High Court · 2025

Judgment

The appella,rt/complainant preferred this appeal aggrieved by the acquittal recorded by the Sessions Judge" Nizamabad, in Cri.A.No.96 of 2011, dated 16.05.2012 under Section l3B ol the Negotiable Instruments Act, 1881.

2. The case of the complainant/PW. I is that he is well acquainted u.ith the accused/DW. 1, who borrowed Rs 7,00,000 on 2l'l'7'2002, agreeing to repav the arnolrnt with an interest of L8"k per annum q.ithin one year. Upon demand for repayment of the loarL, accused issued Ex.P1-cheque bearing no. 466563 for Rs 10,15,000' drar,'n on Corporation Barrk, Nizamabad, dated 24-l-2OO5, in favor of complainant to discharge his liability. On 27.1.2005, complainant presented the cheq.ue for encashment through Sree Rama Grameena BaIk, but it r,''as dishonoured with the endorsement "insufficient funds" in accused's account, as indicated in the cheque return memo by Corporation Bank, Nizamabad. Complainant iss'ued a l:gal notice (Ex.P3) to the accused oo 23.2.2005, demanding repayment of the cheque amount. {ccused replied to the notice on 12.3.2O05, denying 2 the liability (Ex. P5). PW2, Manager of Corporarion Bank. testified that Ex.Pl cheque was issued from his bank and was retumed due to insufhcient funds, as evidenced by Ex.p2. p\,V3, Manager of

Deccan Grameena Bank, stated that complainant is an employee of his bank and confirmed that Ex.p1 was returned by Corporation Bank due to insuffrcient funds. He also acknowledged the difference in the ink and pen used for the signature and for filling in the other particulars of Ex.P1.

3. According to accused, he neither received any amount from complainant nor issued any cheque to him to discharge any debt or legally enforceable liabilit5r. Accused claimed that cornplainant, a close relative of Girish Kumar, borrowed Rs 7,00,000 from him on 2O.9.2OOO and executed a demand promissory note (Ex.D 1) on the same date in the presence of \Mitnesses DW.2 (A. Rajaram ) and K. Prakash. Despite repeated requests, complainant failed to return the loan amount. Complainant, along with Girish Kumar, executed an acknowledgment of debt cum undertaking on 21.7.2OO2 (Ex.D.4l, agreeing to repay the said amount with interest. When they failed to do so, accused issued them a legal notice dated 12.3.2005 (Ex.D2), but the amount and interest remained unpaid. Girish Kumar issued ,, 3 a cheqlre date.l 1 5.7.2OA5 lor Rs 7,O0,0O0 (Ex'D€') Wherr accr'rsed presented the cheque for encashment on 10' 1'2006, it wari returned due to insufhcient funds in Girish Kumar's a'ccount Accused subsequently hieC a complaint under Negotiable Instrurnents Act against .Girish Kumar, rvhich is pending before the mobile court' Ex.Di0istheCC)ofthecomplaint.Accusedfurtherallegedthathe hadmonetarytransactionswithcomplainant,sfatlrer-in.law, Raghunatha Rao, who took tu'o blank signed cheques from accused andfailedtoreturnthem.Accusedclairnedthatcomplainanttook one of these blank signed cheques from his fattrer-in-law, frlled in the details, and f,rled a false case against hirn'

4. Learned Speciat Magistrate having considerred the evidence placed on record bv both the complainant and accused' convicted the accused ald the hndings of the learned Magistrate are; i) The accuse,l did not initially exarnine DW'3-R'aghunatha Rao or any other u,itness to substantiate the monetary transaction between them. Ex.D9, a receipt shor,r'ing Raghunatha Rao received Rs' 1,10,000 from the accused, remained unproved as it was Lrnstamped, and Raghunatha Rao was not examined to conhrm the receipt's authenticity or signature. Additionally, complainant denied 4 any monetary dealings between the accused ald Raghunatha Rao The accused later hled a petition to summon Raghunatha Rao as a court ,*,itness to prove the genuineness of Ex.D9. Upon examination as DW3, Raghunatha Rao denied lending any loan to the accused or taking tr.r,o blank cheques, including Ex.Pl, as security. He also denied that trx.D9 bore his handwriting or signature. Handu.riting samples of DW3 were taken by defence counsel for comparison rvith Ex.D9, but they did not match. The accused took no steps to send the receipt for forensic examination. The learned Magistrate also observed that the accrlsed did not issue any notice to Raghunatha Rao for the cheque's return or address any commlrnication to the bank authorities to stop the cheque from being honoured. ii) The learned Magistrate observed that if the accused had indeed lost his cheque, he should have notifred the bank authorities, u-hich he failed to do. Moreover, no suggestion was made to PW'2, the Corporation Bank Manager, regarding the alleged misplacement of the cheque. The learned Magistrate concluded that the conflicting versions presented by F" accused indicate that his story \l'as fabricated to rebut the sta.tutory presumption in favor of the complainant. 5 iii) The learned Magistrate observed that the accused, in response to complainant's It:gal notice under Ex.P3, issued .0x'P5 reply notice and Ex.D2 notice to complainant on 12.3.2005, alleging the loan' However, the iearned Magistrate remarked that the accused's silence until receiving Er,P3 \rras questionable. Furthermore, complainant denied his signatures on Ex.Dl and Ex.D4, and the accused did not take steps to send these disputed signatures for forensic examination. The accused also lailed to examine Girish Kumar' Learned Magistrate further observed that, given the ongoing legal battle between complainant arrd the accused, the claim tllat Girish Kumar issued a cheque to the accused on behalf of complainant under Ex.D6 does not arise and is doubtful. Regarding DW.2's testimony, the leeLrned trial judge noted that 'u'hile DW.2 stated complainant borro'*'ed Rs. 7,00,0O0 under Ex.Dl, his evidence was unreliable as it emerged that he frequently borrowed money from the accused. Additionally, DW2's ignorance of whether: complainant lent Rs. 7,00,0OO to the accused rendered his testimonv unhelpful. irr) The learned Magistrate concluded that Ex.Dl, Ex.D4, and Ex.D6 rx.ere not connected to the present case, and the accused failed to rebut the presumption against him. It it; also observed by 6 the trial Court that it was undisputed that no docurrrent r'vas executed by complainant when lending the loan. However, the trial Court considered complainant's testimony that he had knorvn the accusecl for 15 y'ears, they were both devotees of RK Rao, and he gave the loan in good faith. In contrast, the trial Court noted the accused's statement that he had known complainant for only 5 to 6 years. The trial Judge remarked that if the accused claimed to have lent complainant a loan in the year 2OOO, it was ulclear how their acquaintance spanned only 5 to 6 years. v) It was further observed that there is no prohibition on lending a loan without obtaining a security document. Finally, the learned Magistrate concluded that in the absence of cogent and convincing evidence to rebut the presumption under Section 1 18 read r'i-ith Section 139 of the Negotiable Instruments Act, the accused's claim that complainant advartced such a large amount to hirn could not be accepted. vi) The learned Magistrate judge observed that the accused (DWl} admitted he did not know how to read or write English, rnaking it unlikely that he hlled out the cheque hirnself. Instead, he must have - - ' -'1.:lt;-i::'ii$ ' .::;i---- . -:-:; ;r ' 7 had someone else fill in the contents ' lt u'as aiso rioted that complainant never claimed the accused hlled ou'- the cheque and signed it in his Presence vii) The learned Magistrate acknorvledged that PWs' 1 and 3 admitted to a difference in the ink used for the signature and the contents of the cheque. However, nothing \('as elicited from complainant about the circumstances under whicn Ex'Pl was filled in different inks. Moreover, it 1t'as not the accused's case that complainalt himself filled out the cheque. It is further noted that the accused faited to prove that Ex.P1 u,as issued blank to complainant's fatfrer-in-law, Raghunatha Rao, and subsequently misused by complainant to file the complaint. viii) The learned Magistrate ackno$.ledged this inconsistency in complainant,s cross-examination as to whether he lent Rs.7 lakhs in lrrmpsum or on two occasions and noted that cornplainant clarilied that 21.7.2002 u.as the date on rvhich he paid the balance amormt of Rs. 7,OO,O0O as a loan to the accused. It is obsen'ed that no further suggestions were made to complainalt denying this clarification and found no inconsistency regarding the total amourlt borrowed by the 8 accused. The omission of details in the complaint and legal notice was deerned not material enough to constitute a contradiction' ix) The learned Magistrate considered that during the cross- examination of accused on 7.l2.2OlO and two other occasions, the accused sought time to compromise the matter. The trial Court remarked that il the accused had not issued Ex.Pl-cheque to"r''ards a legally enforceable debt, he rvould not have sought a compromise with complainant. x) Finally, it w-as concluded that the accused failed to discharge his burden, even based on the preponderalce of probabilities.

5. Learned Counsel appearing for the appellant/complainant would submit that the learned appellate Court Judge had .reversed the well reasoned Judgrnent of the trial Court convicting the accused. Contradictory defence was taken by the appellant' Once the signatures on the cheque were admitted, the burden shifts on to the accused, which was not discharged as rightly held by the Trial Court' The contradiction in the defence was regarding the issuance of cheque. In Ex.P5-reply notice, the accused sta'ted that the cheque was missing. whereas, a totally different version was given during the course of trial by stating that the cheque in question xras given to the father-in-Iav of the appellant/complainant_

6. Learned Counsel relied on the Judgments rendered by the Honourable Supreme Court in; i) Sumett Vij a. Paramount Tech Fab Industries (2022) 15 SCC 689 ii) Kalamani Tex and others u. p.Balasl.tbramonion (2021) S SCC 283 iti) Rohltbhai ,.fiaanlal patel a. Sto:te o! Gujarat and. others (2019) 7a SCC 106 ia) Bir Slngh a. Mukesh Kurarar (2019) 4 SCC 7gT u) R.Vtjagant o. Babg and. others l2Dt2) I SCC 260 ui) Rangappaa. Mohan (2O1O) 11 SCC 441 uii) ICDS Ltd a. Beena Shobeer and others (2OOZ) 6 SCC 426 uiti) Dabnia Cement Ltd. a. Ga.laxg Traders poAtl) 6 S;CC 46i3

7. In Rawi Sharma v. State (Government of NCT of Delhif and another', the Hon'ble Supreme Court held that ,*,hite deali,g with an appeal against acquittal, the appellate court has to considcr whether r 12022; E Supreme Court Cases 536 10 the trial Court's vier,r, can be termed as a possible one, particularly when evidence on record has been analysed. The reason is that an order of acquittai adds up to the presumption of innocence in favour of the accused. Thus, the appellate court has to be relatively slow in reversing the order of the tria-l court rendering acquittal.

8. lrt Ghureg Lal u. State oJ Uttar Pradesh'z the Hon'ble Supreme Court after referring to severa,l Judgments regarding the settled principles of lau, and the powers of appellate Court in reversing the order of acquittal, held at para 70, as follows: "70. In the light of the aboue, the High Couft ond other oppellate Courts slauld follout the uell settled principles crystallized bg rutmber of Judgments if it is going to ouenttle or otherutise disturb the trinl aurt's aquittd:

1. The appellate cnurt maA onLg ouerrule or otltenuise disfurb the triol court's aa4uittal if it has "uery substontial and ampelling reasons" for doing so. A number of instonces aise in which the appellate ourt would haue "uery substantial and- compelling reosons" to discard tLE trial ourt's decision. nVery substantial and compelling reasons" exist tthen: i) The tial aurt's conclusion uith regard to tle fads is palpablg ii) Tle triat court's decision tuas based on an erroneous uiew of iii) The fial court's judgment is likelg to result in "groue miscntriage urcng: lanu; of justie"; iu) The entire approach of the triol court in dealing uith tle euidene uas pa.tentlg illegal; u) Tle trial court's judgment u)as manifestlg unjust and unrensonoble; 212008; l0 Sup,"-" Court Cases 450 71, ui) The trial court hos ignored the euirience <tr msread the naleria! e,uilence. oa has ignored materiai doan.ment: tike dying declarations,/ rtzporT of tlrc ba istic Dx.pert, etc. ansideration o the findings of the tial aui. uii)This list is intended to be illustratiue, not exhaustlue. 2. The appellate court m;zst aluags gtue proper ueitTht and 3. If tttto reasonable uieuts can be reached, one thot iecLd.s to acquiltal, tlte other to anuiction _the High Courts/ apprtllate cou4s must rule in fauour o,f the accused-" 9 . Having gone through the record, the defen<:e of th e accused initiaily, as mentioned in notice is that cheques rverr: missing. Accused aiso denied signature on the cheque ir, the 1egal notice Ex.PS. However, during the course of trial, defence taken rvas tota-lly contrary to the earlier version. During trial accused,s defence was that the cheque was given to Raghunath Rao (D.W.3), u.ho is the father-in-law of the complainalt and the sarne was misused by the complainant' The accused fiIed a petition to summon Ragh,nath Rao lor the purpose of proving his hand writing in the documents hled under Ex.D9 to show that the amount was received from D,W.3. D.W.3 in his examination in chief after being suLmmoned by the accused stated that he did not sign on Ex.D9 a,d denied that roa, w.as given by him to the accused, for which reitson, cheque in question was taken as securit5r cheque. Though the ,Cefence taken by the accused in the trial was negatived by the evidence of D.W.3, who i2 was surnmoned at the instance of the accuseci, hor'vever, D'W'3 was not declared hostile nor cross-examined by the accused.

10. Admittedly, when it was the case of the accused that the signatures on the cheques urere not that of his as claimed in the reply notice and that Ex.D9 was executed by D.W'3, steps should have been taken by the accused to send the documents for the purpose of hand writing examination. The version given by D'W'3 falsifies the defence of the accused.

11. l,earned Sessions Judge committed an error in not considering the said facts ar1d recording acquittal on the basis of the evidence of P.W. 1 that he did not file the income tax returns and that P'W' 1 gave two versions regarding handing over the money'. P'W' I stated that the amount was given at once in complaint and legal notice and during cross-examination he stated that he had given' in two installments. The said discrepancy is inconsequential and will not demolish the case of complainant. The entire facts of case have to be taken into consideration by the Court and cannot selectively ignore crucial facts. The findings of the learned Sessions Judge are not based on totality of the circumstances. No reasons are given by the Sessions Judge to disregard the evidence of DW'3 or the ^\\ 13 {)ortradictory dcfence taken. The defence of theft d,:nying the signatures was initial defence. Later accused admitted the signatures on the cheque but stated that it was given to D!V.3 w,hi,:h u.as not proved.

12. In vieu' of the above discussion, the appe,al deserves to be ajlou'ed. The or,ler of the learned Sessions Jucige acquitting the accused is herel--'y set aside. The accused is convfuted un<ler Section 138 of the Negotiable Instruments Act ald directed to pay hne of Rs.8.00 lakhs which shall be given to the complainant AS compensation. The said amount shall be deposited before the trial Courr u,ithin a period of eight weeks from the date of receipt of this order. Failure to deposit the amount within the time stipulated, the :rcc used shall undergo default sentence of sir months simple rmpnsonment.

13. Accordingl], Criminal Appeal is allowed. //TRUE COPY// Sd/. K. SRINIVASA RAO JOINT REGISTRAR SECTION OFFICER To, Nizamabad

1. The Sessions Judge at Nizamabad z iilE 5p."iri'irJ;i=rl M";ffiaie ottirst class for trial of P&E ofrences' 3 6#'iC6-Sri shvam s.Asarwal, Advocate 19P,H9) ;. 6;; 6C io rritl. p i'lithya Nioeswari , Advocate (OIUC) 5 Two ccs to Public Pro;;;6;iiGh'court for th6 state of relangana at 6 Two CD CoPies Ks/gh Hyderabad (OUT) Vrr HIGH COURT DATED:2410112025 ,A S ( 3o o 7 i) ) 12 t:l 295 \* \ L) \ a.si ,1 rr $ s0 { I JUDGMENT CRLA.No.1069 ot 2012 ALLOWING THE CRL.A. ,\'P(UA iffi\al