Criminal Appeal No. 622 of 2023 · The High Court
Case Details
- 1 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR CRIMINAL APPEAL NO. 622 OF 2023 (A) BETWEEN: SRI. H.R. PILLAPPA AGED ABOUT 54 YEARS CHIEF EXECUTIVE OF ADISHAKTHI THOTAGAARARA PATTHINA SAHAKARA SANGHA NO.273/3, 17TH CROSS, 8TH MAIN THANAPPA GARDEN SAMPANGIRAMA NAGAR BANGALORE-27 (BY SRI. VASANTH KUMAR N, ADVOCATE) …APPELLANT AND: SRI. C. MUNINARAYANAPPA S/O CHIKKANARAYANAPPA AGED ABOUT 46 YEARS RESIDING AT NO.BHIMAPURA VILLAGE NANDUGUDI HOBLI, HOSKOTE TALUK BANGALORE RURAL DISTRICT Digitally signed by SHAKAMBARI Location: High Court of Karnataka …RESPONDENT (BY SRI. SHARATH S. GOWDA, ADVOCATE) THIS CRIMINAL APPEAL IS FILED U/S 378 (4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 01.09.2022 PASSED BY THE XXVI ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU IN C.C. NO.25634/2018 BY ALLOWING THIS CRIMINAL APPEAL AND CONVICT AND SENTENCE THE RESPONDENT/ACCUSED FOR THE OFFENCE WITH WHICH HE WAS CHARGED. - 2 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 THIS CRIMINAL APPEAL HAVING BEEN RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT, DELIVERED/PRONOUNCED THE FOLLOWING: CORAM: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR CAV JUDGMENT (PER: HON'BLE MR JUSTICE RAMACHANDRA D. HUDDAR) This appeal is directed against the judgment of acquittal dated 01.09.2022 passed in CC No.25634/2018 by the XXVI ACMM, Bengaluru.
Facts
Facts of the Case: 2. The complainant-appellant, being the CEO in Adishakthi Thotagarara Pattina Sahakara Sangha registered Society with due authorization, filed complaint against the accused alleging offence under Section 138 of Negotiable Instruments Act, 1881 (in short `the NI Act'). It is the case of the complainant that, accused and his family members approached the complainant Society asking for a loan of Rs.16,00,000/- by mortgaging their property. Based upon that request, complainant-Society sanctioned a loan of Rs.6,00,000/- and credited to the - 3 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 account of the accused vide loan Account No.338 by way of a cheque bearing No.867933 drawn on Apex Co- operative Bank Ltd., Chamarajpet Branch, Bengaluru on 13.06.2015. At the time of availing loan, accused assured to pay the installments towards loan regularly but, it is alleged, that accused became chronic defaulter. The complainant-Society requested the accused to repay the loan amount and finally accused issued a cheque for Rs.2,00,000/- on 22.04.2018 drawn on Canara Bank, Tavarakere Branch, Hosakote. When the said cheque was presented for encashment, it was returned as "funds insufficient' by endorsement dated 05.06.2018. It is the case of the complainant that, thereafter, the complainant- Society issued a statutory notice on 22.06.2018 which was duly served on the accused. Despite service of notice, accused did not pay the cheque amount, therefore, the complainant-Society filed a private complaint before the trial Court. - 4 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 3. On filing the complaint, the trial Court took cognizance of offence after recording sworn statement, as
Legal Reasoning
prima facie case was made out, issued process against the accused and accordingly the criminal case stated supra came to be registered against the accused for the offence under Section 138 of NI Act. The accused pleaded not guilty before the trial Court and claimed to be tried. 4. The complainant-H.R.Pillappa being the CEO of the complainant-Society was examined as PW.1 to prove the case against the accused and produced eight documents which were marked as EX.P1 to P8. The accused was questioned under Section 313 of Cr.PC. He denied his complicity in the crime and did not lead any defence evidence. 5. On hearing the arguments of both the side, the learned trial Court framed in all three points for consideration and answered point nos. 1 and 2 in the affirmative and point no.3 in the negative and ultimately, dismissed the complaint and acquitted the accused of the - 5 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 offence under Section 138 of NI Act. Being aggrieved by the findings on point nos. 1 and 2, the accused has not preferred any independent appeal, thereby, findings on point nos. 1 and 2 have attained finality. 6. I have heard the arguments of learned counsel for both the side and perused the records. 7. It is argued by the counsel for the complainant- appellant that, in view of the findings on point nos. 1 and 2, the only point that is to be decided in this appeal is, "whether accused had issued the cheque in discharge of legally enforceable debt." In support of his submission, he submits that, accused admits the issuance of cheque and his signature on the cheque. Further, he would submit that, when issuance of cheque and his signature is admitted, then the presumption comes into operation. When presumption is very much available in favour of complainant, he would submit that, the trial Court ought not have acquitted the accused. He would submit that, wrongly the trial Court has assumed that, there was no - 6 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 legally enforceable debt. In support of his submission, he relied upon certain additional documents produced along with a memo such as, loan application dated 2.6.2015, statement given by the respondent to the appellant while availing loan and loan ledger account in respect of loan account showing due date as 13.6.2025. He would submit that, the observations of the trial Court that there was no occasion for raising a loan by the accused is quite contrary to the documents so produced. 8. Placing reliance on judgment of Apex Court in Sunil Todi vs. State of Gujarath and others in Criminal Appeal No.1446/2021 disposed on 3.12.2021, he would submit that, the trial Court has committed illegality in acquitting the accused. 9. Per contra, the learned counsel for respondent - accused supported the reasons assigned by the trial Court in acquitting the accused. He would submit that, though point nos. 1 and 2 are answered in favour of the complainant, but, to prove that accused is liable to pay the - 7 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 cheque amount, no evidence is placed on record. There was no legally enforceable debt as rightly observed by the trial Court. Therefore, he would submit that, there is no merit in this appeal and is liable to be dismissed. 10. I have given my anxious consideration to the facts of the case and the arguments of both the side. As most of the factual features are discussed by the trial Court while answering point nos. 1 and 2, now the burden is on the complainant to prove that in discharge of legally recoverable debt, the accused has issued the impugned cheque dated 22.04.2018 for Rs.2,00,000/- drawn on Canara Bank, Tavarakere Branch, Hoskote. 11. Section 139 of the NI Act specifically provides `presumption' with regard to issuance of a cheque. But, it is a rebuttable presumption. Accused has not lead any oral evidence, but, cross-examined PW.1. Though the accused admits about availing of loan from the complainant-Society but, disputes about issuance of said impugned cheque in discharge of said loan amount so - 8 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 availed. Except the oral testimony of PW.1, no documentary evidence was produced before the trial Court to show that, really accused had committed default in repayment of the loan amount. PW.1, as rightly observed by the trial Court has deposed complete ignorance with regard to the amount due from the accused. For the first time, he has produced the loan application submitted on 02.06.2015. The accused has created mortgage by executing the mortgage deed now produced by the complainant. For the first time, complainant has produced the loan account stating that, as per the resolution dated 3.6.2015, loan of Rs.6 lakh was sanctioned and accused was granted 120 installments and the last due date is stated as 13.06.2025. It appears that, this document is prepared by complainant's Society to fill the lacunae. It is the defence of the accused that, when the loan was availed, signed blank cheques were taken by the Society and it was misused by the complainant. Even this loan ledger account is very much silent as to what was the amount due including interest till 13.6.2025. Just a copy is - 9 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 produced. The loan application shows that, the accused wanted a loan of Rs.18 lakhs but, loan of Rs.6 lakhs was sanctioned. No resolutions to that effect are produced. These bald documents never show that, really the accused was a defaulter in repayment of loan amount and in discharge of loan amount only; he had issued the impugned cheque. To attract the provisions of Section 138 of NI Act, the ingredients of Section 138 are to be fulfilled by the complainant i.e. the cheque was issued in discharge of the legally enforceable debt. It is the defence of the accused that, the signed cheque was misused and obtained as a security. Then, the burden lies on the complainant to prove that, the said cheque was issued in discharge of legally enforceable debt. Once this initial burden is discharged, then the onus lies on the accused. It has come in the evidence of PW.1 that the accused was due to pay Rs.24,800/- but, the complainant says that accused was due to pay Rs.5,25,000/-. When relevant documents with regard to the outstanding loan is not produced, so also issuance of the said cheque towards the - 10 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 same, I do not find any factual error committed by the trial Court in disbelieving the version of the complainant. By directing cross-examination to PW.1, that the Society had maintained the statement of account pertaining to accused loan account and the said entire loan ledger account is not produced before the trial Court. But, now it is produced along with a memo and it is not a complete loan ledger account of the accused. As rightly observed by the trial Court, the complainant society has not clarified that, what was the real loan amount which was sanctioned to the accused and to his family. The complainant-Society being a reputed society ought to have maintained the account in a proper manner which is being audited every year by the auditors of Government Department. Therefore, in view of the evidence brought on record, the presumption which is available to the complainant is rightly rebutted by the accused by cross-examining PW.1. When the accused rebuts the evidence of complainant, then heavy burden lies on the complainant to prove or - 11 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 substantiate his case by leading cogent and acceptable evidence. 12. Now the serious defects in the case of the complainant cannot be filled in by producing incomplete documents. Thus, there is no iota of evidence adduced by the complainant to prove the ingredients of offence under Section 138 of NI Act. 13. It is settled principle of law that, if a cheque is received by the complainant society pursuant to a financial transaction cannot be considered as worthless piece of paper under every circumstance but, security in its true sense is state of being safe and the security given for a loan is something given as a pledge of payment. It is not so in this case. Said impugned cheque has not ensured the complainant to make use of the same to recover the loan amount from the accused. Therefore, the trial Court is right in dismissing the complaint. I do not find any factual or legal error in the impugned judgment. Hence, there is - 12 - NC: 2025:KHC:15964 CRL.A No. 622 of 2023 no merit in this appeal and accordingly, it is liable to be dismissed. 14. Resultantly, I pass the following:
Decision
ORDER (i) Appeal is dismissed. (ii) Impugned judgment dated 01.09.2022 passed in CC No.25634/2018 by the XXVI Addl.Chief Metropolitan Magistrate, Bengaluru is hereby confirmed. Sd/- (RAMACHANDRA D. HUDDAR) JUDGE SK List No.: 2 Sl No.: 2