Dismissed¶51

Housing Development Finance v. Mr Swamy Madangopal

Karnataka HC5 Feb 2025CRL.A/824/2015

Case brief

AI extract

What is this about?

Karnataka HC, CRL.A No.824 of 2015, decided 05-02-2025 (Shivashankar Amaranannavar J): S.138 NI Act acquittal upheld — debt time-barred (promissory note 15.12.2003 vs cheque 20.08.2010), S.139 presumption rebutted (no loan agreement/account statement/consideration receipt produced), appeal by complainant dismissed.

What did the court decide?

The point for consideration is answered in the negative: the learned Magistrate did not err in acquitting the respondent–accused of the offence punishable under Section 138 of the N.I. Act. ¶42

Housing Development Finance Vs Mr Swamy Madangopal — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

Dismissed

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Issue for consideration

Whether the learned Magistrate has erred in acquitting the respondent–accused of the offence punishable under Section 138 of the N.I. Act?

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Court's answer

The point for consideration is answered in the negative: the learned Magistrate did not err in acquitting the respondent–accused of the offence punishable under Section 138 of the N.I. Act.

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Ratio / Principle

As the on-demand Promissory Note (Ex.P9) is dated 15.12.2003 and the cheque (Ex.P3) is dated 20.08.2010, the alleged debt was barred by limitation on the date of the cheque; PW1 admitted in cross-examination that no acknowledgement of debt was obtained from the respondent–accused.

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Key takeaways

The respondent–accused rebutted the presumption under Section 139 of the N.I. Act: the appellant–complainant produced neither the loan agreement dated 15.12.2003 nor any loan application, statement of loan account or consideration receipt to establish the alleged borrowing and disbursement.ratio¶49
Considering all these aspects, the learned Magistrate has rightly acquitted the respondent–accused of the offence under Section 138 of the N.I. Act.ratio¶49

Detailed headnote1 paragraphs

Criminal appeal under S.378(4) Cr.P.C. by the complainant (Housing Development Finance Corporation Ltd., through GPA holder Manoj J. Shah) against the judgment dated 10.04.2015 in C.C.No.35282/2011 (Additional Chief Metropolitan Magistrate, Bengaluru) acquitting the respondent–accused Swamy Madangopal under S.138 NI Act. Facts: loan of Rs.2,80,000/- (a/c No.361169829) per agreement/promissory note dt.15.12.2003; cheque No.024751 dt.20.08.2010 for Rs.2,80,000/- (Canara Bank) dishonoured “Dormant”; demand notice dt.01.09.2010 (R.P.A.D.) unanswered. Held: the on-demand promissory note being dt.15.12.2003, the debt was barred by limitation on the cheque date (20.08.2010); PW1 admitted no acknowledgement of debt was obtained; complainant produced no loan agreement, loan application, statement of loan account or consideration receipt; presumption under S.139 NI Act held rebutted; Magistrate's acquittal held correct. Appeal dismissed. (Shivashankar Amaranannavar, J.; 05.02.2025)

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1 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 5^TH DAY OF FEBRUARY, 2025

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BEFORE

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THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR

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CRIMINAL APPEAL No. 824 OF 2015

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BETWEEN:

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HOUSING DEVELOPEMNT FINANCE CORPORATION LIMITED REPRESENTED BY ITS MANAGER RECOVERIES AND GPA HOLDER SRI. MANOJ J. SHAH AGED ABOUT 50 YEARS HDFC HOUSE, No.51 KASTURBA ROAD BANGALORE – 560 001.

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…APPELLANT

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(BY SRI H VINAY JADAV, ADVOCATE FOR SRI B S MAHENDRA, ADVOCATE)

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AND:

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

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MR. SWAMY MADANGOPAL AGED ABOUT 52 YEARS No.24, 2^ND BLOCK BEML. QUARTERS, BEML TOWNSHIP NEW THIPPASANDRA POST BANGALORE – 560 075.

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AND ALSO AT: SENIOR MECHANIC EMPLOYEE No.17834 & 717 BEML LIMITED, BANGALORE COMPLEX P.B.No.7501

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NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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NEW THIPPASANDRA POST BANGALORE – 560 075.

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…RESPONDENT

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(BY SRI S SURESH KUMR, ADVOCATE)

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THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 10.04.2015 PASSED BY THE XV A.C.M.M., BANGALORE IN C.C.No.35282/2011 - ACQUITTING THE RESPONDENT/ACCUSED 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:

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CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR

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ORAL JUDGMENT

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This appeal is filed by the appellant – complainant challenging the judgment of acquittal dated 10.04.2015 passed in C.C.No.35282/2011 by the XXV Additional Chief Metropolitan Magistrate, Bengaluru, whereunder, the respondent – accused has been acquitted of the offence under Section 138 of the N.I.Act .

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Case of the appellant – complainant in brief is as under;

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The respondent – accused had availed loan facility of

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Rs.2,80,000/- under the loan account No.361169829 from the appellant – complainant and agreed to repay the same as

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3 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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per the terms and conditions of the loan agreement dated 15.12.2003. The respondent – accused, in order to repay the said loan amount had issued the cheque bearing No.024751 dated 20.08.2010 for a sum of Rs.2,80,000/- drawn on Canara Bank, H.A.L-III Stage, Bengaluru in favour of the appellant – complainant. The appellant – complainant had presented the said cheque for encashment. The said cheque has been returned dishonoured with an endorsement “Dormant”. The appellant – complainant got issued the demand notice dated 01.09.2010 by R.P.A.D. Inspite of service of the said notice, the respondent – accused had not

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paid the cheque amount. Therefore, the appellant – complainant had filed a private complaint against the respondent – accused for the offence under Section 138 of the N.I.Act. Learned Magistrate took cognizance and registered C.C.No.35282/2011 against the respondent – accused for the offence under Section 138 of the N.I.Act. The plea of the respondent – accused had been recorded. The appellant – complainant in order to establish its case has examined the General Power of Attorney holder as PW1 and

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4 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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got marked Exs.P1 to P9. The statement of the appellant – accused had been recorded under Section 313 of Cr.P.C. The appellant – accused has not led any defence evidence. The learned Magistrate after hearing the arguments on both sides has formulated the points for consideration and passed the judgment of acquittal. The said judgment of acquittal has been challenged by the appellant – complainant in this appeal.

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

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Learned counsel for the appellant – complainant would contend that the respondent – accused had admitted his signature on Ex.P3 – cheque. As the signature on the cheque has been admitted, a presumption has to be drawn under Section 139 of the N.I.Act, that it had been issued for discharging the debt. The said presumption is not rebutted. Ex.P9 – Promissory Note itself would show that the respondent – accused had availed the loan from the appellant

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complainant. Without considering all these aspects, the

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5 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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learned Magistrate has erred in acquitting the respondent – accused of the offence under Section 138 of the N.I.Act.

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Learned counsel for the respondent – accused would contend that availing of loan by the respondent – accused from the appellant – complainant is not admitted. There is a material alteration in the cheque – Ex.P3 and it has been admitted by PW1 in his cross examination. As per Ex.P9 - an on demand Promissory Note, the loan was availed on 15.12.2003 and the cheque – Ex.P3 issued towards making payment of the debt is dated 20.08.2010. The said alleged debt is time barred. The appellant – complainant has not produced any statement of the loan account to show what was the balance amount. PW1, in his cross examination has admitted that the respondent – accused had not executed any acknowledgement of debt. He further submits that the signed cheque issued by the respondent – accused towards the processing charge of Rs.3,361/- at the time of applying loan has been misused by materially altering the figures of the amount. Considering all these aspects, the learned

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6 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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Magistrate has rightly acquitted the respondent – accused. With this, he prayed for dismissal of the appeal.

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

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

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

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It is the specific case of the appellant – complainant that the respondent – accused had availed loan of Rs.2,80,000/- under the loan account No.361169829, and executed the loan agreement dated 15.12.2003. The appellant – complainant has not produced any loan agreement dated 15.12.2003. Ex.P9 is the on demand Promissory Note said to have been executed for Rs.2,80,000/-. It is stated that Ex.P3 – cheque has been

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NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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issued for making payment of the said loan borrowed by the respondent – accused. The respondent – accused has disputed borrowing any loan from the appellant – complainant. As the said on demand Promissory Note is dated 15.12.2003, the said debt as on the date of cheque ie., 20.08.2010 becomes barred by limitation. PW1 in his cross examination has admitted that they have not obtained any acknowledgement of debt from the respondent – accused.

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The respondent – accused contended that the cheque – Ex.P1 has been issued for Rs.3,361/- towards processing charge when he applied for loan with the appellant – accused. The said loan has not been sanctioned and the said cheque for Rs.3,361/- has been misused by materially altering the figures of the amount. The appellant – complainant has not produced any statement of loan account to show what was the balance amount. Even the appellant – complainant has not produced the consideration receipt for having disbursed the said loan amount to the respondent - accused. Considering all these aspects, the respondent –

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8 - NC: 2025:KHC:5256 CRL.A No. 824 of 2015

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accused has rebutted the presumption under Section 139 of the N.I.Act. In order to establish the alleged borrowing, the appellant – complainant has not placed loan application, statement of loan account, consideration receipt etc., Considering all these aspects, the learned Magistrate has rightly acquitted the respondent – accused of the offence under Section 138 of the N.I.Act. In the result, the following;

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ORDER

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The appeal is dismissed .

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Sd/(SHIVASHANKAR AMARANNAVAR) JUDGE

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List No.: 1 Sl No.: 63

Housing Development Finance v. Mr Swamy Madangopal

Case brief

What is this about?

What did the court decide?

Housing Development Finance v. Mr Swamy Madangopal

Case brief

What is this about?

What did the court decide?

What the court decided

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Procedural history

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