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NC: 2024:KHC:24243 CRL.A No. 708 of 2015
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF JUNE, 2024 BEFORE THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR CRIMINAL APPEAL NO. 708 OF 2015 (A) BETWEEN:
K.J. VINAY S/O K.P. JAYANNA AGED ABOUT 40 YEARS R/O DOOR NO.4190 SHIVANANDA COLONY ARISIKERE TOWN - 573 103 …APPELLANT (BY SRI. CHANDRASHEKAR G.M., ADVOCATE) AND:
PRAVEEN S/O G.R. VIJAYENDRA R/O OLD LIC BUIDLING M.G.ROAD, SOMWARPET NORTH COORG - 571 236 …RESPONDENT (BY SRI. R.D. PANCHAM, ADVOCATE)
THIS CRL.A. IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:1.4.2015 PASSED BY THE SR. CIVIL JUDGE & JMFC, ARASIKERE, IN CRL.CASE NO.148/2010 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT. THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 14.06.2024, POSTED FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:
Digitally signed by SHAKAMBARI Location: HIGH COURT OF KARNATAKA
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NC: 2024:KHC:24243 CRL.A No. 708 of 2015
JUDGMENT
Appellant - complainant being aggrieved and dissatisfied of acquitting the respondent-accused in Criminal Case No.148/2010 dated 1.4.2015 by the Sr.Civil Judge and JMFC, Arasikere, has preferred this appeal.
The parties to this appeal are referred to as per their rank before the trial Court.
PROCEEDING BEFORE THE TRIAL COURT
Complainant and accused were known to each other. It is stated by the complainant that, on 1.10.2010, accused borrowed a sum of Rs.3 lakhs from the complainant to meet his family necessities. He agreed to repay the same after eight months with interest at the rate of 21% p.a. But, accused did not pay the same. When complainant requested to pay the amount borrowed from him, accused issued two cheques bearing No.014039 and 014040 dated 9.8.2010 for Rs.1,50,000/- each. When the said cheques were presented by the complainant for
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encashment through his banker the then SBM, Arasikere, they were dishonoured as per the endorsement issued by the Bank dated 20.8.2010. Thereafter, complainant got issued legal notice to the accused within stipulated time i.e,. on 31.8.2010. Despite service of notice, accused has not paid the money. Therefore, complainant filed a complaint under Section 200 of Cr.PC against accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (in short `the Act').
The jurisdictional Magistrate took cognizance of the offence, recorded the sworn statement. Based upon that, summons came to be issued to the accused and he appeared before the trial Court and was enlarged on bail. Accused pleaded not guilty for the offence alleged.
To prove the case of the complainant, he himself entered the witness box as PW.1 and also examined two witnesses in the shape of PWs. 2 and 3 and got marked Ex.P1 to P13, closed his evidence.
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After recording the statement of the accused under Section 313 of Cr.PC, accused himself entered the witness box as DW.1 to lead defence and also examined three witnesses as DW1 to4. On behalf of the defence, Ex.D1 to D5 were marked.
The learned trial Court, on hearing the arguments and on assessment of the evidence, held that complainant has not discharged the initial burden of presumption available under Sections 118 and 139 of the NI Act and has concluded that there is no merit in the case of the complainant. Therefore, answered the points for consideration in the negative and ultimately, acquitted the accused of the charge levelled against him. This is how now the appellant-complainant is before this Court challenging the impugned judgment.
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PROCEEDING BEFORE THIS COURT
The learned counsel for the appellant, with all force submits that, when accused admits his signature and the cheque belongs to him, that is sufficient to draw presumption under Secs.118 and 139 of NI Act, that, the cheque was issued in favour of the complainant in discharge of the loan availed from the complainant. He submits that, the trial Court has misconceived the said presumption which is available under the provisions of NI Act and has wrongly acquitted the accused holding that complainant has failed to discharge the burden.
In support of his submission, the learned counsel for the appellant relies upon the allegations made in the complaint as well as evidence lead by the complainant and his witnesses so also documents. He also relied upon the judgment of the Hon'ble Apex Court reported in Rajesh Jain vs. Ajay Singh reported in AIR Online 2023 SC 807.
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Repelling this submission, the learned counsel for the respondent-accused supported the reasons assigned by the trial Court in acquitting the accused. As per the evidence placed on record, according to him, there were no transactions in between the complainant and the accused. The transaction was with the father of the complainant-Jayanna through his father-in-law and the amount so borrowed by the accused from Jayanna has already been repaid by him. The cheques which were given as security to Jayanna were misused by the complainant. He submits that, it is a collusive complaint filed by complainant and his father so as to extract money by filing the complaint. According to him, the complainant had no financial capacity to advance the loan and at the relevant time, he was not having sufficient funds. Even it is submitted that, though it is the case of the complainant that he has availed loan from Corporation Bank to the extent of Rs.2 lakhs but, the said amount was never withdrawn by the complainant to advance the loan to the accused. When the complainant states that he was having
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a cash of Rs.1 lakh with him, to that effect he has not produced any documents that how he was possessing that much of amount with him. In view of this, the very financial capacity of the complainant is stated to be not proved by him. Therefore, it is submitted that the learned trial Court has considered all these aspects and has rightly passed the impugned judgment by giving cogent and acceptable reasons.
It is submitted that this well reasoned judgment shall not be interfered in this appeal. Hence, prays to dismiss the appeal.
I have taken note of the rival submissions canvassed by both the side and meticulously perused the records.
Since, in this case, the execution of the cheque is admitted which is not under dispute, the limited question that is to be considered to decide this appeal is:
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"Whether the accused be said to have discharged his "evidential burden" with regard to the presumption of law supplied by Section 118 and 139 of the NI Act.?" Section 118 and 139 of the NI Act read as under:
Presumptions as to negotiable instruments.—Until the contrary is proved, the following presumptions shall be made:—
(a) of consideration:—that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date:—that every negotiable instrument bearing a date was made or drawn on such date;
(c) as to time of acceptance:—that every accepted bill of exchange was accepted within a reasonable time after its date and before its maturity;
(d) as to time of transfer:—that every transfer of a negotiable instrument was made before its maturity;
(e) as to order of endorsements:— that the endorsements appearing upon a negotiable instrument were
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made in the order in which they appear then on; (f) as to stamp:— that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course:—that the holder of a negotiable instrument is a holder in due course: provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him.
Presumption in favour of holder.— It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability.
As it is a case of dishonour of a cheque, it is expected by the Courts dealing with such cases to consider that whether the ingredients of aforesaid section are complied by the complainant and if so, whether the
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accused was able to rebut such presumption contemplated under Section 118 and 139 of NI Act.
On reading the aforesaid provisions, it is the duty of the complainant to prove regarding the drawing of a cheque by a person on do account maintained by the accused with the banker for the payment of any amount of money to another from that account, the cheque being drawn by the accused for the discharge in whole or in part of any legally enforceable debt or other liability, on presentation of the said cheque, the amount to be paid from that account and when presented the said cheque returns unpaid either because of amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds that amount. Thereafter, a notice by the payee of the holder of the cheque in due course making a demand to pay the cheque amount within stipulated time and filing of a complaint within the stipulated time from the complainant.
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These ingredients are quite necessary to be complied by the complainant as contemplated under Section 138 of the NI Act.
On reading the aforesaid Sections 118 and 139 of NI Act, the legal burden is on the complainant to prove the aforesaid ingredients which is constant throughout the trial. That means, it is for the complainant to establish the facts and contentions which will support his case. Once this burden is discharged by the complainant, then the onus shifts on the accused by leading rebuttal evidence to disprove the case of the complainant, because, the presumptions which is available is a rebuttable presumption.
Keeping the aforesaid legal position, let me analyze the evidence placed on record by both the side to ascertain about proof of the respective case of the complainant and the defence accused as the case may be.
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To substantiate the case of the complainant, PW.1 being the complainant, has spoken in line with the contents of the complaint and he relied upon Exs.P1 to P8. So far as cheques are concerned, they are marked at Ex.P1 and P2 both are dated 9.8.2010 for Rs.1,50,000/- each. The said cheques are issued in respect of the Account NO.1232 of Vyavasaya Sahakara Seva Bank Niyamitha, Somwarpet Branch. Likewise, Ex.P3, P4 and P5 are the endorsements with regard to the dishonour of the aforesaid two cheques Ex.p1 and P2. The other documents are postal receipts, copy of the notice etc.,
Thus, issuance of the cheque is not specifically denied by the accused but, according to him, he has not issued the cheque in the name of the complainant but, towards loan raised by him from Jayanna, the father of complainant, as security, he issued blank cheques which were misused by the complainant.
On reading the cross-examination directed to PW.1, though he supports his case, but, he deposed that,
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he has borrowed a sum of Rs.2 lakhs from Corporation Bank, Arasikere Branch and he was possessing Rs.1 lakh. The said amount was given to the accused on 1.1.2010, but, with regard to possessing of Rs.1 lakh and borrowing of Rs.2 lakhs as per his own evidence, he has not shown the same in his income tax returns. Whereas, the account extract of complainant was confronted to him as per Ex.D3 wherein it shows that, Rs.2 lakhs was credited to the account of the complainant and the balance remained as it is upto 31.3.2010. But, as per the case of the complainant, he advanced a loan of Rs.3 lakhs to the accused on 1.1.2010. If really by borrowing Rs.2 lakhs from Corporation Bank, he advanced Rs.3 lakhs in all to the accused, how that Ex.D3 still showed balance of Rs.2 lakhs and more in the account of the complainant even as on 31.3.2010 is not explained by the complainant either in the complaint allegations or in his evidence on oath. The learned trial Court has rightly opined that, such a huge amount was being advanced by the complainant to the accused without withdrawing the amount cannot be
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accepted. Thus, the very probability of the case of the complainant that, he was having sufficient funds to advance the loan to the accused was not believed by the trial Magistrate. This finding of the trial Court is fact finding based upon the evidence of PW.1 and the documents produced by the complainant as well as by the accused.
When such a capacity of the complainant having sufficient funds to advance the loan as on 1.1.2010 is not proved, then whether such a loan was being availed by the accused and these two cheques were issued in discharge of the said loan is the question to be ascertained.
As per the defence of the accused, he borrowed a loan of Rs.2,60,000/- from Jayanna about 10 years back and he has repaid the same through his father-in-law Basavakumar's account. To that effect, he has examined his own witnesses DWs. 2 to 4. DW.4 his father in law has come before the trial Court and deposed about borrowing a loan by the accused from the father of the complainant
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Jayanna and by way of security issuing of cheque Ex.P1 and P2. Thus from the evidence of DWs.1 to 4 that, he has not borrowed any money from the complainant but, borrowed money long back from Jayanna of which he has produced accounts Extract. To that effect the manager of Corporation of Somwarpet branch and another Manager from Arasikere Branch have produced Ex.D3 and 4 respectively.
No effective cross-examination is directed to these DW.2 to 4 so as to disbelieve their evidence given in their respective examination-in-chief. Though, it is stated by the complainant that accused agreed to repay the loan amount after eight months together with interest at 21% p.a. but, during the course of his evidence as rightly pointed by the trial Court, when the alleged loan was advanced nobody was present except PW.1 AND DW.1. But, no witness has spoken about the loan transaction alleged by the complainant.
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The presumption which is available under Section 139 of NI Act is more stronger in favour of the accused than the complainant because the said cheques were issued with signature and the amount was kept blank, date was kept blank i.e. in favour of Jayanna. To prove that Jayanna never received those cheques towards the loan advanced by him, Jayanna being the complainant's father, would have been examined by the complainant to disprove the said presumption. Whereas, DWs. 2 to 4, being the witnesses on behalf of the accused have supported the defence of the accused. The presumption which is available under Section 139 of NI Act to the accused is rebutted by adducing the evidence of these DWs.2 to 4 by the accused which is a rebuttable presumption.
No doubt, the learned counsel for the accused relied upon the aforesaid judgment in Rajesh Jain vs. Ajay Singh case which specifically envisages that, it is a rebuttable presumption and the burden is on the accused
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to rebut the presumption. In this case, there is a consistent evidence of the accused as has been elicited in the evidence of DW 2 to 4 that, accused had never borrowed any money from the complainant and through the evidence of these DWs. 2 to 4 he has proved that, those cheques have been misused by the complainant. May be the signature on the cheque is admitted, that does not mean that, presumption is very much available in favour of the complainant as provided under Section 118 and 139 of the Act. Because of minor inconsistencies in the evidence of the accused i.e. DW.1 and the evidence of DW.4 that will not falsify the defence of the accused. Throughout, the trial, accused has maintained that, he never borrowed money from the complaint and the said cheques have been misused by the complainant.
Thus, the complainant has miserably failed to discharge his evidentiary burden and thus, it cannot taken that he has proved his case on the presumption which is available under the provisions of NI Act.
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The learned trial Court has rightly assessed the evidence placed on record by the complainant and accused and given the sound findings with regard to the presumption which is available in favour of the accused and he has discharged his evidential burden by adducing the evidence of DW 2 to 4. He also has spoken to that effect by deposing evidence as DW.1. Merely because PW.2 and 3 have spoken before the Court and no reply was given to the demand notice is not sufficient to believe the case of the complainant. The evidence of PWs. 1 to 3 is self-serving and cannot be accepted that the legal evidential burden cast on the complainant is discharged by him with proper evidence. Hence, the point raised supra is answered in favour of respondent-accused and against the complainant. There is no merit in this appeal and accordingly, it fails.
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Resultantly, I pass the following:
ORDER i) Appeal is dismissed.
ii) Consequentially the judgment of acquittal passed by the trial Court in CC No.148/2010 dated 01.04.2015 by the Senior Civil Judge and JMFC, Arasikere is hereby confirmed.
iii) Send back the trial Court records along with a copy of this judgment forthwith.
Sd/-
JUDGE
SK List No.: 1 Sl No.: 4