The High Court · 2025

Counsel for the Respondent No.2 : Sri Jithender Rao Veeramalla, Additional Public Prosecutor The Court delivered the following: Judgment IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA CRIMINAL APPEAL No.1154 OF 2019 DATE:31-12-2025 Between: M/s. The Citizen Co-operative Society Limited And Appellant Jakka Venkata Narasimha Rao, S/o. Veera Raghavulu, aged about 51 years, Occ. Business, R/o.D.No.2-54, Tharakatur (v), Guduru (M), Machilipatnam, A.P. and another Respondents JUDGMENT: This Criminal Appeal is filed by the appellant-complainant aggrieved by the judgment, dated 24.06.2019, rendered in C.C.No.137 of 20'18 by the learned ll Special Magistrate, Ranga Reddy District at Hasthinapuram, whereby, the respondent No.1- accused was found not guilty of the offence under Section 138 of the Negotiable lnstruments Act, '1 BB1 (for short, 'N.1. Act') and accordingly, he was acquitted 2 E'I'D.J Crl.A.No.ll5,1 of 2019

2. Heard Sri G. Geeta Nadh, learned counsel for the appellant and Sri Jithender Rao Veeramalla. learned Additional Public Prosecutor for respondent No.2-State

3. The appellant herein filed a complaint against respondent No.1, alleging offence under Section 138 of the N.l. Act and the same was taken cognizance of by the learned Il Special lVlagistrate, Ranga Reddy District at Hasthinapuram, C.C.No.137 of 2018. According to the appellant-complainant, it is a Society registered under the A.P. l\,4utually Aided Co-operative Societies Act and that the main object of the Society is to develop its members by doing business, advancing loans and collecting deposits. While so, the management of the complainanlSociety got converted the Society into [/lulti State Co-operative Society and the accused is the member of the Society. The accused along with Dr. J. Padmaja approached the complainanlSociety and made an application for grant of Secured Overdraft (SOD) for business development and the Society sanctioned loan of Rs.30,00,000/- on 14.11.2015 repayable with interest @ 16.50% p* annum. The accused and Dr. J. Padmaja along with two co- \ obligants have executed SOD loan documents such as pro-note, agreement etc., and also mortgaged property and deposited title I deeds in favour of the complainant-Society towards the said loan J E TD.] Crl.A.No.ll54 of20l9 However, the accused and Smt. J. Padmaja are irregular in repaying the installments as agreed and thus, an amount of Rs.40,81,501/- is due as on 31.01 2018. The Complainant- Society has also sanctioned term loan to the accused and Dr. J Padmaja for an amount of Rs.20,00,0001 on 14.11.2015 repayable with interest at the rate of 16% per annum. However, the accused and Smt. J. Padmaja are irregular in repaying the installments as agreed and thus, an amount of Rs.21,94,276l- is due as on 31 01.2018 in term loan account. However, after several requests and reminders made by the complainant-Society and on issuing notice by the Head Office, the accused issued clrcque bearing No 006908, dated 02.02.2018, for an amount of Rs.62,75,7771- drawn on Corporation Bank, Manikonda Branch, towards discharge of the loan amount payable by the accused in SOD account and also in the term loan account. When the complainanlSociety presented the said Cheque for realization through complainant's banker namely A.P. Vardhaman (Mahila) Co-operatrve Bank Limited (APV), Dilshuknagar Branch, on

20.02.2018, the same was returned dishonoured to the complainant on 21 02.2018 with cheque return memo for the .+ ETi)..t Crl.A.No.ll54 of20l9 reason "Funds lnsufficient". Therefore, the complainant-Society got issued legal notice to the accused through registered post with acknowledgement due calling upon the accused to pay the amount of Rs.62,75,7771- covered under the above dishonoured cheque within 15 days of the receipt of the notice and the same was served on the accused on 31.03 2018. After receiving the notice, the accused paid Rs.2,00,0001 on 06 04 2018 towards part payment in SOD account, however, he failed to pay the balance amount of Rs.60,75,777l-. Therefore, the present complaint is filed against the accused for the offence punishable under Section 138 of the N.l. Act

4. The accused appeared before the learned Magistrate and denied the offence and pleaded not guilty

5. During trial, on behalf of the complainant, PW.1 was examined and Exs.P1 to P20 were marked. On behalf of the accused, no evidence, either oral or documentary evidence, was adduced.

6. On consideration of the evidence available on record, the learned Magistrate observing that Sri K. Prabhakar Babji, legal offieer of the complainant-Society, could not prove that he is \o- -a"a' ETD.J Crl.A. \0 I Ii.l of20l9 authorized to file the present complaint on behalf of the ) complainant-Society and that the accused succeeded in discharging his burden to rebut the presumption under Section 139 of the N.l Act with regard to existence of legally enforceable debt under Ex.P'14-Cheque, held that the accused is not guilty of the offence punishable under Section 138 of the N.l. Act and accordingly, acquitted him vlde impugned judgment, dated

24.06.2019. Aggrieved by the same, the present appeal is preferred by the complainant

7. Learned counsel for the appellant had contended that though nothing was elicited from the cross-examination of PW.1 disputing the cheque, the date of presentation, reasons for return of the cheque and sending legal notice within limitation, the trial Court has dismissed the present C.C. on the ground of lack of authorization. He further submitted that respondent No.'1- accused tras admitted his signatures on the Ex,P6-Promissory Note and Ex.P14-cheque and the same is sufficient to impose criminal liability on respondent No.1-accused. He further submitted that the trial Court erred in holding that respondent No,'1-accused is not a member of the complainant-Society. He further submitted that Sri K. Prabhakar Babji ls working as Legal -*- -z"z 6 ETI).J Crl.A.No.l I54 of20l9 I Officer in the complainant-Society and he is authorized to file the complaint on behalf of the complainant-Society. He further submitted that the trial Court erred in holding that there is no legally enforceable debt. He, therefore, prayed to set aside the impugned judgment, dated 24.06.2019. and allow the Criminal Appeal B. Learned Additional Public Prosecutor has submitted that the trial Court on appreciation of the entire evidence on record came to a conclusion that respondent No. 1-accused is not guilty of the offence under Section 138 of the N.l. Act. He, therefore. prayed to dismiss the Criminal Appeal.

9. Perused the record

10. The evidence adduced before the trial Court would show that PW.1 has admitted in his cross-examination that as per Ex.P4-loan application, there are two borrowers; that he cannot say who filled the loan application form; and that Ex.P4 does not disclose when the loan was granted, when the loan was disbursed and also the mode of disbursement. He further admitted that the columns with regard to the loan account number, sanctioned amount, authority and date are kept blank 1 tsl D.J Crl.A.No.l154 of20l9 He has also admitted that the documents under Exs.P4 to P6 does not disclose the mode of payment of loan to the accused to I an extent of Rs.30,00,000/-. He has also admitted that no document rs filed to show the mode of transferring of the amount of Rs.20.00,000/- to the accused towards term loan. Thus, PW 1 could not prove his case beyond reasonable doubt that the complainant-Society has given SOD of Rs.30,00,0001 and the accused has evaded the said payment by issuing the subject cheque. Further, no material is placed on record to show that Rs 30,00,000/- has been disbursed to the account of the accused Further. PW t has admitted that no document is filed to show that the accused is a member of the complainantSociety. ln the absence of any such document, it cannot be said that the accused is a member of the complainant-Society and therefore, the compla inant-Society has no right to advance any kind of loan to the accused. According to PW.1, Exs.P7 and P12 are the composite agreements, dated 14.1 1.2015, and in his cross- examination, he has categorically admitted that there are no signatures of the witnesses on the said agreements. According to PW 1 , Exs P8 and Pl 3 are the statements of accounts of the accused and in the cross-examination of PW '1 , it is elicited that I ETD,J ('rl.A.r.\o. I I 5.1 of 20l 9 they are downloaded from the computer and they are not certified by the person who downloaded the same from the computer. Thus, the requirements under Section 658 of the Evidence Act are not fulfilled and the said documents cannot be considered in evidence. Therefore, the appellant-complainant could not prove his case, while on the other hand due to the admissions of PW.1 in cross-examination, it can be safely held that the respondent No. 1 could prove his innocence by preponderance of probability. Hence, the trial Court has rightly acquitted the respondent No.1- accused of the offence under Section 138 of N.l. Act. Hence. the appeal lacks merit.

11. Accordingly, the Criminal Appeal is dismissed upholding the judgment, daled 24.06.2019, rendered in C.C.No..1 37 of 2O1B by the learned ll Special Magistrate, Ranga Reddy District at H asth in apu ra m Miscellaneous PetitionS pendino, if any, qhall stand olosed. SdI. V. KAVITHA PUTY REGISTRAR //TRUE COPY// S CTION OFFICER To,

1. The ll Special Magistrate at Hastinapuramu, Ranga Reddy District 2. Two CCs to the Public Prosecutor, High Court for the State of Telangana at Hyderabad (OUT)

3. One CC to M/S. GATTE GEETA NADH, Advocate [OPUC] 4. Two CD Copies ADI(SA \t- HIGH COURT DATED:31 11212025 ( * O -... InE S tl 5 [18 2{]26 ) * JUDGMENT I CRLA.No.1154 of 2019 DISMISSING THE CRLA .T o{'A V)#