THE COMMISSIONER OF INCOME TAX vs. DR.PRABHAKAR KORE CREDIT SOUHARD

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CRL.A.No. 100114 of 2014

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

DATED THIS THE 24TH DAY OF FEBRUARY, 2023

BEFORE

THE HON'BLE MR JUSTICE RAJENDRA BADAMIKAR

CRIMINAL APPEAL NO. 100114 OF 2014

BETWEEN

JADESHA REDDY S/O. M.RAM REDDY AGE: MAJOR, OCC: TEACHER AND AGRICULTURE, R/O. SUMA NILAY, BEHIND MBT PETROL BUNK, J.P.NAGAR, HOSAPETE, DIST: BALARI.

.....APPELLANT. (BY SRI SHRIHARSH A. NEELOPANT, ADVOCATE.)

AND

G.CHANDRANNA S/O.G.CHANNABASAPPA AGE: 53 YEARS, OCC: LECTURER IN GOVERNMENT JUNIIOR COLLEGE, R/O. BESIDE GANDHI NAGAR POLICE STATION, OPP. RAGHAVA KALA MANDIR, ANANTAPUR ROAD, BALLARI.

…..RESPONDENT (BY SRI B.G.INDI, ADVOCAE FOR SRI K.L.PATIL, ADVOCATE.)

THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF THE CODE OF CRIMINAL PROEDURE, 1973, SEEKING TO SET ASIDE THE JUDGMENT DATED 03.09.2012, PASSED BY THE FAST TRACK COURT-III, HOSAPETE, IN CRL.A.NO.49/2012, FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF THE NEGOTIABLE INSTRUMENTS ACT, 1881, ETC.,. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 14.02.2023, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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JUDGMENT This appeal is filed by the complainant-appellant challenging the judgment of acquittal dated 03.09.2012, passed by the Addl. Sessions Judge and Presiding Officer, Fast Track Court-III, Hosapete, in Crl.A.No.49/2012, whereby the learned Sessions Judge has set aside the judgment of conviction and order of sentence dated 21.03.2012, passed by the Prl. Senior Civil Judge and JMFC, Hosapete, in C.C.No.288/2011, against the accused- respondent herein for the offence punishable under section 138 of the of the Negotiable Instruments Act, 1881, by acquitting him. 2. For the sake of convenience, the parties herein are referred with the original rankings occupied by them before the Trial Court. 3. The brief factual matrix leading to the case are as under:

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a) The complainant is a Government Teacher and an agriculturist. The accused is also a Lecturer in Government Junior College, Ballari. According to the complainant, on 19.06.2009 accused borrowed a sum of Rs.6,00,000/- from the complainant and issued a post dated cheque for a sum of Rs.6,00,000/- dated 19.08.2009 towards repayment of the said debt. On presentation of the said chqeque, it came to be dishonoured for insufficiency of funds and the complainant has got issued a legal notice, but the accused replied with false grounds and failed to make repayment. Hence, he filed a complaint under section 200 of Cr.P.C. against the accused for the offence punishable under section 138 of the Negotiable Instruments Act, 1881. b) After the complaint being lodged, the learned Magistrate has recorded the sworn statement of complainant and issued process against the accused by taking cognizance. The accused has appeared and was enlarged on bail. The accusation was read over and explained to the accused and he pleaded not guilty. The

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complainant was examined himself as PW.1 and placed reliance on seven documents marked at Exs.P.1 to P.7. Then the statement of accused under section 313 of Cr.P.C. was recorded and the accused denied the incriminating evidence appearing against him. Further, the accused got examined himself as DW.1 and his wife was examined as DW.2. Two witnesses were also examined as DW.3 and DW.4. He placed reliance on two documents at Ex.D.1 and D.2. c) After hearing the arguments and appreciating the oral and documentary evidence, the learned Magistrate has convicted the accused by imposing fine of Rs.10,000/- and in default to undergo simple imprisonment for a period of six months and also directed him to pay the compensation of Rs.6,00,000/- to the complainant. Being aggrieved by the judgment of conviction and order of sentence, the accused has preferred Crl.A.No.49/2012, on the file of Fast Track Court-III, Hosapete and the learned Sessions Judge after re-appreciating the oral and documentary evidence,

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allowed the criminal appeal by setting aside the impugned judgment of conviction passed by the learned Magistrate and acquitted the accused of the charge under section 138 of the of the Negotiable Instruments Act, 1881. Being aggrieved by this judgment, the complainant is before this Court by way of this appeal. 4. Heard the arguments advanced by the learned counsel for appellant-complainant and learned counsel for respondent-accused. Perused the records. 5. Learned counsel for appellant would contend that the First Appellate Court has erred in reversing the judgment of conviction without assigning proper reasons. He would also contend that there is admission by DW.2 regarding receipt of Rs.6,00,000/- by accused and the said admission came to be ignored. It is further urged that the complainant was a Government servant and he was also having agricultural income and there is no question of disputing his financial status. He would also assert that the signature on the cheque came to be admitted and hence the burden is on the accused to rebut the presumption

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CRL.A.No. 100114 of 2014

under section 139 of the Negotiable Instruments Act, 1881, which he failed. Hence he would contend that the First Appellate Court has erred in acquitting the accused by setting aside the order passed by the leaned Magistrate. Hence he would seek for allowing this appeal. 6. Per contra, learned counsel for respondent would contend that the accused is a Government servant. Ex.D.1 discloses that he has filed the income tax returns to the extent of Rs.1,49,000/- for the assessment year 2010-11 and he has not even shown agricultural income in the income tax returns. The total annual income is hardly Rs.1,71,400/- for the assessment year 2010-11 and Rs.1,48,365/- for the assessment year 2009-10. In that event it is hard to accept that he advanced the hand loan of Rs.6,00,000/- that too without interest. He would also contend the admission given by the complainant clearly establish that he has already filed three more cheque bounce cases, wherein the amount of Rs.3,00,000/- is involved. It discloses that he was doing money lending business illegally and he being a public servant, he was

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CRL.A.No. 100114 of 2014

not supposed to indulge in such activities and he is abusing his position. He would also contend that his financial capacity to pay Rs.6,00,000/- is not established and blank cheque issued by the complainant as security for the loan transaction of his wife was misused. In support of his contention he placed reliance on Ex.D.2 and the evidence of DWs.2 to 4. He would also contend that the stray admission given by DW.2 cannot be accepted and evidence as a whole is required to be considered. He would contend that the First Appellate Court has appreciated all these aspects and arrived at a just decision of acquitting the accused. Hence he would seek for dismissal of the appeal. 7. Having heard the arguments and perusing the records, the following point would arise for my consideration. “Whether the judgment of acquittal passed by the First Appellate Court reversing the judgment of conviction passed by the learned Magistrate is erroneous, arbitrary and

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capricious so as to call for any interference by this Court?” 8. The allegation of the complainant discloses that he has advanced a loan of Rs.6,00,000/- to the accused on 09.06.2009 and on that day as a security the accused has issued a post dated cheque for Rs.6,00,000/- dated 19.08.2009. The complainant is a public servant being a Teacher and he is residing at Hosapete. Further, accused is also a Government Teacher. The complainant admitted that he has not intimated to his higher officers regarding this financial transaction and admittedly he has not shown this transaction in his annual assets and liabilities. The admission given by the complainant in his cross- examination reveals that his annual income from agriculture is Rs.1,25,000/-. He claims to have purchased the land from his father-in-law for Rs.40,000/- in the year 1998. He has deposed the details of his income. At the same time he admits his annual agricultural income as Rs.1,25,000/-. His monthly income is around Rs.14,000/- as admitted by him. On a perusal of Ex.D.1 i.e., the

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income tax returns submitted by him, it is evident that he has submitted returns only for Rs.1,49,207/- and house rent Rs.24,000/- for the assessment year 2010-11. He has not shown the agricultural income in his annual returns in Form No.16. 9. When the annual income of the complainant from agriculture and salary is hardly about Rs.2,75,000/- to Rs.3,00,000/-, it is hard to accept his contention that on 19.06.2009 he had hard cash of Rs.6,00,000/- in his hand. He claims that he has agricultural income, but his annual agricultural income does not exceed Rs.1,30,000/- as per his own admission. In that event the complainant is required to explain about the source for this amount and if he is incapable of explaining the source for this amount, the Court cannot become a party to his illegal activities. 10. Apart from that, complainant has also admitted that on 3-4 occasions he has made such financial transactions with various persons and he has also admitted that he lodged 3-4 cases for the offence punishable under section 138 of the of the Negotiable

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CRL.A.No. 100114 of 2014

Instruments Act, 1881. This discloses that the complainant is doing money lending business illegally without obtaining permission from his higher officers. He being a pubic servant, he is required to declare his assets and liability including cash transaction as per KCS Rules. But the amount of Rs.6,00,000/- was not declared by him as admitted by him in his assets and liability statement. Even in his income tax returns he did not disclose the said aspect. Hence, his contention that he advanced the hand loan of the amount through cash of Rs.6,00,000/- cannot be accepted. Apart from that, he being a public servant, to deal financially with any other persons, he is required to seek sanction from higher officers, but that was also not done. 11. Apart from that, under the provisions of the Income Tax Act, if the payment is required to be made for more than Rs.20,000/-, it should be by way of cheque. But in the instant case he advanced hand loan of Rs.6,00,000/- through cash as per his case, which cannot be accepted and creates a doubt.

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CRL.A.No. 100114 of 2014

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be given much importance and the evidence as a whole is required to be considered. 14. No doubt the complainant is a holder of the cheque in due course and the initial presumption is in his favour. But it is required to be noted here that he is a public servant and handling cash without permission from the higher officers. Further his financial capacity itself establishes that he is not in a position to pay such a huge amount of Rs.6,00,000/- that too by way of hard cash. Under such circumstances, the presumption under section 139 of the Negotiable Instruments Act, 1881, is not available to the complainant and the complainant is required to prove his transactions by leading cogent evidence. But except the self interested testimony of the complainant, there is no material placed and hence the same cannot be accepted in view of the cross-examination of the complainant and Ex.D.1. 15. The learned Magistrate only on the basis of stray admission, proceeded to hold that the transaction was proved but the First Appellate Court has appreciated

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the oral and documentary evidence in detail and arrived at a just conclusion that the transaction is not established and has rightly acquitted the accused. The judgment of conviction passed by the learned Magistrate was erroneous. Hence the First Appellate Court has rightly set aside the judgment of conviction by acquitting the accused. The said judgment of acquittal passed by the First Appellate Court cannot be said to be erroneous or arbitrary so as to call for interference by this Court. Under such circumstances, the appeal being devoid of any merits does not survive for consideration. Looking to these facts and circumstances the point under consideration is answered in the negative. Accordingly, I proceed to pass the following: ORDER i) The appeal is dismissed by confirming the judgment of acquittal dated 03.09.2012, passed by the Addl. Sessions Judge and Presiding Officer, Fast Track Court-III, Hosapete, in Crl.A.No.49/2012.

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ii) Send back the records to the concerned Courts along with a copy of this judgment.

Sd/- JUDGE MRK