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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 28TH DAY OF MARCH, 2025
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL APPEAL NO.658/2013
BETWEEN:
MR. D.P. GUPTA S/O LATE G.S. GUPTA AGED ABOUT 60 YEARS NO.5 & 6, MILLA BUILDING N.R. ROAD, 2ND CROSS BANGALORE-560 002.
… APPELLANT
(BY SRI. SHIVAPRASAD E, ADVOCATE) AND:
SRI. PRADEEP RAI BANTRA RANGA NEAR DIVYA DIGITAL STUDIO VAMENJUR MANGALORE-575 004.
ALSO AT SRI. PRADEEP RAI LOBO COMPOUND, ANEGUDI, 4TH CROSS, BEJAI NEW ROAD MANGALORE-575 004.
… RESPONDENT
(BY SMT. ANANYA RAI, ADVOCATE)
THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED 30.04.2013 PASSED BY THE XV ACMM, BANGALORE IN
2 C.C.NO.10182/2009 FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTURMENTS ACT AND ETC.
THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 18.03.2025 THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE H.P.SANDESH
CAV JUDGMENT
This appeal is filed challenging the judgment dated 30.04.2013 passed in C.C.No.10182/2009 by the XV Additional Chief Metropolitan Magistrate, Bangalore City for the offence punishable under Section 138 of N.I. Act.
Heard the learned counsel appearing for the respective parties.
The factual matrix of the case of the complainant before the Trial Court that accused had availed a loan of Rs.4 lakh from the complainant promising to repay the same with 24% interest per annum within a year i.e., by the end of February 2009. The complainant further contends that he met the accused at Mangalore and demanded for repayment of the loan amount with interest and traveling expenses. The accused
3 had issued a Cheque for a sum of Rs.5 lakh falsely assuring that the Cheque will be honoured when presented for encashment towards repayment of the legally recoverable debt. It is also the case of the complainant that when the Cheque was presented for encashment, the same was dishonoured as funds insufficient vide memo dated 09.03.2009 and the complainant immediately contacted the accused for payment of the amount but the accused failed to repay the same. Hence, the complainant got issued the legal notice and the same was served on the accused and the accused gave untenable reply to the said notice. Hence, the complainant filed the complaint against the accused.
The Trial Court took the cognizance and secured the accused and the accused did not plead guilty and claims to be tried. In order to prove the case of the complainant, the complainant examined himself as PW1 and got marked the documents at Ex.P1 to P14. On the other hand, accused got examined himself as DW1 and got marked the documents at Ex.D1 to D5. The accused set up the defence that the Cheque was given towards purchase of furniture and there was no any
4 transaction between the complainant and himself and the defence of the accused was accepted by the Trial Court considering the document at Ex.D5 and acquitted him. Being aggrieved by the judgment of the Trial Court, the complainant filed the present appeal before this Court.
The main contention of the learned counsel for the appellant/complainant before this Court that the Trial Court committed an error in accepting the defence of the accused/respondent and reached a wrong conclusion that the appellant does not know the address of the respondent’s residence, his financial capacity for repayment and also the appellant/complainant was not aware of the phone number of the respondent and this approach of the Trial Court is erroneous. It is contend that the defence set out by the respondent in Ex.P8 is that the instrument was in his possession and the same is kept in his drawer and later, he came up with a new version that the instrument has been issued in favour of one M/s Somayaji Furniture towards the purchase of furniture worth of Rs.4,000/- on credit basis in his second reply at Ex.P13. The Trial Court
5 failed to appreciate that the defence of the respondent was not reliable and he was taking inconsistent stands which itself was sufficient to hold that the respondent has failed to rebut the presumption.
The counsel for the appellant also would vehemently contend that when specific defence was taken that accused failed to prove that any shop was existing in Mangalore as Somayaji Furniture by producing even a visiting card or the credit bill or any other document or examining any witness, the Trial Court failed to appreciate the same and the Trial Court also failed to appreciate that the alleged Latha Saneel named by the respondent is well known to the respondent and he was availing loans from her and issuing cheques to her but the respondent failed to examine the said Latha Saneel and even failed to give her address. The Trial Court relied on the imaginary and inconsistent allegations of the respondent which the respondent failed to establish. Thus, the reasoning given by the Trial Court is erroneous and failed to consider the evidence of PW1 and also the evidence of DW1 in a proper perspective.
The reason assigned by the Trial Court while acquitting the accused that the complainant does not know the family members and details were not given and phone number was not disclosed and erroneously relied upon the entry made in Ex.D5(a). The counsel contend that the document at Ex.D5 is a self styled document and created and same has been relied upon by the Trial Court. The counsel further contends that if really the Cheque was given to Latha Saneel, ought to have examined that Latha Saneel and even not produced any document for having purchase furniture for Somayaji Furniture and not proved the defence and first and second replies are contrary to each other and hence, ought not to have acquitted the accused.
Per contra, the learned counsel appearing for the respondent/accused would vehemently contend that specific reply was given in terms of Ex.P8 stating that earlier cheques and subsequent Cheques are given long back in the year 2002 itself and question of issuance of subject matter of Cheque in 2009 does not arise and the Trial Court also taken note of contradictions and probable case was set out by the accused by
7 producing the document at Ex.D5 and the same is not created as contended by the counsel for the appellant. The counsel also would vehemently contend that the appellant is an advocate and paid the cash and at that time, son was present but not examined the son. The counsel also would vehemently contend that the reason given by the appellant that he had returned the pronote and consideration receipt and what made him to return the same when the loan amount was not repaid. The counsel also would vehemently contend that the advocate cannot lend the money and do any lending business. The counsel also would vehemently contend that the complainant is a stranger to the accused and the same has been properly appreciated by the Trial Court while acquitting the accused in coming to the conclusion that the complainant has not proved his case. The Trial Court also taken note of the fact that without taking any security like promissory note or post dated Cheque, advancing a loan of Rs.4 lakh to the accused cannot be believed. The Trial Court also taken note of ignorance of complainant regarding occupation of the accused, residential address, financial capacity and repayment capacity and under such circumstances, advancing
8 the amount of Rs.4 lakh to the accused in the absence of all these. Though the complainant claims that at the time of advancing the loan, the accused executed on demand pronote and consideration receipt and explanation is given that on receipt of disputed Cheque, he has returned the promissory note and consideration receipt and the said defence cannot be accepted. Hence, this Court cannot find fault with the reasoning of the Trial Court and it does not require any interference of this Court.
Having heard the learned counsel appearing for the respective parties and also on perusal of the material on record and the grounds which have been urged by the counsel for the appellant in the appeal as well as during the course of the arguments and also the arguments of the learned counsel for the respondent, the points that would arise for the consideration of this Court are: 1. Whether the Trial Court committed an error in acquitting the accused in coming to the conclusion that the complainant has not proved
9 the loan transaction and whether it requires interference of this Court exercising the appellate jurisdiction? 2. What order?
Point No.1:
Having heard the learned counsel appearing for the respective parties, this Court has to first examine the contents of the complaint. In the complaint, the complainant stated that accused is known to the complainant and accused had availed a loan of Rs.4 lakh promising the complainant to repay the same with interest at 24% per annum within a period of one year. The complainant also contend that when accused did not repay the amount as agreed, he visited Mangalore and met the accused and demanded for repayment of the loan amount with interest and traveling expenses and accused had issued the Cheque dated 04.03.2009 with a pre-planned deceitful intention and the said Cheque was dishonoured. The evidence of PW1 in the affidavit that he reiterated the contents of the complaint by way of affidavit and got marked the documents. In the cross-
10 examination, he admits that he is an advocate by profession. He further admits that he met the accused 3 to 4 times and he was introduced by one B Raghavendra Rao and he is running a hotel at Nanjanagudu. It is also his evidence that he got introduced him 6 to 7 years back but cannot tell the date, month and year in which he had introduced but he claims that he introduced in Mangalore Circuit house. He also admits that when he was introduced, the said Raghavendra Rao was residing at Nanjanagudu. But accused was working at Samudra Sahakari Sangha as Manager at Mangalore but accused not shown any documents that he was working and he also not seen the same. He also admits that thereafter, he met the complainant in 2008 in his office at Bengalore. He admits that in between there is no transaction between them and he is not aware of anything about the family members and their avocation and where they were residing. But he says that once again he met him in the month of February at Mangalore and in between February 2008 and 2009, he had not met him. He also admits that he cannot tell where the accused was working in February 2008.
It is suggested that accused was not introduced by one Raghavendra Rao and the witness says that when he met the accused in his office, at that time, he demanded for Rs.4 lakh and he asked him to come after two days and he made the payment in the month of February 2008 in his office and at that time, his son was present and the amount was also paid by cash, for that, accused agreed to pay 24% interest. He is not a income tax assessee. But he claims that he is working at Mangalore in Bantaranga paper company and given details of his company and residential address but he has not seen any document with regard to his employment. But complainant made the payment as hand loan and at the time of availing the loan, accused had executed an on demand pronote and consideration receipt but the complainant has not produced the same since he claims that when Cheque was given, he had returned the same to the accused and for having return the same he had not taken any endorsement. PW1 further admits that his son is doing iron and steel business and his wife was doing the business of electronics at Bengalore in the name of Ganga Maruthi till 1992-93. He further admits that in connection
12 with the said business, he used to file several cases based on the power of attorney. PW1 says that on 25.02.2009, he went to the Mangalore to see the accused and he called the accused to Mangalore bus stand and spoken to him. The said Raghavendra Rao who got introduced the accused, passed away 6 to 7 years ago. He admits the issuance of reply notice and also he has issued re-joinder and also accused gave reply to the said notice. It is suggested that at no point of time, accused had availed a loan of Rs.4 lakh and even not paid any interest and not liable to pay any amount and the same was denied. It is suggested that subject matter of Cheque was given to Somayaji Furniture, Mangalore as security and the same was misused and the amount was paid to the Latha Saneel and demanded to return the Cheque but the Latha Saneel told him that Cheque was misplaced and going to return the same. It is suggested that in collusion with the said Latha Saneel, the present case is filed and the same was denied. However, admits that the contents of the Cheque and signature are in different ink.
13 12. On the other hand, the accused also examined himself as DW1 and denied that at no point of time, he had received the amount of Rs.4 lakh from the complainant and the subject matter of the Cheque was given to Latha Saneel for purchase of furniture and amount was paid but Cheque was not returned and promised to return the same when the same is traced. Inspite of repeated demand also did not return the same and the said furniture shop was also closed and only when the notice was issued, he came to know about both the complainant and the said Latha Saneel misused the said Cheque and got marked the document at Ex.D1 to D5. This witness was subjected to cross-examination and in the cross-examination, witness admits that he did B.Com and he is running a paper business in the name of Bantara Samaja and he himself is a owner and editor and running the same from last 6 to 7 years and prior to that he was working in other Bantara Sangha paper. He also admits that prior to that he was working at Samudra Sahakari Sangha as a Manager. The document was confronted to the witness that Samudra Sahakari Sangha had filed a case against him in C.C.No.160/2005 and judgment was passed in
14 terms of Ex.P14 and the said case also in respect of bouncing of Cheque. He admits that he cannot tell in which year, he had purchased the furniture from Somayaji Furniture but claims that it was in the year 2002. He also admits that he cannot produce the bill for having purchased the same and delivery challen but says that he had purchased the same on credit basis and he also not given any advance, but he had given the Cheque and for having given the Cheque, there is no receipt and acknowledgement in this regard.
It is suggested that no said furniture were purchased and amount was paid and the said suggestion was denied. It is suggested that in 2002, no such Somayaji Furniture was in existence and same was in existence in front of Nazarath Convent, Balmat Road, Mangalore. He claims that within one month, he will repay the amount and for having paid the amount, he lost the receipt. He also admits that he cannot produce any document to show that in the said Somayaji Furniture, the Latha Saneel was working. He admits that he can get the address of Latha Saneel and except the said Cheque, no
15 other Cheque was given to Latha Saneel, but may be given 4 to 5 cheques to Latha Saneel in connection with other transaction and also may be given 4 to 5 cheques as security and cannot tell whether those cheques are honoured or dishonoured and also cannot tell for which back, those cheques pertains to which given to the Latha Saneel.
This witness was also further cross-examined wherein he admits in terms of Ex.P14 that he had given three cheques in favour of Samudra Sahakari Sangha and those cheques are also not in continuity and also no reference in Ex.D5 Cheque number 515318 to 525322 and so also in respect of Cheque No.525323 and also no reference of Cheque 525304, but signature found in Ex.P13 belongs to him. He admits that in Ex.P13, in four places, there are amendment and the same was made by the advocate and written as ‘Furniture’ and he himself given instructions to make such amendment and it was blank and having received the instructions, got amended the same. In Ex.D3 also signature belongs to him and admits that Ex.P13 where amendment was made it is mentioned as Somayaji
16 Electronics and the same was amended as Furniture. He admits signature found in Ex.P8 and he admits that in Ex.P8, it is mentioned that the said Cheque was in his possession in his office. In Ex.P13 with an intention to give false evidence, corrections are made and the same was denied. He admits that for having issued the Cheque in favour of Somayaji Furniture or Electronics, he is not having any document. For having repaid the amount to Latha Saneel, when she replied that Cheque was lost, not given any instructions to the bank not to encash the same and even inspite of receipt of notice, not given any notice to Latha Saneel for having misused the Cheque and even not given any complaint against Latha Saneel and also not given any complaint against the complainant. It is also elicited in the cross- examination that in Ex.P5(a), Cheque No.525311, there was a reference of giving the same to Somayaji Electronics but not in the name of Somayaji Furniture.
Having considered both oral and documentary evidence placed on record of the complainant and the accused, it is not in dispute that Cheque pertains to accused. It is the case
17 of the complainant that amount was lent to the accused and accused also got introduced by one Raghavendra Rao. It is the specific case of the complainant that at the time of advancing the loan, accused was working at Samudra Sahakari Sangha and the accused also admits in the cross-examination that earlier, he was working in the very same society. It is also important to note that in reply notice, which is marked as Ex.P8, at the first instance, denied the very transaction contending that instrument is a bogus instrument and client has not issued the same and client also not known to the accused and there was no any dealings and no hand loan was taken and met the complainant at any point. It is admitted that client opened the saving bank account in ICICI bank and Cheque book was issued and the Cheque leaves 525310 and 525312 which are the previous Cheque and subsequent Cheque was issued way back in the year 2002 and there was no question of issuing the subject matter of Cheque on 04.03.2009 and contend that this itself shows the illegal claim of the complainant and accused has not operated the said account since 2005 and there was a debit balance and the said Cheque was not issued by his client but in the second
18 reply notice, after the issuance of re-joinder by the complainant, defence was set up that the accused traced his counterfoil of the Cheque book along with his old records wherein all the entries relating to the cheques issued by him are written on the last page. The Cheque in question was delivered on 12.07.2002 to Somayaji Furniture for the purchase of a small furniture piece of around Rs.4,000/- and a blank Cheque was issued by the accused and there was a person by name Latha Saneel who was working for Somayaji Furniture in 2002 who also had fixed deposits invested in Samudra V.S.S. Limited in 2002 wherein accused was the then Branch Manager. The fixed deposit invested by Latha Saneel was not paid back on maturity and hence, she used to insist that accused to pay the same and in that connection, Cheque was issued.
Once the Cheque was admitted and defence was taken by the accused and the very specific case of the accused that he had purchased the furniture and issued the Cheque and when the specific defence was taken that Cheque was issued in favour of Somayaji Electronics and not in respect of Somayaji
19 Furniture, accused ought to have examined Latha Saneel to prove the said defence but not done the same.
It is the specific case of the complainant that accused was introduced by one Raghavendra Rao but the complainant categorically deposes that the said Raghavendra Rao passed away 6 to 7 years ago hence, the question of examination of the said Raghavendra Rao does not arise. But no doubt, PW1 admits that he could not give any details of family of the accused and also phone number but categorically says that phone number was saved but could not tell the same and also categorically says that accused was working at Samudra Sahakari Sangha as a Manager but no such documents were produced in this regard but evidence of DW1 itself is clear that earlier, he was working in the said society. It is important to note that it is the case of the complainant that pronote and consideration receipt was executed at the time of availing the loan and the same were returned when the Cheque was issued and no receipt is produced for having returned the same. It is also important to note that when the complainant denied the
20 very existence of Somayaji Furniture, accused not placed any document to show the existence of Somayaji Furniture and also not examined the said Latha Saneel who said to be working in the said Somayaji Furniture and no such defence was taken at the first instance while issuing reply in terms of Ex.P8 except stating that the subject matter of Cheque could not be issued in 2009. On the other hand, if really other cheques were issued and transacted earlier to that, the accused has not placed any document except relying upon Ex.D5(a) wherein a self styled entry made in the said document.
It is also important to note that for having purchase the furniture from Somayaji Furniture also no document is placed before the Court. It is also important to note that in the cross-examination of DW1, he categorically admits for having paid the amount to Somayaji Furniture but not produced the receipt in this regard but says that receipt was lost. It is also important to note that in the cross-examination of DW1, answers are elicited that Cheque numbers are not in continuity and there was no reference in the Cheque book. It is important to note
21 that DW1 categorically admitted that the society, in which he was working also, filed a case against him and hence, the Court has to take note of the conduct of the accused also. The accused had categorically admits that there are corrections and amendments in Ex.P13 and the same was created by the advocate that is in the second reply notice it is mentioned as Somayaji Furniture, but it is mentioned as Somayaji Electronics.
It is also important to note that DW1 categorically admits that there is no any document for having given the Cheque to Somayaji Furniture or Electronics and even when the Latha Saneel informed that Cheque was lost, the accused not given any instructions to the bank stating that not to encash the same. It is specific case of the accused that in collusion of the complainant and Latha Saneel, the present case is filed. It is also important to note that when the notice was issued to the accused, he has not given any notice to Latha Saneel but claims that shop was closed and hence, could not give notice. And accused even not given any complaint against the said Latha Saneel for having misused the Cheque and even as against the
22 complainant also. Except relying upon Ex.D5, nothing is placed on record about the transaction, in which year, the other cheques are honoured and dishonoured and even the document of for having purchased the furniture also not placed before the Court and even for having repaid the amount also, no receipt is produced except stating that receipt was lost. No doubt, the complainant-PW1 admits in the cross-examination that he was not having the details of the family of the accused and phone number and the same cannot be a ground to disbelieve the case of the complainant when the Cheque was in the custody of the complainant. No doubt, PW1 admits that he was not an income tax assessee.
The very case of the complainant that he advanced the amount in the year 2008 for a period of one year and when he met the accused in the year 2009, the subject matter of the Cheque was issued by the accused. It has to be noted that the Trial Court given the reason that what made the complainant to return the pronote and consideration receipt, but no explanation for the same. But PW1 categorically says that when the Cheque
23 was given, he had returned the pronote and consideration receipt. When such answer was given and when the Cheque was in the custody of the complainant, burden shifts on the accused to prove the same. But the Trial Court committed an error in coming to the conclusion that the case of the accused is probable than the case of the complainant. The accused has to rebut the same and mere taking of defence that Cheque was given in favour of Somayaji Furniture cannot be a ground to acquit the accused when no cogent evidence is not placed for having transacted with Somayaji Furniture and given the Cheque and accused ought to have examined Latha Saneel but not examined her. When contra defence was taken in Ex.P8 and P13, the Trial Court ought not to have accepted the case of the accused in the absence of cogent evidence with regard to probablising the case that Cheque was given only in favour of Somayaji Furniture. In the absence of having purchased the furniture on credit basis and repayment and any receipt for having repayment and the theory of misusing of Cheque by the complainant and Latha Saneel also has not been proved. Hence, the Trial Court committed an error and ought to have been drawn the
24 presumption in favour of the complainant under Section 138 of N.I. Act unless the same is rebutted and no preponderance of probabilities in favour of the accused inspite of the Trial Court committed an error in acquitting the accused. Hence, it requires interference of this Court. Accordingly, I answer the above point as affirmative. Point No.2 21. In view of the discussions made above, I pass the following: ORDER The appeal is allowed. The impugned order dated 30.04.2013 passed in C.C.No.10182/2009 by the XV Additional Chief Metropolitan Magistrate, Bangalore City is set aside. Consequently, the accused/respondent is convicted for the offence punishable under Section 138 of N.I. Act and directed the accused to pay the amount of Rs.5,00,000/- within two months, in default, he shall undergo sentence of simple imprisonment for a period of six months.
25 Out of Rs.5,00,000/-, ordered to pay a sum of Rs.4,90,000/- to the complainant and remaining amount of Rs.10,000/- is ordered to vest with the State.
Sd/- (H.P. SANDESH) JUDGE