SRI M VENKATESH v. SRI D N KENCHAPPA

The trial Court took cognizance of the offence and summoned the accused. The accused pleaded not guilty and claimed to be tried. The Complainant examined himself as PW-1 and got marked Exhibits P1 to 10 in support of his contention. Accused has denied all incriminating materials available on record under Section 313 of Cr.P.C - 4 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 and deposed as DW-1. He got marked Exhibits D1 to D4 in support of his defence. The trial Court after taking into consideration all these materials on record, came to the conclusion that the complainant has not proved his financial capacity to lend huge amount of Rs.14.00 lakhs. He has also not proved lending of the amount, issuance of cheque towards repayment of the loan and therefore, acquitted the accused.

5. Being aggrieved by the impugned judgment, the complainant is before this Court.

6. Heard Sri. V. Prabhakar, learned counsel for the appellant and Sri M.Y. Lokesha, learned counsel for the respondent/accused. Perused the materials including the Trial Court records.

7. Learned counsel for the appellant contended that the complainant and the accused were working as Conductor and Driver in BMTC and were close friends. The accused had borrowed an amount of Rs.14.00 lakhs from the complainant on 17.04.2017 for the purpose of purchasing an immovable - 5 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 property. At the time of availing loan, he had executed an on demand promissory note with receipt agreeing to repay the same within two years with interest at the rate of 18% per annum. Accordingly, he paid the interest periodically and issued the cheque on 14.11.2019 for Rs.14.00 lakhs. On presentation of the cheque, it was dishonoured. Inspite of service of notice, the cheque amount was not repaid. Under such circumstances, the accused has committed the offence punishable under Section 138 of NI Act.

8. Learned counsel submits that issuance of the cheque as per Ex.P-1 is not disputed by the accused, rather he admits the cheque Ex.P-1 belongs to his bank account and it bears his signature. Under such circumstances, the presumption under Section 139 of NI Act arises and the burden shifts on the accused to rebut the presumption. Even though the accused examined himself as DW-1 and got marked Exs.D1 to 4, the accused is not successful in rebutting the presumption. Learned counsel submitted that the accused in his affidavit in lieu of examination-in-chief stated that he was having chit business with the complainant - 6 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 and in that regard he had issued the blank cheque and signed on the blank stamp papers which were misused by the complainant. But, during the cross-examination, he pleaded his ignorance about the complainant running the chit business. On the other hand, he contends that he had availed loan from Vinayaka Enterprises. Nothing prevented the accused from issuing the reply notice immediately after receipt of the legal notice. In view of all these glaring inconsistencies and the conduct of the accused, the complainant is successful in proving the guilt of the accused beyond all reasonable doubt. The trial Court proceeded to acquit the accused solely on the ground that the complainant had not proved his capacity to lend the amount to the accused. The capacity of the complainant to lend such amount was never disputed by the accused. Moreover, Ex.P10 is the copy of the registered sale deed under which, the accused admittedly purchased the immovable property for the total consideration of Rs.45.00 lakhs. This document probabalises the contention of the complainant regarding availing of the loan amount for purchase of the immovable - 7 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 property. Therefore, he prays for setting aside the impugned judgment of the acquittal passed by the trial Court and to convict the accused in the interest of justice.

9. Per contra, learned counsel for the respondent opposing the appeal submitted that it is the specific contention of the complainant that he was working as a Conductor in BMTC while the accused was working as Driver. According to the complainant, he had lent Rs.14.00 lakhs on

17.04.2017. There is absolutely no document to evidence that the complainant was having such a huge amount of Rs.14.00 lakhs or that he had lent the same to the accused on 17.04.2017. Learned counsel submits that on perusal of Ex.P9-the DP note relied on by the complainant, it discloses that there is no signature of the accused on demand promissory note but, his signature is found at the end of the page after typing consideration receipt. The signature of the witness is also found at the end of the corner which probabalises the defence taken by the accused that signatures of the accused were taken at the time of availing loan from Vinayaka Enterprises which is an unregistered firm - 8 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 that was being run by the complainant and was lending the amount to various persons including the accused. Such borrowal of the amount even though denied by the complainant at the initial stage later admitted that Exs.D1 to 4 are the passbooks pertaining to Vinayaka Enterprises for having availed the loan and repaid the same. These documents and the evidence of PW-1 support the defence taken by the accused and it rebuts the legal presumption under Section 139 of NI Act. The complainant has not proved his capacity to lend such huge amount of Rs.14.00 lakhs on execution of DP note and issuance of the cheque towards legally recoverable debt. Under circumstances, the trial Court was right in acquitting the accused and there are no merits in the appeal. Accordingly, prays for dismissal of the appeal.

10. In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is: "Whether the appellant has made out any grounds to allow the appeal and to convict the - 9 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 accused for the offence punishable under Section 138 of NI Act?" My answer to the above point is in the 'Negative' for the following: REASONS

11. It is the specific contention of the complainant that he had lent Rs.14.00 lakhs on 17.04.2017 to the accused for the purpose of purchasing the site. He relies on Ex.P9-the on demand promissory note and Ex.P10-the copy of the registered sale deed entered into between the accused and his son with the one Adinarayana who sold the immovable property for a total consideration of Rs.45.00 lakhs. The sale deed is dated 07.12.2017. According to the complainant during April, 2017 the accused had entered into an agreement for sale and in that connection, he had borrowed the amount of Rs.14.00 lakhs. That the said agreement is not produced before the Court to probabalises his contention. During cross- examination of PW-1, he specifically stated that he is not the signatory to the alleged agreement to sell said to have been executed by the vendor in favour of the accused. - 10 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023

12. The accused has taken a defence admitting issuance of cheque Ex.P1 and his signature found therein. He also admits his signature on the first page of Ex.P9, while disputing the signature on the second page of Ex.P9. Once the accused admits issuance of the cheque as per Ex.P1 with his signature and contends that he had issued a blank cheque as security in favour of the complainant, in view of Section 20 of NI Act and in view of the decision of the Hon'ble Apex Court in Bir Singh vs. Mukesh Kumar1, the accused authorises the complainant to fill in the blank cheque and to present it for encashment and therefore, the presumption under Section 139 of NI Act would arise in favour of the complainant and the burden shifts on the accused to rebut the presumption.

13. The accused has taken the defence that he was borrowing loan from Vinayaka Enterprises which was also run by the complainant. He has produced Exs.D1 to D4 in support of such defence. It is pertinent to note that the complainant initially denied running of financial company 1 (2019) 2 SCR 24 - 11 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 under the name and style as Vinayaka Enterprises. However, later admitted the said fact and also admitted that Exs.D1 to D4 were issued by Vinayaka Enterprises in favour of the accused under which, he availed four different loans at different point of time and had repaid the loan. This admission on the part of the complainant goes a very long way for the accused to probabalise his defence.

14. It is pertinent to note that Ex.P9 is to be taken into consideration in light of the contention taken by the complainant and the defence raised by the accused. The e- stamp for drawing Ex.P9 was obtained by the accused and the description of the document is stated to be an agreement. However, an on demand promissory note was prepared on 17.04.2017. The accused admits his signature on the first page of Ex.P9 whereas, he disputes his signature on the second page and also contends that his signatures were taken on the blank papers. On perusal of the second page of Ex.P9, it goes to show that the on demand promissory note does not bear the signature of the accused, but thereafter there is a consideration receipt of even date to - 12 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 which at the end of the page the signature of the accused and also the signature of one Kiran Kumar as witness were taken. If this document is considered in light of defence taken by the accused that his signature was taken on the blank paper, the same is probabalised from the fact and the manner in which the document is typed and prepared.

15. It is the contention of the complainant that Ex.P10-copy of the registered sale deed was given by the accused to the complainant which probabalises borrowal of the amount by the accused. Ex.P10 is the certified copy of the sale deed executed in favour of the accused and his son Kiran Kumar who is the attesting witness to Ex.P9 and as per this document, the certified copy was obtained by the complainant from the Sub-Registrar's office and it was not the document handed over by the accused in favour of the complainant.

16. Exs.D1 to D4 are the four passbooks issued by Vinayaka Enterprises in the name of the accused. These documents were marked during the cross-examination of PW-1 as the witness admitted the same. As per these - 13 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 documents, various loans were obtained by the accused i.e. as per Ex.D1 the accused had raised a loan of Rs.1,25,000/- on 25.09.2015 and repaid the same during the year 2016-

2017. Ex.D2 is the passbook where under the accused appears to have availed loan of Rs.10,000/- and repaid it during 2017-18. Ex.D3 is the passbook under which the accused has borrowed Rs.2,50,000/- and repaid the same during 2019. Ex.D4 is also passbook issued by the Vinayaka Enterprises where under the accused had borrowed a loan of Rs.1,00,000/- on 09.01.2004 and repaid it during September, 2015. These admitted documents support the contention of the accused that he used to borrow loan from Vinayaka Enterprises which was being run by complainant. When these documents are admitted, the accused probabalised his defence that the blank cheque with his signature and blank e-stamp with his signature were obtained by the complainant as security while lending the loans referred to under Exs.D1 to D4. There is no reason to disbelieve the version of the accused in that regard. - 14 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023

17. It is pertinent to note that the complainant was working as a Conductor while accused was working as Driver in the BMTC. Both were drawing salary. It is not the contention of the complainant that the accused was not having any avocation or source of money. When both were drawing equal salary, it cannot be said that the accused was in acute need of money for purchase of an immovable property. Ex.P10 the sale deed discloses that the accused purchased the property along with his son and that son of the accused had borrowed loan of Rs.25,00,000/- from a nationalised bank. It is his contention that for paying the balance consideration amount, the accused had borrowed a loan of Rs.14.00 lakhs, the same is not proved by the complainant.

18. When the accused is successful in taking the defence and probabalising the same, the reverse burden lies on the complainant to prove his contention regarding his financial capacity in lending of the amount. PW-1 during cross-examination even though initially denied running of the financial company under the name and style as Vinayaka - 15 - NC: 2024:KHC:34973 CRL.A No. 190 of 2023 Enterprises, later admitted the same and also admits Exs.D1 to D4. He categorically states that he had not shown lending of huge amount of Rs.14.00 lakhs in his Income Tax returns. No scrap of paper is produced to show that he had lent such huge amount. Under the said circumstances, it is to be concluded that the complainant is not successful in proving the guilt of the accused beyond the reasonable doubt and therefore, the accused is entitled for acquittal.

19. I have gone through the impugned judgment of acquittal passed by the trial Court. It has taken into consideration of the materials on record and has arrived at a right conclusion, I do not find any reason to interfere with the same. Hence, I answer the above point in the negative and proceed to pass the following:- ORDER The criminal appeal is dismissed. CHS List No.: 2 Sl No.: 27 Sd/- (M G UMA) JUDGE