SRI MANJUNATHA G v. SRI MUNIRAJA

the Trial Court.

#3. The factual matrix of the case, in brief, is as follows: The accused is well acquainted with the complainant. During the month of October, 2015, the accused along with his brother Munithimmarayappa approached the complainant to borrow a hand loan of Rs.15,00,000/- to clear his business commitments. Based on the close relationship, the complainant agreed to arrange the said money and advanced the same as a - 3 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR hand loan to the accused i.e., Rs.15,00,000/- in the presence of said Munithimmarayappa during the first week of October,

#2015. Though the accused promised to repay the same within six months, later he extended the time for a period of one year. However, even after lapse of one year, he failed to repay the same. Finally, based on the repeated request of the complainant, the accused issued a cheque bearing No.099219 drawn on UTI Bank (now Axis Bank) Yelahanka New Town Branch, Bengaluru dated 27.09.2019 for a sum of Rs.15,00,000/- to the complainant towards discharging the legally recoverable debt. When the complainant presented the said cheque for encashment, the same was dishonored and an endorsement issued to that effect stating 'Account closed'. The same was intimated to the accused by the complainant by issuing a legal notice dated 19.11.2019. The said notice was duly served to the accused. Despite, the accused neither replied to the notice nor repaid the hand loan. Hence, left with no other option, the complainant filed a private complaint under Section 200 of Cr.P.C against the accused for the offence punishable under Section 138 of the N.I. Act before the Trial - 4 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR court. After service of notice, the accused appeared before the Trial Court.

#4. In order to prove the case before the Trial Court, the complainant examined himself as PW.1 and marked 9 documents as Exs.P1 to P9. The accused also examined himself as DW.1 and marked 1 document on his behalf as Ex.D1.

#5. On assessing oral and documentary evidence, the Trial Court acquitted the accused for the offences punishable under Sections 138 and 142 of the N.I. Act, as under: "ORDER Acting U/Sec. 255(1) of Cr.P.C the accused is acquitted of the offence punishable under Section 138 and Section 142 of NI Act. The bail bond of the accused shall stand cancelled." Challenge to the same is lis before this Court.

#6. I have heard the learned counsel Sri. Shridhara K., for the appellant. Though notice served to the accused, he remained absent.

#7. The primary contention of the learned counsel for the appellant/complainant is that the Trial Court has grossly - 5 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR erred while acquitting the accused despite the complainant placing sufficient evidence and documents before the Trial Court to prove the legally recoverable debt against the accused for a sum of Rs.15,00,000/-. According to him, the accused approached him in the month of October, 2015 along with his brother Munithimmarayappa and requested for a hand loan of Rs.15,00,000/- to clear his business commitments. Since the brother of the accused was the close friend of complainant, he agreed to pay the hand loan to the accused. Further, at that relevant point of time, the complainant had sufficient amount of Rs.15,00,000/- by virtue of the amount received i.e., Rs.25,00,000/- by cancellation of Sale Agreement dated

12.03.2015.

#8. According to the learned counsel, the acquaintance of the accused and complainant through the brother of accused one Munithimmarayappa is not seriously disputed by the accused. To prove the lending capacity of the complainant, apart from his oral evidence he also placed the document i.e., the Agreement of Sale entered by him on 21.07.2014 with one Hanumantharayappa for a sale consideration of Rs.29,00,000/- in respect of property bearing site No.310/78/17/8/2 situated - 6 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR at Shivanahalli village, Yelahanka Hobli, Bengaluru North Taluk as per Ex.P8. Subsequently, on 12.03.2015, the said Sale Agreement was cancelled between the complainant and the vendor Hanumantharayappa by entering into an cancellation of Agreement of Sale dated 12.03.2015 and thereby his vendor refunded the advance sale consideration of Rs.25,00,000/- to the complainant as per Ex.P9.

#9. The learned counsel further contended that the specific case of the complainant is that in the month of October, 2015, the accused approached him for a hand loan of Rs.15,00,000/- and he paid the same which was readily available with him. The specific defence of the accused is that the complainant is a stranger to him and absolutely there is no transaction with the complainant as alleged by him in the complaint is totally far from truth and not sustainable for the reason that before lodging this private complaint the accused himself lodged the complaint against the complainant before the Bagalur Police Station on 27.09.2019 as per Ex.P7 stating that he borrowed a hand loan of Rs.10,00,000/- from the complainant for his urgent financial need. The said complaint was received and endorsed by Bagalur Police as per Ex.P7. The - 7 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR learned counsel further contended that after return of the cheque in question reason 'Account Closed', immediately the complainant got issued a legal notice to the accused. Though the said legal notice served on him, he failed to reply the said legal notice. Mere denial of cheque in question and loan amount before the Trial Court may not be sufficient to overcome from the accusation of the offence punishable under Section 138 of the N.I. Act without placing any probable or believable defence with documents. Hence, according to the learned counsel, all these circumstances are not properly appreciated by the Trial Court and as such, the impugned judgment passed by the Trial court is liable to set-aside and accused be convicted for the offence punishable under Section 138 of the N.I. Act. With these submissions, he prays to allow the appeal.

#10. I have considered the submission made by the learned counsel for the appellant and also carefully perused the documents and records made available before this Court including the Trial Court judgment. - 8 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR

#11. It could be gathered from records, issuance of cheque in question and signature of the accused on it is not seriously disputed by the accused. Though a suggestion was made in the cross-examination of PW.1-complainant by denying the signature of accused on Ex.P1, however, the accused denied the same and specifically stated that in his presence the accused signed the cheque in question. It is the defence of the accused that the complainant is a stranger to him. However, on perusal of his chief-examination it is stated that there was a business rivalry between accused and his brother Munithimmarayappa and the said Munithimmarayappa is the close friend of complainant, as such, the complainant colluding with the brother of accused, misused the cheque in question for unlawful instruction brother Munithimmarayappa. According to the accused, in the year 2011, his Bank account was closed and he had not issued any cheque to the complainant thereafter. However, on perusal of Ex.P7 i.e., the complaint lodged by the accused before the Bagalur Police on 27.09.2015, the same depicts that the accused for his urgent financial requirement, approached the complainant through his brother Munithimmarayappa and - 9 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR borrowed a hand loan of Rs.10,00,000/- from the complainant and repaid a sum of Rs.5,00,000/- out of the said loan amount and failed to repay the remaining balance. As such, on

27.09.2019, the complainant along with his henchmen approached the accused and made an attempt to assault the accused. The said complaint was received and endorsed by the Bagaluru Police. Hence, thus it is clears that the accused had borrowed hand loan from the complainant and failed to repay the said loan amount. Though the complainant stated in Ex.P7 that he obtained hand loan only to the tune of Rs.10,00,000/- and repaid Rs.5,00,000/- to the complainant, to substantiate the said aspect, the complainant has not produced any piece of documents/evidence, instead strangely stated complainant is a stranger in his defence before the Trial Court.

#12. Further, the complainant questioned the lending capacity of accused i.e., the loan of Rs.15,00,000/- in the cross-examination of PW.1. However, to prove the same, the complainant produced Exs.P8 and P9 i.e., Agreement of Sale entered between one Hanumantharayappa for purchase of landed property for a sum of Rs.29,00,000/- and the payment of advance sale consideration of Rs.25,00,000/- to the vendor - 10 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR and subsequently, the said Agreement of Sale was cancelled and by virtue of cancellation of Sale Agreement dated

12.03.2015 as per Ex.P9, the complainant received a sum of Rs.25,00,000/- from his vendor. Hence, an amount of Rs.25,00,000/- was readily available with the complainant at the time of advancing the loan amount to the accused.

#13. It is further stated by the accused that he had closed his Bank account in the year 2011 itself and thereafter, he had not issued any cheque including Ex.P1 to anybody and to that effect, he placed the document-Ex.D1, however the signature of the accused on Ex.P1 is not seriously disputed by the accused. In such circumstance, it cannot be held that mere closing of Bank account by the accused itself would take away his liability of him repayment of loan amount.

#14. In such circumstance, in my considered view, the Trial Court has erred while acquitting the accused for the offence punishable under Section 138 of N.I. Act by overlooking sufficient evidence placed by the complainant. Nonetheless, the accused failed to put forward a probable defence to rebut the initial presumption arising in favor of the complainant under - 11 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR Sections 118 and 130 of the N.I. Act. In that view of the matter, the offence punishable under Section 138 of the N.I. Act is proved against the accused by the complainant with reliable evidence and documents. Hence, interference in the impugned judgment is required. Accordingly, I proceed to pass the following. ORDER i. The Criminal Appeal is allowed. ii. The judgment dated 14.03.2025 C.C.No.3072/2020 passed by the XII Addl. Chief Judicial Magistrate, Bengaluru set-aside. iii. The accused is convicted for the offence punishable under Section 138 of the N.I. act. iv. Since the transaction is of the year 2015, though cheque amount Rs.15,00,000/-, the accused shall pay a fine of Rs.20,00,000/- to the complainant within a period of three months from the date of receipt of certified copy of this judgment, failing which, he shall undergo simple imprisonment for a period of one year. - 12 - NC: 2025:KHC:40093 CRL.A No. 845 of 2025 HC-KAR v. Registry is directed to send back the Trial Court Records along with a copy of this judgment to the concerned Trial Court, forthwith. SD/- (RAJESH RAI K) JUDGE HKV List No.: 1 Sl No.: 13