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CRL.A.No.544 of 2013
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 7TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE ANIL B KATTI CRIMINAL APPEAL No.544 OF 2013 (A) BETWEEN:
J.J.VAGEESH KUMAR S/O. J.M.JAYAKUMAR 35 YEARS, AGRICULTURIST AND ALSO MANAGING BRINDAVAN LODGE AND COMPLEX, R/AT BALAKRISHNA NILAYA, MAHAVEER NAGAR MAIN ROAD, BESIDE AZAD FLOUR MILL, CHITRADURGA TOWN. …APPELLANT (BY SRI. N.VAGEESH, ADVOCATE)
AND:
S.D.CHANDRASHEKAR @ ADIKE SHETTRU S/O LATE S.K.DHANANJAYA NAIDU, 50 YEARS, COFFEE PLANTER AND DHARSHAN LORRY OWNER, R/O. BESIDE KHETAN SERVICE STATION, (BELEGADDE) RAGHAVENDRA NAGAR, B.M.ROAD, NH-48, SAKLESHPURA POST-573 134, HASSAN DISTRICT. …RESPONDENT (BY SRI. PRAKASH M.PATIL, ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 378(4) CR.P.C, PRAYING TO SET ASIDE THE JUDGMENT DATED 25.03.2013 PASSED BY THE I ADDL. J.M.F.C., CHITRADURGA IN C.C.NO.1695/2006- ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT.
THIS APPEAL HAVING BEEN HEARD AND RESERVED ON 17.01.2024, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
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JUDGMENT
Appellant/complainant feeling aggrieved by judgment of Trial Court on the file of I Addl.Civil Judge and JMFC, Chitradurga in C.C.No.1695/2006, dated 25.03.2013 preferred this appeal.
Parties to the appeal are referred with their ranks as assigned in the Trial Court for the sake of convenience.
Heard the arguments of both sides.
After hearing arguments of both sides and on perusal of Trial Court records with the impugned judgment under appeal, the following points arise for consideration: 1) Whether the impugned judgment under appeal passed by Trial Court is perverse, capricious and legally not sustainable? 2) Whether interference of this Court is required? 5. On careful perusal of oral and documentary evidence placed on record, it would go to show that complainant and accused were well acquainted with each
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other as family friends. On 09.04.2006 accused approached complainant for financial assistance of Rs.15,00,000/- in order to improve and develop his coffee estate and has assured to repay the same within one month. Complainant has paid the money of Rs.15,00,000/- on 09.04.2006 and accused issued post dated cheque bearing No.0980862, dated 09.05.2006 for Rs.15,00,000/- drawn on Corporation Bank, Sakleshpura branch. Complainant presented the said cheque for collection through his banker Veerashaiva Urban Co-operative Society Ltd., Chitradurga. The said bank sent the cheque for collection through Karnataka Bank Ltd., Chitradurga and the same was dishonoured for want of sufficient fund in the account of accused vide bank endorsement Ex.P.2 dated 15.05.2006. The banker of complainant intimated the same to complainant on 17.05.2006 Ex.P.3 and the letter of the banker of complainant is produced at Ex.P.4 dated 22.05.2006. Complainant issued demand notice dated 03.06.2006 Ex.P.5 through RPAD and under certificate of posting. UCP is produced at Ex.P.6 and the undelivered demand notice through RPAD envelop is
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produced on 15.06.2006 Ex.P.7(a) as not claimed. Complainant has filed complaint on 24.07.2006 within a period of one month from the date of accrual of cause of action. PW.2 Bheemarao is the Manager of Veerashaiva Urban Co-operative Society Ltd. and has spoken about Ex.P.1 cheque was presented by complainant for collection and the same was sent for collection which came to be dishonoured for want of sufficient funds in the account of accused. He further deposes that the intimation of dishonour of cheque was given to complainant by letter Ex.P.4 and the intimation of Karnataka Bank Ex.P.3, so also the bank endorsement Ex.P.2. If the above referred documents are perused and appreciated with the evidence of PWs.1 and 2, then it would go to show that complainant has complied necessary legal requirement in terms of Section 138 (a) to (c) of Negotiable Instruments Act, 1881 (hereinafter for brevity referred as “N.I.Act”). Thereafter, complainant has filed the complaint on 24.07.2006 within one month from the date of accrual of cause of action in terms of Section 142(1)(b) of N.I.Act. When once issuance of cheque and signature of accused on Ex.P.1 cheque is
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proved by the complainant, then statutory presumption in terms of Section 118 and 139 of N.I.Act will have to be drawn.
In this context of the matter, it is useful to refer the judgment of Hon'ble Apex Court in APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers and others reported in AIR 2020 SC 945, wherein it has been observed and held that once the issuance of cheque with signature on cheque is admitted, there is always a presumption in favour of complainant that there exist legally enforceable debt or liability. Plea by accused that cheque was given by view of security and same has been misused by complainant is not tenable.
It is also profitable to refer another judgment of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and another reported in 2022 SCC OnLine SC 1131, wherein it has been observed and held that:- " Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the
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onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Section 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."
In view of the principles enunciated in the aforementioned two judgments of Hon'ble Apex Court, it is evident that when once issuance of cheque with signature of accused on the account maintained by him is admitted or proved then statutory presumption in terms of Section 118 and 139 of N.I. Act will have to be drawn. Now, it is up to the accused to place rebuttal evidence to displace the statutory presumption available in favour of the complainant.
The defence of accused is that complainant has no financial capacity to lend huge loan of Rs.15,00,000/- and there are no documents for giving money to accused.
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Accused to probabilise his defence apart from relying on the material produced by complainant also relied on the evidence of DWs.1 to 4 and the documents Ex.D.1 to Ex.D.8. Whether the said rebuttal evidence placed on record by accused would be sufficient to displace the statutory presumption available in favour of complainant or not is to be decided.
Learned counsel for accused has also argued that demand notice Ex.P.5 dated 03.06.2006 is not duly served to accused. Therefore, there is non compliance of Section 138(b) of N.I.Act. The Trial Court has elaborately discussed regarding the service of notice on the correct address of accused from para Nos.12 to 18 of it’s judgment and recorded finding that demand notice was duly served to accused. Accused has not denied the correctness of the address shown in the cause title of the complaint. The Trial Court has also referred Exs.D.1 and 2 certified copy of the ledger extract of the Corporation Bank, Sakleshpura Bank and statement of accounts. Where under the very same address is appearing as
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shown in the cause title of the complaint. In this context, it is useful to refer the judgment of Hon'ble Apex Court in C C Alavi Haji vs. Palapatti Muhammed and Another reported in (2007) 6 SCC 555 wherein it has been observed and held in para 13 and 14 as under : "13. According to Section 114 of the Act, read with Illustration (f) thereunder, when it appears to the court that the common course of business renders it probable that a thing would happen, the court may draw presumption that the thing would have happened, unless there are circumstances in a particular case to show that the common course of business was not followed. Thus, Section 114 enables the court to presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. Consequently, the court can presume that the common course of business has been followed in particular cases. When applied to communications sent by post, Section 114 enables the court to presume that in the common course of natural events, the communication would have been delivered at the address of the addressee. But the presumption that is raised under Section 27 of the GC Act is a far stronger presumption. Further, while
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Section 114 of the Evidence Act refers to a general presumption, Section 27 refers to a specific presumption. For the sake of ready reference, Section 27 of the GC Act is extracted below: "27. Meaning of service by post.- Where any Central Act or Regulation made after the commencement of this Act authorizes or requires any document to be served by post, whether the expression 'serve' or either of the expression 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post." 14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is deemed to have knowledge of the notice. Unless and until the
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contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This Court has already held that when a notice is sent by registered post and is returned with a postal endorsement "refused" or "not available in the house" or "house locked" or "shop closed" or "addressee not in station", due service has to be presumed. (Vide Jagadish Singh v. Natthu Singh; State of M.P. v. Hiralal and V.Raja Kumari v. P.Subbarama Naidu). It is, therefore, manifest that in view of the presumption available under Section 27 of the Act, it is not necessary to aver in the complaint under Section 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved."
In view of the principles enunciated in this judgment of Hon'ble Apex Court, the contention of accused that demand notice is not duly served to him cannot be legally sustained. Therefore, there are no valid grounds to deviate from the finding recorded by the Trial Court regarding deemed service of demand notice Ex.P.5 to the accused.
Learned counsel for accused has also vehemently argued that there is a material alteration in the cheque Ex.P.1 and the said material alteration of the
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year renders Ex.P.1 as void in terms of Section 87 of N.I.Act. On careful perusal of cheque in question Ex.P.1, it would go to show that the date, month and year as 9.5.2006 is correctly written in the cheque. It is true that there is printed numerical number “19” thereafter some blank space is left to complete the year. There is no any alteration in the numerical year “19”. It is behind to that the date 9.5.2006 is written as the cheque was drawn on the said date. The numerical beginning of the year i.e., “19” has not been altered and it remains as it is. Therefore, there is no question of accused signing on the alleged alteration said to have been appearing in cheque Ex.P.1. Accused has examined DW.2 Senior Manager of Corporation bank, Sakleshpura Branch who has deposed to the effect that, on 18.06.1999 cheque book containing 10 cheque leaves from No.987721 to 987730 have been issued to the accused. Thereafter, on 07.03.2000 bank has issued cheque book containing 10 cheque leaves from No.595871 to 595880. DW.2 has admitted in his cross- examination that after requisition form in the cheque book, there will be three cheques which can made use of
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by complainant. DW.2 has further admitted that there is no any rule that all the cheques of the year has to be used in the same year. At the most it can be said that cheque book issued to the complainant containing 10 cheque leaves issued on 18.06.1999, one of the cheque after the requisition out of the remaining 3 cheque leaves must have been used by the accused to deliver the same to the complainant. The issuance of cheque and his signature is not disputed by the accused. Therefore, it will have to be held that accused has issued cheque Ex.P.1 to the complainant on the account maintained by him in the Corporation bank, Sakleshpura branch. The defence of accused that he has issued the said cheque for the loan of Rs.50,000/- availed from complainant and he has repaid the entire amount, but by misusing the said cheque has filed the complaint. This defence will be appreciated with the evidence on record at later stage. The Trial Court has rightly appreciated the evidence of DW.2 and the cheque Ex.P.1 with that of the evidence of PW.1 and recorded proper finding in rejecting the contention of accused that there is material alteration in the cheque Ex.P.1.
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It is the defence of accused that complainant has no financial capacity to lend huge money of Rs.15,00,000/- on 09.04.2006 and there are no any documents for giving the said money to accused. Accused got himself examined as DW.1 and he has deposed to the effect that, complainant known to him for the last 15 years and the house of mother of complainant is by the side of his house in Sakleshpura. He has availed loan of Rs.50,000/- in the year 1999 and as a security for the said loan given blank signed cheque drawn on Corporation bank, Sakleshpura branch and he has repaid the entire loan amount of Rs.50,000/- in the year 2000. When he asked for return of the cheque given as security, complainant stated that it is in the house at Chitradurga and he will trace the same and return it. He has further deposed to the effect that he has taken loan from bank whenever there was need for improvement of garden land and for education of his daughter.
DW.3 N Raghavendra is the Income Tax Inspector and has deposed to the effect that complainant
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has filed Income Tax returns from 2000 to 2007. The loan transaction has to be shown in the Income Tax returns. On 31.03.2006 Income Tax returns for the year 2005-06 has been filed by the complainant and shown that he has advanced money to three persons and out of them Chandrashekar name is not there. Income Tax returns for the year 2006-07 has been filed, balance sheet was not produced. DW.3 has categorically admitted in his cross- examination that in the Income Tax returns for the assessment year 2006-07 the transactions from 01.04.2005 to 31.03.2006 will be shown. The present transaction as per the complaint averments took place on 09.04.2006, which will be after the financial year of 01.04.2005 to 31.03.2006. Therefore, the loan transaction will have to be shown only for the financial year dated 01.04.2006 to 31.03.2007 for the assessment year 2007- 08.
Complainant has produced Income Tax returns Exs.P.8 to 12. The relevant year Income Tax returns for the assessment year 2007-08 is at Ex.P.8. Learned
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counsel for accused has vehemently argued that the annexures to Exs.P.8 to 12 does not bear the seal and signature of Income Tax department and the same cannot be looked into as part and partial of Income Tax returns. The Income Tax returns Exs.P.8 to 12 would go to show that the columns are meant to only to show the income, net liability to pay the tax and TDS. The Income Tax returns will be accompanied by statement of income which will depict the income, liability and other particulars and ultimate determination of tax liability payable by filing Income Tax returns. The advancement of loan to the accused amounting to Rs.15,00,000/- is shown in all the Income Tax returns appended with the annexures showing the loans and advances. It is not the only form i.e., Income Tax return verification form is being submitted without disclosing the statement of income and liability. If at all the accused doubts about the genuineness of statement of income appended to Exs.P.8 to 12, then nothing would have been prevented him from eliciting those facts in examination-in-chief of DW.3 N.Raghavendra, Income Tax Inspector who has been
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examined by the accused. The contention of learned counsel for accused is that the transaction on 09.04.2006 giving loan of Rs.15,00,000 to the accused is not shown in the Income Tax returns for the year 2006-07. This contention of learned counsel for accused cannot be legally sustained in view of the clear admission of DW.3 in his cross-examination that in the Income Tax returns for the year 2006-07 the transaction from 01.04.2005 to 31.03.2006 only will be shown. Indisputably, the transaction in question took place after the said financial year of 09.04.2006. Therefore, complainant has shown advancing of loan in the Income Tax returns Ex.P.8 for the assessment year 2007-08. The same is followed in the subsequent years of assessment Ex.P.9 to Ex.P.12. The seal and signature of receiving authority in the Income Tax department is appearing on Exs.P.8 to 12. If the statement of income is not filed along with the Income Tax returns Exs.P.8 to 12, then the tax liability to which the complainant is required to pay the tax could not even be determined. If at all the accused is sure that no statement of income was filed along with Income Tax returns Exs.P.8
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to 12, then nothing would have been prevented to summon DW.3 who has been examined by accused to produce the statement of income. The contention of learned counsel for accused that the loan transaction is not shown in the Income Tax statement 2006-07 cannot be legally sustained, since the transaction from 01.04.2005 to 31.03.2006 will be only shown for the assessment year 2006-07. The transaction in question took place on 09.04.2006 which is after the financial year of 2006-07. Therefore, the same will have to be shown only in the assessment year 2007-08. The Trial Court has not properly appreciated the Income Tax returns and the evidence of DW.3 in recording finding that Income Tax returns for the year 2006-07 is not produced and as such the transaction as claimed by the complainant is not proved. The question of filing income tax return for the year 2006-07 would arise only if the transaction falling within the period from 01.04.2005 to 31.03.2006. Therefore, the non production of Income Tax returns for the year 2006-07 will be a suspicious circumstance in
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proving the loan transaction claimed by complainant cannot be legally sustained.
Learned counsel for accused has also argued that complainant has not produced document evidencing the loan transaction and therefore accused was under no obligation to pay the money of Rs.15,00,000/- covered under Ex.P.1 as claimed by complainant. In this regard if the evidence of PW.1 and his defence is appreciated, then even according to him accused he has taken loan of Rs.50,000/- and at that time complainant has obtained no any documents from the accused. It means that complainant has given money to the accused without obtaining any document as it was done earlier also. The issuance of cheque Ex.P.1 with his signature on the account maintained by him in Corporation bank, Sakleshpura branch is not disputed by the accused.
It is true that accused has availed loan from Canara bank vide documents Exs.D.1 to 4 and the education loan of his daughter Ex.P.7. Just because accused has availed loan from Canara bank, it does not
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mean that accused cannot avail any private loan. Therefore, the said documents relied by accused cannot be of much assistance to substantiate his defence. 16. Lastly, learned counsel for accused also challenged the financial capacity of complainant to lend huge money of Rs.15,00,000/-. It is also further argued that there is inconsistent statement of complainant regarding payment of loan of Rs.15,00,000/-. Complainant has also filed O.S.No.1/2008 for recovery of the cheque amount with interest. The Trial Court decreed the suit and the defendant assailed the said judgment of Trial Court before this Court in R.F.A.No.1094/2010 which came to be allowed by judgment dated 23.02.2012 and the matter was remanded to the Trial Court. There is no legal bar to maintain civil proceedings and criminal proceedings on the cheque issued by the accused. In this context it is profitable to refer the judgment of Hon'ble Apex Court in D.Purushothama Reddy and another Vs. K.Sateesh reported in (2008)8 SCC 505, wherein it has been observed and held that:
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“ Although, it is beyond any doubt or dispute that for the same cause of action both a civil suit and a complaint petition under Section 138 of N.I.Act would be maintainable, in terms of Section 357 of Cr.P.C., a duty is cost upon Civil Courts to take into account the sum paid or recovered as compensation in the criminal proceedings. The judgment of conviction and sentence was passed by the criminal Court on 15.12.2005. The suit was decreed by civil Court on 23.01.2006. Deposit of a sum of Rs.2,00,000/- by the appellants in favour of respondent was directed by the Criminal Court. Such an order should have been taken into consideration by the Civil Court”. In view of the principles enunciated in this judgment of Hon'ble Apex Court, it is evident that simultaneous civil suit and complaint case under Section 138 of N.I.Act for the same cause of action is maintainable. 17. It has been elicited in the cross-examination of PW.1 that all the family members of complainant are together residing and family possesses Brundavana lodge with complex, so also runs Bharath gas and possesses agricultural income and he is looking after the affairs of Brundavana lodge and collecting the rent of complex in Lakshmi bazaar. Complainant has given Rs.50,00,000/- to
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his brother and he gets Rs.3,00,000/- income per year. PW.1 has shown the advancing of said loan to his brother- in-law in the Income Tax returns filed Exs.P.8 to 12. It has been elicited in the cross-examination of DW.3 that as per the records complainant has advanced loan of Rs.25,00,000/- to S Suresh Kumar and he has also got fixed deposit of Rs.15,00,000/- in Veerashaiva Bank, further complainant has lend the loan of Rs.10,00,000/- to one P S Nanjappa and the said transactions are evidenced in the Income Tax returns for the year 2007-08. When the complainant is capable of mobilizing the funds to advance loan to accused, then it cannot be said that complainant has no financial capacity to lend money to accused covered under cheque Ex.P.1. The Trial Court for the reasons recorded in para 37 and 38 of it’s judgment has held that when the complainant is lending money to others on interest, but accused was not charged with any interest on the loan availed by him. The fact that the mother of complainant is from Sakleshpura and her parental house is next to the house of accused and complainant is known to the accused for the last fifteen years and they were having
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earlier transaction also, further even according to the evidence of DW.1 when he has taken alleged loan of Rs.50,000/- for repaying the installment of his vehicle no any interest was charged for him. Therefore, non charging of interest from the loan availed by the accused under these circumstances cannot be a ground to hold that it is the suspicious circumstances to discredit the loan transaction claimed by complainant. Therefore, the findings of Trial Court regarding the financial capacity and no documents for giving money are the circumstances to suspect the genuineness of the transaction cannot be legally sustained.
Thus, the accused has failed to probabilise his defence that he has issued the cheque Ex.P.1 to the complainant for availing loan of Rs.50,000/- and he has repaid the said loan amount in the year 2000. However, complainant has misused the said cheque to file this false complaint.
The Trial Court has not properly appreciated the evidence on record in holding that complainant has no
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financial capacity to lend the money to complainant covered under cheque Ex.P.1. The Income Tax returns filed Exs.P.8 to 12 and the non production of Income Tax returns for the year 2006-07 and there being no any document of giving money to the accused are the suspicious circumstances which would be sufficient rebuttal evidence to displace the statutory presumption available in favour of complainant. The transaction in question took place on 09.04.2006 i.e., after the financial year of 01.04.2005 to 31.05.2006. Therefore, there is no question of showing the said transaction for the assessment year 2006-07. Complainant has shown the said loan transaction of accused and his brother-in-law in the Income Tax returns submitted Exs.P.8 to 12. The contrary findings recorded by Trial Court cannot be legally sustained.
When once issuance of cheque with signature of accused is admitted or proved, then statutory presumption will have to be drawn. On appreciating the evidence on record, if the rebuttal evidence placed on record by
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accused is found to be unsustainable then in that event of the matter statutory presumption available in favour of complainant in terms of Section 118 and 138 of N.I.Act continues to operate in his favour. The complainant by evidence on record has proved that accused has committed an offence under Section 138 of N.I.Act.
The question now remains is imposition of sentence. The imposition of sentence has to be proportionate to the proved guilt of accused. The Court has to take into consideration the material evidence placed on record, nature of transaction and other attending circumstances. Looking to the facts and circumstances of the present case, if the accused is sentenced to pay a fine of Rs.15,10,000/- and in default of payment of fine shall undergo simple imprisonment for 6 months is imposed would meet the ends of justice. Consequently proceed to pass the following:
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ORDER
Appeal filed by appellant/complainant is here by allowed.
The impugned judgment of Trial Court on the file of I Addl.Civil Judge and JMFC, Chitradurga in C.C.No.1695/2006, dated 25.03.2013 is hereby set aside.
Accused is convicted for the offence punishable under Section 138 of N.I.Act. and sentenced to pay a fine of Rs.15,10,000/- and in default of payment of fine shall undergo simple imprisonment for 6 months. In exercise of power under Section 357 of Cr.P.C., out of the fine amount Rs.15,00,000/- is ordered to be given to the complainant as compensation and remaining Rs.10,000/- is ordered to be defrayed as prosecution expenses.
Registry to send back the records to Trial Court with a copy of this order.
Sd/- JUDGE
GSR