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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF JUNE, 2024 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO. 302 OF 2014 BETWEEN:
SRI.K.M.NAGARAJU, S/O MASAIAH, AGED ABOUT 39 YEARS, NO.1, 2ND CROSS, CHOWDAPPA LAYOUT, HENNUR VILLAGE, BANGALORE-560043. …APPELLANT (BY SRI. G M ANANDA., ADVOCATE) AND:
SRI.N.SUBRAMANYAM S/O.LATE NADAMANDAM, AGED ABOUT YEARS, NO.27, GOLLARA QUARTERS, 1ST MAIN, 3RD CROSS, VYALIKAVAL, BANGALORE-560003. …RESPONDENT (BY SRI. BATHE GOWDA K.V., ADVOCATE)
THIS CRL.A. IS FILED U/S. 378 CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:15.03.2014 PASSED BY THE V ADDL. SMALL CAUSES JUDGE AND XXIV ACMM, BANGALORE IN C.C.NO.27435/11 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT.
THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
JUDGMENT
This appeal is filed by the appellant –complainant praying to set aside the judgment of acquittal dated 15.03.2014 passed in C.C.No.27435/2011 by the V Additional Small Causes Judge and 24th Additional Chief Metropolitan Magistrate Court of Small Causes, Mayohall Unit, Bengaluru wherein the respondent-accused has been acquitted for offence punishable under Section 138 of the Negotiable Instruments Act (herein after referred to as “N.I. Act” for brevity).
It is the case of the appellant –complainant that, respondent-accused was his friend and during December-2009, respondent –accused approached him and requested hand loan of Rs.10,50,000/- to meet his urgent requirement agreeing to repay the same within few months. As per the said request of the respondent – accused, appellant –complainant paid hand loan Rs.10,50,000/- by way of cash and cheques on various dates. The respondent –accused has also executed an `On Demand Promissory Note’ in favour of the appellant –
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complainant as a collateral security acknowledging the receipt of loan amount. As the respondent –accused did not repay the amount borrowed, the appellant – complainant insisted him to repay the loan amount and accordingly, the respondent –accused has issued a cheque for sum of Rs.10,50,000/- dated 03.03.2011 infavour of the appellant –complainant. When the appellant – complainant represented the same for encashment through his bankers, cheque was dishonoured with endorsement “Funds Insufficient” on 04.03.2011. The appellant –complainant issued legal notice dated 14.03.2011 by RPAD and also by certificate of posting. The notice issued through RPAD returned with an endorsement as “Not Claimed” and notice issued under certificate posting has been served on the respondent – accused. As respondent –accused did not pay the cheque amount inspite of service of notice, the appellant – complainant initiated proceedings against respondent – accused for offence punishable under Section 138 of N.I. Act.
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
In order to prove the case, the appellant – complainant has examined himself as P.W.1 and marked documents as Ex.P1 to Ex.P8. The respondent –accused has been examined as D.W.1 and no documents were marked on his side. The trial Court after hearing the arguments on both sides and appreciating evidence on record, acquitted the respondent –accused for offence punishable under Section 138 of N.I. Act by the impugned judgment, which is challenged in this appeal.
Heard learned counsel for the appellant – complainant and learned counsel for the respondent – accused.
Learned counsel for the appellant –complainant would contend that the appellant –complainant had lent a sum Rs.10,50,000/- to the respondent –accused out of which he paid Rs.8,50,000/- by cash and Rs.2,00,000/- by cheque and there is an entry to that effect in the pass book dated 23.12.2009 which is at Ex.P8. He submits that for having received said amount the respondent has executed consideration receipt and On Demand Promissory
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
Note as per Ex.P3 and it is on 23.12.2009. The respondent –accused, for repayment of the loan amount borrowed from the appellant –complainant, had issued a cheque - Ex.P1 and same came to be dishonoured with an endorsement “Funds Insufficient”. As respondent – accused has admitted his signature on Ex.P1-cheque, a presumption under Section 139 of N.I. Act is to be drawn. The respondent –accused has not rebutted the said presumption. The defence of respondent that the amount of Rs.2,00,000/- is paid towards plumbing works and he has issued a cheque for security of the said amount has not been established. He placed reliance on the decision of the Hon’ble Apex Court in the case of Rohitbhai Jivanlal Patel Vs. State of Gujarath and Anr1 and in the case of the M/s Shree Daneshwari Traders Vs Sanjay Jain and Another2. He contends that the appellant –complainant had source of cash which he had paid to the respondent –accused and merely
1 In Crl.A.No.508/2019 decided on 15.03.2019 2 In Crl.A.No.61-62/2011 decided on 21.08.2019
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
because he has not produced his income tax returns is not a ground for disbelieving his case. He further submits that it is also not necessary to examine the witnesses to the On Demand Promissory Note as the respondent –accused has admitted his signature on the cheque-Ex.P1. Without considering all these aspects, the learned Magistrate erroneously acquitted the respondent –accused for offence punishable under Section 138 of the N.I Act. With this, he prayed to allow the appeal and convict the respondent – accused for offence punishable under Section 138 of the N.I. Act.
Learned counsel for the respondent –accused has argued that the case put forth by the appellant – complainant in his complaint, evidence, notice and documents is different. He submits that according to the complaint two witnesses were present at the time of lending money and those witnesses have not been examined. He submits that how much money the appellant – complainant paid by cash and how much money was paid through cheque has not been stated in
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
the averments of the complaint and legal notice Ex.P4. The appellant –complainant has admitted that he is an income tax assessee and he has not produced his income tax returns to establish that he has capacity to lend money of Rs.10,50,000/- to the respondent –accused. He submits that considering all these aspects the learned Magistrate has rightly acquitted the respondent –accused for offence punishable under Section 138 of the N.I Act. With this, he prayed for dismissal of the appeal.
Having heard learned counsels for the parties and perusing records the point that arises for my consideration is:
“Whether the learned Magistrate was right in acquitting the respondent – accused by holding that the appellant – complainant has failed to prove that respondent had legally enforceable debt and cheque has been issued for discharge of the said debt?”
My answer to the above point is in negative for the following reasons:
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
The respondent –accused who has been examined as D.W.1 in his cross examination has admitted his signature on cheque –Ex.P1. As respondent –accused has admitted his signature on cheque-Ex.P1, the presumption has to be drawn under Section 139 of N.I. Act. It is the defence of the respondent –accused that the appellant –complainant had no financial capacity to lend money of Rs.10,50,000/-. It is stated in the evidence of P.W.1 that the said amount of Rs.10,50,000/- has been given to the respondent – accused through cheque and also by cash. Ex.P8 is the pass book of bank account of appellant –complainant wherein entry dated 23.12.2009, which is marked as Ex.P8(a), indicates that a sum of Rs.2,00,000/- was paid to respondent –accused by cheque No.88549. Said entry itself establish that a sum of Rs.2,00,000/- has been paid by the appellant –complainant to the respondent –accused on the date on which he had borrowed i.e. on 23.12.2009. The entry in the pass book -Ex.P8 dated 30.11.2009 indicate that appellant –complainant has withdrawn cash of Rs.4,00,000/-. Entry dated 05.12.2009 indicate that
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
appellant has withdrawn cash of Rs.3,00,000/- and entry dated 12.12.2009 also indicate that appellant has withdrawn cash of Rs.4,00,000/- from his bank account. The said three withdrawals are within one month prior to the date of borrowing i.e. 23.12.2009. Considering the said aspect, appellant –complainant had cash of Rs.4,00,000/- +3,00,000/- +4,00,000/- amounting Rs.11,00,000/- in his hand during the relevant month i.e. December-2009. The date of borrowing of hand loan by the respondent –accused from the appellant –complainant is on 23.12.2009 and as on that date, appellant – complainant had cash to lend money of Rs.8,50,000/- to the respondent –accused. The entry at Ex.P8(a) and entries regarding withdrawals of cash indicate the capacity of the appellant –complainant to lend cash of Rs.8,50,000/- and Rs.2,00,000/- by cheque. Therefore, contention of the learned counsel for respondent –accused that the appellant had no financial capacity to lend such huge amount has no substance.
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
It is the defence of the respondent –accused that he was a plumber and he did plumbing work entrusted by the appellant –complainant for which he had been paid a sum of Rs.2,00,000/- through cheque on 23.12.2009 and Rs.90,000/- by cash on 25.12.2009. As per cross examination of D.W.1 one house requires a sum of Rs.20,000/- for plumbing work constructed in 30 X 40 ft site. What are the plumbing works done by respondent – accused and in which houses has not been put forth in his defence. As stated by D.W.1, if a sum of Rs.20,000/- is to be taken into consideration as expenses of plumbing work for one house, then he should have done plumbing work at atleast 14-15 houses. The details of the said houses have not been put forth by the respondent –accused. The above contention of the respondent –accused that he has given cheque –Ex.P1 as security for plumbing work entrusted by the appellant –complainant to the respondent –accused has not been established.
The respondent –accused inspite of service of notice –Ex.P4 has not chosen to send any reply putting
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forth his defence. Said Ex.P4 was sent through RPAD and also was sent through certificate of posting. Notice sent through RPAD has been returned with endorsement “not claimed” and cover is at EX.P7. Certificate posting Ex.P4 indicate that the letter was sent to the respondent – accused on 14.03.2011. The respondent –accused who has been examined as D.W.1 in his cross examination has admitted his address as stated in Ex.P4- legal notice and complaint. As the address of the respondent –accused as stated in Ex.P4 is admitted, notice issued to the said address under certificate of posting has been served. Inspite of service of notice he has not chosen to give reply to the notice. For the said contention of the respondent – accused that cheque –Ex.P1 given as security has been misused by the appellant –complainant, no action has been taken by the respondent –accused nor any notice regarding that has been issued. Apart from that, On Demand Promissory Note and consideration receipt Ex.P3 indicate that the respondent –accused has received a sum of Rs.10,50,000/- from the appellant –complainant and
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NC: 2024:KHC:22615 CRL.A No. 302 of 2014
executed On Demand Promissory Note to the appellant – complainant for the said amount. As the presumption raised under Section 139 of N.I. Act is not rebutted by the respondent –accused, there is no necessity to appellant – complainant to examine the witnesses who were present at the time of lending the money and whose names and signatures are found in Ex.P3-consideration receipt. Without considering all these aspects, learned Magistrate has erred in acquitting the respondent –accused for offence punishable under Section 139 of N.I Act.
The appellant –complainant has established that cheque-Ex.P1 has been issued for making payment of legally enforceable debt and same has been dishonoured “for want of funds”. Inspite of demand notice the respondent –accused has not paid cheque amount. Therefore, he has committed offence punishable under Section 138 of N.I.Act.
In view of the above, the following ORDER i) The appeal is allowed.
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ii) The impugned judgment of acquittal dated 15.03.2014 passed in C.C.No.27435/2011 by the V Additional Small Causes Judge and 24th Additional Chief Metropolitan Magistrate Court of Small Causes, Mayohall is set aside. iii) The respondent –accused is convicted for offence punishable under Section 138 of the N.I Act and respondent –accused is sentenced to pay fine of Rs.10,60,000/- and in default to undergo simple imprisonment for a period of one year. Out of the said fine amount a sum of Rs.10,50,000/- is ordered to be paid as compensation to the appellant –complainant.
Sd/- JUDGE
DSP List No.: 1 Sl No.: 19