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NC: 2025:KHC:17142 CRL.A No. 56 of 2020
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE H.P.SANDESH CRIMINAL APPEAL NO.56 OF 2020 BETWEEN: 1. SRI. SONNAPPA, S/O LATE MUNINANJAPPA @ APPAIAH, AGED ABOUT 74 YEARS, R/AT RAMAGONDANAHALLI VILLAGE, YELAHANKA HOBLI, BENGALURU NORTH TALUK, BENGALURU RURAL DISTRICT-560 064. …APPELLANT
(BY SRI. NANJUNDA SWAMY N., ADVOCATE)
AND:
SRI. C. SONNEGOWDA, S/O CHOWAIAH, AGED ABOUT 57 YEARS, R/AT NO.24, 1ST CROSS, MUNIYAPPA GARDEN, KEB EXTENSION, BENGALURU-560 094. …RESPONDENT
(BY SRI. M. BABU, ADVOCATE - ABSENT)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER OF ACQUITTAL DATED 05.11.2019 PASSED BY THE XVIII ADDITIONAL CHIEF METROPOLITAN MAGISTRATE BENGALURU
IN C.C.NO.9248/2013 ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT.
Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA
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THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
ORAL JUDGMENT
Heard the learned counsel for the appellant. The learned counsel for the respondent is absent. This Court made it clear in the previous occasion that if the learned counsel for the respondent does not appear on the next date of hearing, the matter will be heard in his absence. Hence, heard the matter in the absence of the learned counsel for the respondent. 2. The factual matrix of the case of the complainant is that the complainant has been cultivating the land measuring 1 acre 35 guntas in Survey No.41 situated at Ramagondanahalli, Yelahanka Hobli, Bangalore, North Taluk. The complainant has filed Form No.7 against one Thimmakrishna Rao, the original owner of the above said land before the Land Tribunal, Bangalore. The accused had agreed to purchase the property for a total consideration of Rs.90 lakhs. On 08.03.2011, the accused had entered into an agreement of sale with the complainant and the accused has paid Rs.10 lakhs to the complainant through cheque and also
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complainant's wife Smt. Narayanamma towards part sale consideration amount. The accused has agreed to pay balance sale consideration amount to the complainant. On 18.09.2010, the accused also entered into an agreement of sale with Gopal Rao, S/o Thimmakrishna Rao, the original owner of the above said land. The accused has agreed to purchase the said land along with the other portions of the land. In the sale agreement dated 08.03.2011, one of the conditions is that the complainant has agreed to set right the revenue interest on his own in respect of the above said property and facilities for the convey of the said land within 11 months after its denotification from BDA by receiving the balance sale consideration. The complainant and the accused have mutually agreed certain terms and conditions and entered into a supplementary sale agreement dated 23.04.2012 and on that day, the accused has paid Rs.40 lakhs to the complainant as advance towards the sale price by way of demand draft and on the same day, the accused has also issued cheque dated 10.10.2012 bearing No.372653 for Rs.37 lakhs drawn on Bank of India, Sanjay Nagar Branch, Bengaluru and the complainant also agreed the supplementary agreement has to be withdrawn his claim
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against the original owner by filing memo in said LRF No.751/1974-75. 3. The complainant further submits that on 21.05.2012, with an intention to engage accused side lawyer on behalf of the complainant, the accused has taken no objection vakalath from the lawyer of the complainant who was appearing in LRF and the complainant also informed the accused about presentation of the said cheque and the accused assured to honor the cheque. When the complainant presented the cheque for encashment, it was dishonored with an endorsement “insufficient funds” on 12.10.2012. Thereafter, the complainant issued legal notice on 08.11.2012 calling upon the accused to make payment of the dishonored cheque amount and the said notice was duly served on the accused. Inspite of service of notice, the accused has not complied the same. Hence, the complainant was constrained to file the private complaint. The Trial Court taken the cognizance and secured the accused and the accused did not plead guilty and hence the complainant examined himself as P.W.1 and got marked the documents at Exs.P.1 to P12. The accused was subjected to 313 statement and also examined himself as D.W.1 and examined one witness as D.W.2 and the
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documents are marked as Exs.D.1 and 2. The Trial Court having considered both oral and documentary evidence placed on record, extracted the evidence of P.W.1 and D.W.1 in the judgment and comes to the conclusion that the complainant has not proved his case taking into note the endorsement made in the document of Ex.D.1 that amount of Rs.37 lakhs was repaid and agreed to return the cheque, but the same was not returned. The theory of the defence of the accused was accepted and disbelieved the case of the complainant and dismissed the complaint. Hence, the present appeal is filed before this Court.
The learned counsel for the appellant would vehemently contend that the Trial Court proceeded to pass an erroneous order. The learned counsel contend that the transactions which have been taken place between the complainant and the accused is through cheque and DD and at no point of time, cash transaction was taken place between them. The learned counsel contend that when the cheque is placed before the Court, ought to have invoked Section 139 of the Negotiable Instruments Act (‘NI Act’ for short) and instead of that the Trial Court committed an error in coming to the conclusion that there is an endorsement in the document of
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Ex.D1 for having returned the money. It is the very case of the complainant that the shara was inserted for having made the balance payment of Rs.3 lakhs earlier, that too in the name of the wife of the complainant. The learned counsel brought to the notice of this Court that Ex.P.8 is clear with regard to the endorsement made in the pencil and the same has been erased and an insertion was made in Ex.D.1 for having repaid the amount. When the transaction was taken place by way of DD and cheque, the question of repayment by way of cash does not arise. The learned counsel contend that D.W.1 admits in the cross-examination that the payment of Rs.37 lakhs was disclosed in the income tax returns, but not placed any document for having declared the same. The learned counsel submits that the defence that huge amount of Rs.37 lakhs was paid was taken, but nothing is placed on record to show that he was having money and withdrew the money from the bank and made the payment. 5. The learned counsel contend that the signature was not confronted to P.W.1 during his cross-examination regarding endorsement is concerned and even with regard to the shara also no suggestion was made to P.W.1 for having made the payment of Rs.37 lakhs. The learned counsel
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contend that the Trial Court failed to take note of all these facts into consideration. The learned counsel contend that the document of Ex.D1 is placed before the Court i.e., earlier first agreement and the fact that supplementary sale agreement came into existence on 23.04.2012 is not in dispute. The learned counsel contend that if really the accused had made the payment of Rs.37 lakhs, there would have been shara in the subsequent document of Ex.P.9 and Ex.D.2 dated 23.04.2012 and instead of that, shara was inserted in the earlier agreement of Ex.D1 and there is no explanation on the part of the accused in respect of endorsement found in Ex.P8 for having paid the amount. The learned counsel submits that if the amount of Rs.37 lakhs was paid, there is no endorsement for having made the payment of Rs.3 lakhs subsequent to the document of Ex.D1 and Ex.P8. In terms of the agreement Ex.D1 and Ex.P8, it is clearly mentioned that an amount of Rs.10 lakhs was paid out of Rs.90 lakhs and there is no document with regard to the payment of additional amount. There is no dispute for having made the payment of Rs.3 lakhs by the accused and the complainant also not disputes for having received the amount. When such material is available on record, the Trial Court ought not to have
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acquitted the accused and hence it requires interference of this Court. 6. Having heard the learned counsel for the appellant and on perusal of the material available on record, the points that arise for the consideration of this Court are: (i) Whether the Trial Court committed an error in coming to the conclusion that re-payment of Rs.37 lakhs was paid by way of cash in favour of the complainant and whether it requires interference of this Court by exercising the appellate jurisdiction?
(ii) What order?
Point No.(i):
Having heard the learned counsel for the appellant and also on perusal of the material available on record, there is no dispute with regard to the very documents of Exs.P.8 and 9 and also the corresponding original documents of Exs.D.1 and 2. It is also not in dispute that there was a sale agreement for Rs.90 lakhs and having perused the documents of Ex.D.1 and Ex.P.8, it is clear that an amount of Rs.10 lakhs was paid and time was fixed for 11 months for remaining payment and execution of the sale deed. The learned counsel for the appellant brought to the notice of this Court the
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document Ex.P.8, wherein also there is a clear endorsement with regard to having made the payment of Rs.3 lakhs subsequent to the agreement dated 08.03.2011. It is rightly pointed out by the learned counsel for the appellant that there is no endorsement in Ex.D.1 for having paid an amount of Rs.3 lakhs and also the same was not disputed by the accused for having made the payment of Rs.3 lakhs as additional amount. It is the specific case of the appellant that the shara which is mentioned in Ex.D.1 having repaid the amount of Rs.37 lakhs, is an insertion having erased the earlier endorsement as mentioned in the Ex.P.8. It is important to note that the record clearly discloses that the payment was made by way of DD and cheque only and in the supplementary agreement, which came into existence, wherein payment of Rs.40 lakhs was paid, the same is also by way of DD. When such payments are made i.e., earlier Rs.10 lakhs as well as Rs.2 lakhs subsequently and also Rs.40 lakhs by way of DD, what made the accused to make the payment of Rs.37 lakhs by way of cash, no explanation.
It is also brought to the notice of this Court that D.W.1 categorically admitted for having made the payment of Rs.37 lakhs and the same was declared in income tax returns,
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but he did not place any record before the Court for having made the payment of Rs.37 lakh and the same was declared in income tax returns. Apart from that, though he claims that he made the payment of Rs.37 lakhs by drawing the money from the bank, no document is placed for having drawn the money from the bank. He also categorically admits in the cross-examination that when the payment was made, the complainant agreed to return the cheque and the same was not returned. He categorically admits that he has not given any notice to the complainant to return the cheque, but only says that he demanded to return the same. He has not given any complaint to the police and not taken any action in respect of non-return of the said cheque for a huge amount of Rs.37 lakhs.
No, doubt, the accused relied upon the evidence of D.W.2. According to him, D.W.2 was very much present at the time of repayment of the amount. In the cross- examination, he admits that he was doing the work of the accused and he got registered the property to the extent of 15 acres in favour of the accused, his wife and also his son and he was also one of the witness to the sale deed as well as agreement. Hence, it is clear that he is having acquaintance
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with the accused. D.W.2 admits that he used to get the commission when the transaction was taken place. He says that there may be an agreement between the accused and the complainant in respect of Sy.No.58/3 to an extent of 1 acre in the year 2008-2011. He says that in respect of the said transaction, the accused gave an amount of Rs.10 lakhs and Rs.2 lakhs by way of cheque and he had seen that agreement. Hence, it is clear that he used to make the document whenever the transaction was taken place. He also categorically admits that when the transaction was taken place between the accused and the complainant, second agreement also came into existence. The payment was made by way of DD i.e., Rs.40 lakhs and Rs.13 lakhs by way of cheque. When such admission is given by D.W.2 that payments are made by way of cheque and DD, what made the accused to make the payment by way of cash, no explanation was given. He says that the amount was repaid on 20.11.2022, but he does not remember the day. He says that when the payment of Rs.37 lakhs was made, he himself, accused, complainant, one Anjanappa and 6 to 7 persons were there and no other persons were there. He says that the amount was repaid in the denomination of Rs.500/- and
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Rs.1,000/-, but he cannot tell how many bundles were counted and given to the complainant.
Having taken note of the evidence of D.W.2, it is clear that he was having acquaintance with the accused and he was doing documentation on behalf of the accused and also he used to get commission from him. When such being the case, the evidence of D.W.2 cannot be accepted that the accused made the huge payment of Rs.37 lakhs by way of cash to the complainant when the transaction was taken place between them by way of DD and cheque. Though it was admitted by the accused that it was disclosed in the income tax returns, the same was not placed before the Court for having drawn the huge amount of Rs.37 lakhs. When such material is available on record and when the cheque is produced before the Court and the same is not disputed, the Trial Court ought not to have accepted the theory of repayment of Rs.37 lakhs by way of cash in the absence of cogent evidence.
It is important to note that when the notice was issued by the complainant, no reply was given by the accused. If really such repayment was made, he would have
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given the reply immediately and all these facts were not taken note of by the Trial Court. The learned counsel for the appellant would vehemently contend that when there are two documents, agreement as well as supplementary document, if any such repayment was made subsequent to the supplementary document, there would have been an endorsement in the subsequent document Ex.D.2 and not on Ex.D.1, which came into existence at the first instance. It is also the case of the complainant that the endorsement made in Ex.P.8 was erased and new endorsement for having repaid the amount was inserted. Hence, there is a force in the contention of the learned counsel for the appellant that there should have been endorsement on the supplementary document, which came into existence subsequently and not in the earlier document. Hence, the very reasoning given by the Trial Court that there is an endorsement for having made the repayment, is an erroneous approach unless cogent evidence is placed before the Court. It is important to note that no action was taken by the accused when the cheque was not returned and no complaint was given and even no notice was issued to return the cheque and the Trial Court committed an error in not taking note of these facts into consideration.
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Hence, it is a fit case to reverse the finding of the Trial Court. Hence, I answer the point in the affirmative. Point No.(ii): 12. In view of the discussions made above, I pass the following: ORDER. (i) The appeal is allowed.
(ii) The impugned judgment of acquittal dated 05.11.2019 passed in C.C.No.9248/2013, is set aside.
(iii) The accused is convicted for the offence punishable under Section 138 of the N.I. Act.
(iv) The accused is directed to pay the fine amount of Rs.40 lakhs within two months from today.
(v) If the accused fails to make the payment of Rs.40 lakhs within two months from today, he shall undergo imprisonment for a period of one year. On deposit of Rs.40 lakhs, the Trial Court is directed to make the payment of Rs.39,75,000/- to the complainant and the remaining amount of Rs.25,000/- is defrayed to the State.
Sd/- (H.P.SANDESH) JUDGE MD List No.: 1 Sl No.: 61