SHETTY S/O LATE SRINIVASA SHETTY AGED ABOUT 50 YEARS R/AT “LAKSHMI SHETTY COMPOUND” ASHOK NAGAR MANGALORE – 575 006(DK).

…APPELLANT

Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA

(BY SRI M SUDHAKAR PAI, ADVOCATE)

AND:

SMT. SRILATHA SHETTY W/O SRI MADHUSOODAN SHETTY AGED ABOUT 39 YEARS STAFF NURSE MANIPAL COLLEGE OF DENTAL SURGERY LIGHT HOUSE HILL ROAD HAMPANAKATTA MANGALORE – 575 001 (DK).

…RESPONDENT

(BY SRI RANJAN KUMAR K, ADVOCATE)

THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE ORDER DATED: 27.2.2015, PASSED BY THE JMFC, 5 COURT, MANGALORE, DK, IN C.C.No.431/2008 - ACQUITTING THE RESPONDENT/ACCUSED

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FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT AND ETC.,

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

CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR

ORAL JUDGMENT

This appeal is filed challenging the judgment of acquittal dated 27.02.2015 passed in C.C. 431/2008 by J.M.F.C., 5^th Court, Mangalore, wherein the respondent –accused has been acquitted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as “N.I. Act” for brevity).

Respondent –accused to meet immediate

needs has barrowed loan of Rs.5,00,000/- from the complainant during the month of March-2007 and agreed to repay the same within 06 months. The respondent –accused in order repay the said hand loan has issued cheque bearing No.676564 dated

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14.07.2007 for Rs.5,00,000/- drawn on Syndicate Bank, Hamapanakatta Branch, Manglore infavour of

the complainant. The complainant presented the said cheque and same came to be dishonoured for want of funds. The complainant got issued notice dated 03.11.2007 and it has been served on the respondent –accused. The respondent –accused did not repay the cheque amount therefore, the appellant –complainant has filed private complaint against the respondent – accused.

The learned Magistrate has taken

cognizance against the respondent –accused for the offence punishable under Section 138 of N.I. Act and registered C.C.No.431/2008. The plea of the respondent has been recorded. The complainant in order to prove case has examined himself as P.W.1 and got marked documents as Ex.P1 to P6. The

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statement of the respondent –accused came to be recorded under Section 313 of Cr.P.C. The respondent

–accused has given her statement in writing at the time of recording statement under Section 313(5) of Cr.P.C and produced documents. The respondent – accused did not lead any defence evidence. Learned Magistrate after hearing arguments on both side has formulated points for consideration and passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged by the complainant in this appeal.

Heard learned counsel for the appellant – complainant and learned counsel for the respondent – accused.

– 5. Learned counsel for the appellant complainant would contend that the respondent - accused has barrowed hand loan of Rs.5,00,000/-

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during the month of March -2007 and in order to repay the said hand loan issued the cheque –Ex.P1

dated 14.09.2007 and on presentation, it came to be dishonoured. He further submits that during the pendency of criminal case, the respondent –accused has executed memorandum of understanding dated 26.09.2008 whereunder she has admitted barrowing of Rs.5,00,000/- from the complainant during the month of March -2007 and issuance of cheque –Ex.P1. He submits that the respondent –accused under the said memorandum of understanding has given a sum of Rs.1,00,000/- and agreed to pay remaining balance amount within 30 days. He further submits that when the signature on the cheque –Ex.P1 is admitted, the presumption under Section 139 of N.I. Act has to be drawn. The said presumption drawn under Section 139 of the N.I. Act has not been rebutted by

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appropriate evidence. On these grounds he prays to allow the appeal and convict the respondent –accused

for offence punishable under Section 138 of N.I. Act.

Learned counsel for the respondent –

accused would contend that the respondent –accused has denied financial capacity of the appellant – complainant. The appellant –complainant was accused in three criminal cases filed for offence punishable under Section 138 of N.I. Act, itself indicate that he has no financial capacity. The appellant –complainant has not produced any documents to show his financial capacity. The appellant –complainant has not given definite answers to the questions regarding his involvement in criminal cases for offence punishable under Section 138 of N.I. Act as accused, itself indicate that he suppressing the truth. Ex.P6 has come during pendency of the criminal case and

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respondent –accused has denied execution of Ex.P6 by her. The complainant has not examined witnesses who have signed in Ex.P6. The respondent –accused has taken up defence that two signed cheques have been handed over to one Venkataraya Prabhu when she availed loan from him as security and they have been misused by him through this appellant and another person by name Dayanand Shetty. He submits that the case filed by Dayanand Shetty in C.C.No.272/2008 the respondent –accused has been

acquitted for offence punishable under Section 138 of N.I. Act. The said Venkataraya Prabhu who is also one of witnesses to Ex.P6 –memorandum of understanding has not been examined in order to prove execution of memorandum of understanding and also to rebut the contention of the respondent – accused that cheque –P.W.1 has been handed over

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him as security. Considering all these aspects, the learned Magistrate has rightly acquitted respondent –

accused. With these, he prays for dismissal of the appeal.

Having heard learned counsels this Court has perused impugned judgment and trial Courts records. Considering grounds urged, the following point arises for consideration.

“Whether the trial Court has erred in acquitting the respondent –accused for offence punishable under Section 138 of N.I Act?”

My answer to the above point is in the negative for the following reasons.

As per averments of legal notice –Ex.P3 and complaint, the alleged barrowing by the respondent –

accused from the appellant –complaint is during March -2007 and specific date of the said barrowing is not

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stated in legal notice, complaint and evidence of P.W.1. Even the alleged date of barrowing has not

been stated in Ex.P6 –Memorandum of understanding. P.W.1 in his cross examination at para 27 has stated

that he has handed over cash on 14.11.2007. The said date is subsequent to the date of cheque –Ex.P1. The very said admission given by P.W.1 in his cross examination creates suspicion in the case of the complainant.

Ex.P6 –memorandum of understanding dated 26.09.2008 has come into existence during pendency of the criminal case. The respondent – accused has denied execution of Ex.P6. The appellant –complainant in order to prove Ex.P6 has not examined any of the witnesses who have affixed their signature on Ex.P6. One of the signatory to the said memorandum of understanding -Ex.P6 is M.

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Venkataraya Prabhu. In Para 32 of cross examination, P.W.1 has admitted that the said Venkataraya Prabhu

is his friend. P.W.1 has not examined the said Venkataraya Prabhu to establish contents and

execution of EX.P6.

It is the defence of the respondent –accused

that she has handed over two signed cheques to Venkataraya Prabhu when she availed loan from him as security. In order to disprove the said contention

the complainant has not examined Venkataraya Prabhu when he has stated that he is his friend. Withholding the said evidence of Venkatraya Prabhu itself creates suspicious in the complainant’s case. The documents produced along with statement filed by the respondent –accused under Section 313(5) of Cr.P.C will indicate that the appellant –complainant has been involved in three criminal cases as accused for offence

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punishable under Section 138 of N.I Act. The appellant –complainant i.e. P.W.1 in his cross examination when it is asked regarding criminal cases he gave ignorance to the said criminal cases. When the complainant is an accused in the said criminal cases what made him to give evading answers to the said questions. The evading answers itself indicate that the complainant is hiding the truth. The evidence on record indicate that the respondent –accused has rebutted the presumption under Section 139 of the N.I Act. When the said presumption is rebutted the onus is on the complainant to establish his case. The complainant –appellant has not discharged his onus regarding proof of barrowing of hand loan and issuance of Ex.P1 –Cheque towards legally enforceable debt.

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Considering all these aspect, learned

Magistrate has rightly acquitted the respondent – accused for offence punishable under Section 138 of N.I Act by well reasoned judgment. There are no grounds made out for setting aside the impugned

judgment of acquittal. In the result, the appeal is

dismissed.

Sd/(SHIVASHANKAR AMARANNAVAR) JUDGE

DSP List No.: 1 Sl No.: 43