SRI A S SRINIVASA v. SRI SURESH

referred to by their rank before the trial Court.

3. It is the case of the complainant that he and accused are good friends since past 10 years i.e since

2004. There are certain financial transactions between complainant and accused as accused used to borrow hand loan from the complainant. Similarly, during CRL.A NO.647 OF 2018 3 December 2012, accused sought financial assistance in a sum of Rs.15 lakhs as he was constructing a house and that he was also required finance for his business. Accused promise to repay the same within two years. Accordingly, complainant paid hand loan in a sum of Rs.15 lakhs to the accused out of matured LIC bonds and also utilising the lease amount paid by the tenants. When accused fail to repay the amount as per promise and when demanded by the complainant, accused issued cheque dated 05.12.2014. However, when the cheque was presented for encashment, it was returned with an endorsement "Refer to Drawer". In regard, complainant got issued legal notice to the accused. Though it is duly served, accused has neither paid the amount due not sent any reply and hence, the complaint.

4. After service of summons accused appeared before the trial Court and contested the case by pleading not guilty. CRL.A NO.647 OF 2018 4

5. In order to prove the allegations against accused, complainant got himself examined as PW-1 and got marked Ex.P1 to 8.

6. During the course of his statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant.

7. The accused has not led any defence evidence.

8. Vide the impugned judgment and order the trial Court has acquitted the accused on the ground that complainant has failed to prove his financial capacity.

9. Aggrieved by the same complainant has filed this appeal, contending that the trial Court has failed to appreciate the facts and circumstances of the case. It has failed to apply the basic principles governing the provisions of Section 138 of N.I. Act. It has failed to rebut the presumption under Section 139 of N.I Act. When accused admit that cheque belongs to him, drawn on his account maintained with his banker and it bears CRL.A NO.647 OF 2018 5 his signature, presumption under Section 139 of N.I Act is attracted, placing the burden on accused to rebut the presumption. Though complainant has proved his financial capacity, the trial Court has failed to appreciate the same. The trial Court has also not appreciated the fact that accused has not sent reply to the legal notice. The accused has not disputed the fact that he has handed over property documents and blank stamp paper as security for the loan and this fact is also not appreciated by the trial Court. Viewed from any angle the impugned judgment and order are not sustainable and pray to allow the appeal, convict the accused and sentence him in accordance with law.

10. On the other hand, learned counsel for accused has supported the judgment and order and submits that earlier accused had financial transactions with complainant and at that time he had taken signature of accused to a blank cheque and blank stamp paper and misusing the same he has filed the complaint. Since the complainant has failed to prove his CRL.A NO.647 OF 2018 6 financial capacity, the trial Court has rightly dismissed the complaint and pray to dismiss the appeal also.

11. The complainant has filed I.A.No.1/2024 under Section 391 Cr.P.C to permit him to produce the following additional documents: 1) The original Sale Deed dated 02.03.2006. 2) The original signed blank stamp paper worth Rs.100/-

12. In the affidavit appended to the application, the complainant has stated that at the time of borrowing hand loan of Rs.15 lakhs, accused had handed over original sale deed pertaining to site and has also given a blank signed stamp paper and on that basis, the complainant has lent hand loan of Rs.15 lakhs. Production of these documents is necessary to appreciate the case of the complainant and pray to allow the application.

13. Heard arguments of both sides and perused the record. CRL.A NO.647 OF 2018 7

14. Accused admit the fact that cheque question belongs to him drawn on his account maintained with his banker and it bears his signature. But he has denied that he borrowed hand loan of Rs.15 lakhs and issued the cheque in question. On the other hand, he has claimed that earlier he had borrowed hand loan from the complainant and at that time he had taken a signed blank cheque and blank signed stamp paper on earlier occasion and utilising the said cheque, he has filed this complaint making false claim. Accused has disputed the service of legal notice as per Ex.P6 and 7 acknowledgements. However, he does not dispute the address to which they were sent. Admittedly, the accused has not sent the reply to the legal notice.

15. Having regard to the fact that the cheque in question belongs to accused, drawn on the account maintained with his banker and it bears his signature, presumption under Section 139 of the N.I Act is operating in favour of the complainant, placing the initial burden on the accused to prove that the cheque was not CRL.A NO.647 OF 2018 8 issued towards repayment of any debt or liability and on the other hand to establish the circumstances in which the cheque has reached the hands of the complainant. Though the accused has not sent reply to the legal notice, disputing the financial capacity of complainant to lend him hand loan of Rs.15 lakhs, during the trial he has challenged his financial capacity.

16. Therefore, as held by the Hon'ble Supreme Court in Tedhi Singh Vs Narayan Das Mahant (Tedhi Singh)1, where the accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant, at the first instance, complainant need not prove his financial capacity. However, at the trial if the financial capacity of complainant is challenged, then it is for the complainant to prove the same.

17. In APS Forex vs Shakti International Fashion Linkers Pvt. Ltd (APS Forex)2, the Hon'ble Supreme Court held that when accused raises issue of financial capacity of complainant, in support of his probable 1 2022 SCC OnLine SC 302 2 (2020) 12 SCC 724 CRL.A NO.647 OF 2018 9 defence, despite presumption operating in favour of complainant regarding legally enforceable debt under Section 139 of N.I. Act, onus shifts again on the complainant to prove his financial capacity by leading evidence, more particularly when it is a case of giving loan by cash and thereafter issue of cheque.

18. In Vijay Vs. Laxman and Anr (Vijay)3, K.Subramani Vs. K.Damadara Naidu (K.Surbamani)4 and K.Prakashan Vs. P.K.Surenderan (K.Prakashan)5, the Hon'ble Supreme Court held presumption under Section 139 of N.I. Act, is a rebuttable presumption and when accused rebut the same by preponderance of probabilities, it is for the complainant to prove his case beyond reasonable doubt including the financial capacity.

19. In John K.Abraham Vs. Simon C. Abraham & Anr (John K.Abraham)6, the Hon'ble Supreme Court held that in order to draw presumption under Sections ORDER (i) Appeal filed by the complainant under Section 378(4) of Cr.P.C is dismissed. (ii) I.A.No.1/2024 filed by complainant under Section 391 of Cr.P.C is hereby rejected. (iii) The impugned judgment and order dated

19.01.2018 in C.C.No.3188/2015 on the file of XIII ACMM, Bengaluru is hereby confirmed. (iv) The Registry is directed to send back the trial Court records along with copy of this order forthwith. RR Sd/- JUDGE