SRI ADINARAYANASWAMY J v. SMT DHANALAKSHMI M

3. Brief facts of the case are that, the complainant has filed the private complaint in P.C.R.No.5316/2017 against the accused alleging commission of offence punishable under Section 138 of the Act. It is the contention of the complainant that accused was known to him through her husband Shivanna @ Shivaiah and the accused approached the complainant requesting for hand- loan of Rs.3,50,000/-. Accordingly, complainant lent an amount of Rs.3,50,000/-. Towards discharge of said loan amount, the accused issued a cheque bearing No.465059 dated 17.02.2017. When the cheque was presented for - 3 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 encashment, same was dishonoured as payment was stopped by drawer. Legal notice was issued to the accused notifying dishonour of the cheque and calling upon her to pay the cheque amount. After receipt of the notice, accused had given a reply, but not paid the cheque amount. Thereby the accused has committed an offence punishable under Section 138 of the Act. Hence, complainant requested the Trial Court to take action against the accused and to direct the accused to pay compensation to the complainant.

4. The Trial Court took cognizance of the offence and registered the case in C.C.No.14829/2017. The accused had appeared before the Trial Court and pleaded not guilty for the offence under Section 138 of the Act. He claimed to be tried. The complainant examined himself as PW-1 and got marked Exs.C1 to C13 in support of his contentions. The accused had denied all the incriminating material available on record in his statement recorded under Section 313 of Cr.P.C. She examined herself as DW-1 and got marked Exs.D1 to D12 in support of her - 4 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 contentions. The Trial Court after taking consideration all these materials came to the conclusion that the accused is successful in rebutting the presumption under Section 139 of the Act, but the complainant has failed to discharge his burden regarding lending of the amount and therefore, passed the impugned judgment acquitting the accused. Being aggrieved by the same, complainant is before this Court.

5. Heard Sri.T.S.Venkatesha, learned counsel for the complainant and Sri.V.B.Shivakumar, learned counsel for the accused.

6. Learned counsel for the complainant submitted that the accused was working as a nurse in a Government Hospital and she was doing other business as well. Initially, when reply notice as per Exhibit-P6 was issued, she categorically denied issuance of the cheque and also contended that the signature found on Exhibit-P1 is forged by the complainant. But when she was cross-examined before the Trial Court, she categorically admitted her - 5 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 signature found on Exhibit-P1. When issuance of the cheque and her signature is admitted, the presumption under Sections 118 and 139 of the Act would arise. The accused even though set a defence, has not probabilised the same. Under such circumstances, the accused is liable for conviction.

7. Learned counsel contended that Exhibits-C7 to C10 are the income tax returns pertaining to the complainant. These documents disclose complainant was having sufficient income and he had advanced loans. Exhibit-C10 is the Income tax returns for the assessment year 2018-19. In the balance sheet the complainant has specifically shown, the loan advanced to Smt.Dhanalakshmi.M., i.e., the accused and the amount of Rs.3,50,000/- is also shown. When such clinching documents are placed before the Court, the trial court committed an error in forming an opinion that the complainant has not proved his capacity to lend the money and that he has not proved the actual lending of the - 6 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 amount. The trial court has ignored all these clinching documents.

8. Learned counsel further submitted that Exhibit- C11 is the passbook pertaining to the complainant. This document discloses that a sum of Rs.1 lakh was withdrawn by the complainant on 04.02.2014. He has withdrawn a sum of Rs.2.5 lakhs on 08.07.2014 and again a sum of Rs.1 lakh on 25.02.2016. It was during this period of time, the amount was lent to the accused. This clinching document was also ignored by the trial court, to acquit the accused.

9. Learned counsel placed reliance on decisions of the Hon'ble Apex Court in ROHITBHAI JIVANLAL PATEL vs STATE OF GUJARTH & ANOTHER - 2019 ACD 540 (SC); MMTC LTD & ANOTHER vs. M/S.MEDCHL CHEMICALS & PHARMA (P) LTD. & ANOTHERS - AIR 2002 SC 182; GOA PLAST PVT. LTD. vs. CHICO URSULA D'SOUZA - 2004 Crl.L.J. 664; SYED WAZEER PASHA vs. ARIFULLA KHAN - AIRONLINE 2022 - 7 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 KAR 41. D.N.DEVARAJU vs. E. NARAYANAGOWDA - LAWS(KAR) - 2016 - 3 - 215, in support of his contention that when the accused categorically admitted the issuance of the cheque as per Exhibit-P1, with her signature the presumption under Section-139 of the Act would arise and under such circumstances, she is liable for conviction. The trial court ignored the settled position of law and proceeded to acquit the accused without any basis. Hence, he prays for allowing the appeal.

10. Per contra, learned counsel respondent / accused contended that the complainant has made bald allegations in the complaint regarding lending of amount of Rs.3,50,000/- to the accused. There was no necessity for her to borrow the amount. The accused had registered an FIR against the complainant on 11.01.2017 alleging that she had borrowed loan of only Rs.1 lakh and the complainant is charging exorbitant interest and got signatures on blank cheque and bond papers. The said complaint was registered in Crime No.14/2017. It is only thereafter the complainant presented the cheque for - 8 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 encashment. By that time, 'stop payment' instructions was already given to the Bank and accordingly the cheque was dishonoured. After receipt of the legal notice, a reply as per Ex.C6 was issued by the accused taking specific defence in that regard. The accused had also contended that Ex.C1(a) is the forged signature of the accused and she has not issued the same, as she never borrowed any amount from the complainant. By taking such a defence and producing relevant documents, the accused probablised the defence. Inspite of that, the complainant has not proved lending, manner of payment or existence of legally enforceable debt. Therefore, the Trial Court was right in acquitting the accused. It has passed a well- reasoned order and it does not call for interference. Accordingly, he seeks for dismissal of the appeal.

11. In view of the rival contentions urged by learned counsel for both the parties, and on perusal of the material including the trial court records, the point that would arise for my consideration is: - 9 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 "Whether the impugned judgment of acquittal passed by the Trial Court suffers from perversity or illegality and calls for interference by this Court?"

12. My answer to the above point is in the 'Negative' for the following reasons: It is the specific contention of the complainant in the complaint that a sum of Rs.3,50,000/- was lent to the accused. But when the amount of Rs.3,50,000/ was lent by the complainant to the accused is not stated in the complaint. The complainant only states that towards discharge of the said loan of Rs.3,50,000/- the accused had issued a cheque dated 17.02.2017, which is marked as Exhibit-C1. On presentation of the cheque, the same was dishonored with an endorsement that 'payment stopped by drawer'.

13. A legal notice was admittedly was served on the accused and the accused has issued his reply as per Exhibit-C6 taking specific defence that the said cheque belongs to her bank account, but denied to have signed - 10 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 the same. She contended that her signature on Exhibit-C1 is forged. She also contended that her husband had filed a complaint against the complainant alleging charging of exorbitant interest on the loan of Rs.1 lakh borrowed by him and also her husband contended that blank cheques were obtained by the complainant and there is possibility of misusing the same. Therefore, it is the contention of the accused that the cheque - Exhibit-C1 was also forcibly taken by the complainant and presented for encashment, even though there is no existences of legally enforceable debt.

14. The accused even though denied issuance of the cheque with her signature in the reply, during her cross-examination she categorically admitted that the cheque belonged to her bank account and it bears her signature. Once the accused admits that the cheque belongs to her bank account and it bears her signature, the presumption under Sections-118 and 139 of the Act would arise. The initial burden on the complainant gets - 11 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 discharged and it is for the accused to rebut the presumption.

15. To discharge the burden, the accused has cross - examined the complainant, produced several documents, also stepped into the witness box and examined herself as DW-1. The accused has deposed about her defence and also produced Exhibit-D9 and D10, the copy of the complaint lodged by her husband and the FIR that was registered on the basis of the complaint. In the FIR the husband of the accused has stated that the complainant is in the habit of lending amount and charging exorbitant interest of 8 to 13% per month. He refers to issuance of various blank cheques in favour of the complainant, in respect of the loans that were availed by some other persons. He also contends that during October 2016, since he could not pay the exorbitant interest charged by the complainant, she was forced to leave the house. In that regard, the accused had filed a missing complaint to the Police on 05.01.2017 which was registered in FIR No.4/2017. Subsequently, he returned to the house on - 12 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019

08.01.2017. Therefore, he requested the Police to take action against the complainant for charging exorbitant interest and also harassing the accused. This complaint was filed on 13.01.2017 and on the same day the FIR in Crime No.14/2017 was registered by Channammanakere Police Station.

16. It is stated that a B-report is filed on the said FIR subsequently. But the fact remains that subsequent to filing of this complaint and registration of the FIR, the cheque Exhibit-C1, dated 17.02.2017 was came to be presented for encashment and it was dishonored as 'payment stopped by the drawer', as per endorsement at Exhibit-C2, dated 21.02.2017.

17. Exhibits-D9 and 10 were produced by the accused and contended that under these circumstances, the blank cheques with signature were obtained by the complainant, even though there was no legally enforceable debt. But strangely is absolutely no cross- examination to DW-1 by the learned counsel for the - 13 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 accused. Non-cross-examination of DW-1 on Exhibit-D9 and D10 is fatal to the case of the complainant. When the complainant does not dispute Exhibits-D9 and D10, even though the case is closed by filing a B-report, the complainant cannot contend that he is entitled to ignore these documents, which were referred while taking the defence by issuing the reply at the initial stage, cross- examined the complainant who is examined as PW-1 and also examining herself as DW-1 by producing several documents, including Exhibits-D9 and D10. Thus the accused is successful in probabalising her defence.

18. Even after admitting issuance of the cheque with her signature, when the accused is successful in rebutting the legal presumption under Section-118 and 139 of the Act, the burden again shifts on the complainant to prove actual lending and existence of legally enforceable debt, without the assistance of the legal presumption.

19. The complainant has not stated the date on which the amount that was lent. In the complaint he only - 14 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 states that a sum of Rs.3,50,000/- was lent in favour of the accused. But later he produced the bank pass-book, Exhibit-C11 to contend that on various dates he has withdrawn cash from his bank account and on such dates he had lent the amount in installment to the accused. There is absolutely no explanation for not raising such contention in the complaint. There are no documents to support the lending of the amount. Moreover, when specific allegations are made against the complainant by filing Exhibit-D9 by the husband of the accused and when there is no cross-examination to DW-1 by the learned counsel representing the complainant, it cannot be held that the complainant has proved the lending of the money. It is pertinent to note that Exhibits-D9 and D10 were much prior to the presentation of the Cheque Exhibit-C1 by the complainant.

20. In view of all these facts and circumstances, I am of the opinion that the accused is successful in rebutting the legal presumption by raising a probable defence, but the complainant is not successful in proving - 15 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019 actual lending of the amount and existence of the legally enforceable debt.

21. Learned counsel for the appellant has placed reliance on various rulings of the Hon'ble Apex Court referred to above. In all these decisions, the Hon'ble Apex court has reiterated the position of law, as to when the initial burden on the complainant gets discharged which give raise to the legal presumption under Section-118 and 139 of the Act, what is the degree of burden on the accused to rebut the presumption and what will be the effect of rebutting the presumption. The position of law highlighted in these decisions cannot be disputed. When once the accused has taken the defence and probablised the same, the presumption gets rebutted and burden shifts on the complainant. Thereafter, he has to prove the lending of the amount and existence of legally enforceable debt, without the help of the presumption of law. But the complainant has failed to discharge his burden to prove the guilt of the accused. - 16 - NC: 2024:KHC:43100 CRL.A No. 1831 of 2019

22. In view of the discussions held above, I am of the opinion that the appeal is liable to be dismissed. I have gone through the impugned judgment of acquittal passed by the trial court. It has taken into consideration the oral and documentary evidence in the light of the averments made in the complaint and arrived at the right conclusion. I do not find any reason to interfere with the same. Accordingly, I answer the above point in the negative and proceed to pass the following: ORDER The appeal is dismissed. SD/- (M G UMA) JUDGE KNM para-1 to 5 & 10/ JJ para-6 to 20 List No.: 2 Sl No.: 24