Criminal Appeal No. 648 of 2015 · The High Court
Case Details
- 1 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL No. 648 OF 2015 BETWEEN: SMT. B.L. LOLAKSHMMA W/O SHIVANANJAPPA AGED ABOUT 63 YEARS R/AT VINAYAKA EXTENSION 2ND CROSS, GUBBI TOWN, GUBBI-572216, TUMKUR DISTRICT REPRESENTED BY SPA HOLDER SRI G S VINAY S/O SHIVANANJAPPA. (BY SRI V B SIDDARAMAIAH, ADVOCATE) AND: SRI. SRIKANTH S.D S/O DINAMANI AGEDA BOUT 41 YEARS R/AT PAWAMANA, No.55 NAYAK LAYOUT, KOTHNURDINEE J P NAGAR, 8TH PHASE BANGLAORE - 560 076. (BY SRI RAJAGOPALA NAIDU, ADVOCATE) …APPELLANT …RESPONDENT Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE ORDER DATED:17.4.2015, PASSED BY THE VI ADDL. DIST. & SESSIONS JUDGE, THE TUMKUR,IN CRL.A.NO.120/2013 ACQUITTING - - 2 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT. THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT 1. This appeal is filed by the appellant – complainant challenging the judgment dated 17.04.2015 passed in Crl.A.No.120/2013 by the VI Additional District and Sessions Judge, Tumakuru, whereunder the judgment of conviction dated 22.10.2013 passed in C.C.No.1204/2006 by the Principal Civil Judge and J.M.F.C., Tumakuru convicting the respondent – accused for the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short hereinafter referred to as “N.I.Act”) has been set-aside and the respondent – accused has been acquitted. 2. Case of the appellant – complainant in brief is as under; The appellant – complainant and the respondent – accused were known to each other and the respondent – - 3 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 accused approached the appellant – complainant for the financial assistance of Rs.3,50,000/- for the urgent business purposes in December, 2004 and agreed to repay the same. The appellant – complainant lent Rs.3,50,000/- to the respondent – accused during December, 2004. In order to repay the said amount, the respondent – accused had issued a cheque – Ex.P3 in favour of the appellant – complainant. The said cheque has been presented by the appellant – complainant for encashment. The said cheque came to be returned dishonoured with a shara ‘funds insufficient’. The appellant – complainant got issued the statutory notice and it has been sent by R.P.A.D and also under certificate of posting. The notice sent by R.P.A.D has been returned on 17.03.2006 as “not claimed”. The notice sent under certificate of posting has been served. Inspite of service of notice, the respondent – accused has not paid the cheque amount within the statutory period. Hence, the appellant – complainant has presented a private complaint against the respondent – accused for the offence under Section 138 of the N.I.Act. The learned - 4 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 Magistrate took cognizance and registered C.C.No.1204/2006 against the respondent – accused for the offence under Section 138 of the N.I.Act. The plea of the respondent – accused has been recorded. The appellant – complainant in order to prove his case, got examined her Special Power of Attorney Holder as PW1 and got marked Ex.P1 to P12. The statement of the accused has been recorded under Section 313 of Cr.P.C. The respondent – accused has not led any defence evidence. Learned Magistrate after hearing the arguments on both sides, has formulated the points for consideration and passed the judgment dated 22.10.2013 convicting the respondent – accused for the offence under section 138 of
Legal Reasoning
the N.I.Act. The respondent – accused has challenged the said judgment of conviction before the Sessions Court in Crl.A.No.120/2013. The learned Sessions Judge after hearing the arguments on both the sides, has formulated the points for consideration and passed the judgment reversing the judgment of conviction and acquitted the respondent – accused of the offence under Section 138 of - 5 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 the N.I.Act. The said judgment of the Appellate Court in Crl.A.No.120/2013 has been challenged in this appeal. 3. Heard learned counsel for the appellant – complainant and learned counsel for the respondent – accused. 4. Learned counsel for the appellant – complainant would contend that Ex.P3 – cheque has been issued by the respondent – accused for making payment of the amount borrowed in a sum of Rs.3,50,000/-. The signature on the said cheque – Ex.P3 has been admitted by the respondent – accused. As the signature on the cheque has been admitted, a presumption arises under section 139 of the N.I.Act that the cheque – Ex.P3 has been issued for making payment of the debt. The said presumption has not been rebutted by the respondent – accused. The respondent – accused had not taken up any defence as to how his signed cheque has reached the hands of the appellant – complainant. The appellant – complainant has produced her loan account statement as per Ex.P11 – pass - 6 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 book, whereunder she had availed loan of Rs.2,00,000/- during November, 2004 which establishes that she had money of Rs.2,00,000/- at the relevant time. He further submits that Ex.P12 is the Pahani of an agricultural land measuring 2 acres 8 guntas which is standing in the name of the appellant – complainant and an entry of encumbrance would indicate that she had availed loan of Rs.50,000/- and the same would indicate that the appellant – complainant had that amount of Rs.50,000/- during 2004-05. The said Exs.P11 and 12 would establish that the appellant – complainant had the financial capacity to lend money to the respondent – accused. The notice got issued by the appellant – complainant has been served on the respondent – accused and inspite of that the respondent – accused had not issued any reply putting forth her defence. The notice sent by the registered post has been returned as ‘not claimed’ and the notice sent by certificate of posting has been returned ‘unserved’ to the respondent – accused. The respondent – accused has challenged the financial capacity of the appellant – - 7 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 complainant. The respondent – accused has not put forth any defence regarding her signed cheque landing in the hands of the appellant – complainant. Considering all these aspects, the learned Magistrate has rightly convicted the respondent - accused for the offence under section 138 of the N.I.Act. The Appellate Court had harped upon the financial capacity of the appellant – complainant and not read the evidence and the documents produced by the appellant – complainant in a proper perspective and therefore, the findings of the Appellate Court are perverse. As the respondent – accused has not rebutted the presumption drawn under Section 139 of the N.I.Act that the cheque has been issued for making payment of the debt, the respondent – accused requires to be convicted for the offence under Section 138 of the N.I.Act. With this, he prayed to allow the appeal. On the points urged, he placed reliance on the decision of the Hon’ble Apex Court in the case of Rajesh Jain Vs. Ajay Singh reported in AIR Online 2023 SC 807. On these grounds, he - 8 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 prayed to allow the appeal and affirm the judgment of conviction passed by the Trial Court. 5.
Legal Reasoning
Learned counsel for the respondent – accused would contend that the standard of proof for rebutting the presumption drawn under Section 139 of the N.I.Act is preponderance of probabilities. On that point, he placed reliance on the decision of the Hon’ble Apex Court in the cases of Basalingappa Vs. Mudibasappa reported in (2019) 5 SCC 418 and Rajaram S/o Sriramulu Naidu (since deceased) through L.Rs. Vs. Maruthachalam (since deceased) through L.Rs. reported in 2023 LiveLaw (SC) 46. He further contended that PW1 has not stated how the appellant – complainant and the respondent – accused were known to each other. The specified date of borrowing is not stated. The appellant – complainant had no capacity to lend the huge amount of Rs.3,50,000/-. The friend who is stated to be present at the time of borrowing has not been examined. There are no documents regarding the appellant – complainant - 9 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 lending money to the respondent – accused. The appellant – complainant had no money in her account and she is not an Income Tax assessee. PW1 admitted that his mother who is the appellant – complainant was not doing any avocation and she had no income. Considering these aspects, the appellant – complainant has not established her financial capacity to lend money to the respondent – accused. The Appellate Court found that the findings of the Trial Court are perverse and reversed the judgment of conviction by a reasoned judgment. The Special Power of Attorney Holder of the appellant – complainant who has been examined as PW1 has no personal knowledge. Considering the circumstances and the evidence of the appellant – complainant and the other materials placed on record, the respondent – accused has rebutted the presumption. With this, he prayed to dismiss the appeal. 6. Having heard learned counsels, this Court has perused the impugned judgment and the Trial Court - 10 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 records. Considering the grounds urged, the following point arises for consideration; “Whether the Appellate Court has erred in reversing the judgment of conviction passed in C.C.No.1204/2006 dated 22.10.2013 and acquitting the respondent – accused of the offence punishable under Section 138 of the N.I.Act?” 7. My answer to the above point is in the affirmative, for the following reasons; It is the specific case of the appellant – complainant that the respondent – accused had borrowed Rs.3,50,000/- for her urgent business purposes during December, 2004. In order to make repayment of the said amount borrowed, the respondent – accused had issued Ex.P3 – cheque. The respondent – accused had admitted his signature on Ex.P3 – cheque. As the respondent – accused had admitted his signature on the cheque – Ex.P3, the presumption has to be drawn under Section 139 of the N.I.Act that the cheque has been issued for - 11 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 making payment of debt. The said presumption is a rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probabilities as held by the Hon’’ble Apex Court in the cases of Basalingappa (supra) and Rajaram (supra). Considering the said aspect, it is to be ascertained as to whether the said presumption has been rebutted by the respondent – accused. 8. PW1 is the Special Power of Attorney holder of the appellant – complainant and he is her son. The counsel for the respondent – accused has cross examined PW1 at length. On reading of the entire cross examination, there is no defence put forth as to how the signed cheque of the respondent – accused landed in the hands of the appellant – complainant. There is no defence at all by the respondent – accused as to how his signed cheque has reached the hands of the appellant – complainant. The respondent – accused has not led any defence evidence. Considering the entire cross examination, the defence of - 12 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 the respondent – accused is that he had not borrowed any amount from the appellant – complainant and the appellant – complainant had no capacity to lend Rs.3,50,000/-. 9. PW1 who is the Special Power of Attorney Holder of the appellant – complainant has admitted that the appellant – complainant had no avocation and she had no income. Ex.P11 is the pass book of the loan account of the appellant – complainant Smt.Lolakshamma in Tumakuru Veerashaiva Co-operative Bank Limited, Gubbi Branch, Tumakuru. Considering the entries in the said pass book – Ex.P11, the appellant – complainant had availed loan of Rs.2,00,000/- on 19.11.2004. Considering the said aspect, the appellant – complainant had an amount of Rs.2,00,000/- in November, 2004. The said lending by the appellant – complainant to the respondent – accused was during December, 2004 ie., nearly one month after the appellant – complainant availing the said loan. Ex.P12 is the R.T.C of Sy.No.65 of the Rayawara - 13 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 Village of Gubbi Taluk measuring 2 acres 8 guntas and it is standing in the name of the appellant – complainant. The said document would indicate that an agricultural land is standing in her name and she is getting income from the said land. In Column No.11 of the said R.T.C – Ex.P12 there is an encumbrance with regard to the appellant – complainant availing loan of Rs.50,000/- by giving security of that property with V.S.S.B.N, Gubbi during the year 2004. The said aspect would also indicate that the appellant – complainant had money of Rs.50,000/- during the year 2004. Considering all these aspects, the capacity of the appellant – complainant to lend Rs.3,50,000/- during December, 2004 cannot be doubted. The Appellate Court has not read and understood these two documents Exs.P11 and 12 in a proper perspective. 10. The Hon’ble Apex Court in the case of Rajesh Jain Vs. Ajay Singh reported in AIR Online 2023 SC 807 has observed thus; - 14 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 “55. As rightly contended by the appellant, there is a fundamental flaw in the way both the Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.” 11. The Hon’ble Apex Court in the said case has held that if the respondent – accused has not discharged the onus on rebutting the presumption, the Court can straight away - 15 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 proceed to convict him subject to satisfaction of the other ingredients under Section 138 of the N.I.Act. In the case on hand, the respondent – accused has failed to rebut the presumption drawn under Section 139 of the N.I.Act that the cheque has been issued for making payment of the debt. 12. The appellant – complainant after dishonour of Ex.P3 - cheque has got issued notice as per Ex.P7 to the respondent – accused by a registered post and also under certificate of posting. The notice issued by a registered post has been returned with an endorsement “not claimed”. As the notice issued to the same address has been returned as “not claimed”, it is clear that the notice sent to the same address under certificate of posting has been served on the respondent – accused. The respondent – accused inspite of service of notice has not paid the cheque amount within the period of fifteen days. The appellant – complainant has presented the complaint within the statutory period. Considering all these aspects, - 16 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 the appellant – complainant has proved that the respondent – accused has committed the offence under Section 138 of the N.I.Act. Considering all these aspects, the Trial Court in C.C.No.1204/2006 has rightly convicted the respondent – accused for the offence under Section 138 of the N.I.Act. The learned Sessions Judge has erred in reversing the said judgment of conviction passed by the Trial Court. The finding recorded by the Appellate Court are perverse. Therefore, the judgment passed by the Appellate Court in Crl.A.No.120/2013 requires to be set-aside and the judgment of conviction passed in C.C.No.1204/2006 requires to be affirmed. In the result, the following;
Decision
ORDER The appeal is allowed. The judgment dated 17.04.2015 passed in Crl.A.No.120/2013 by the VI Additional District and Sessions Judge, Tumakuru is set-aside. The judgment of conviction dated 22.10.2013 - 17 - NC: 2025:KHC:4839 CRL.A No. 648 of 2015 passed in C.C.No.1204/2006 by the Principal Civil Judge and J.M.F.C Tumakuru is affirmed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE GH List No.: 1 Sl No.: 19