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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JULY, 2024 BEFORE THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR CRIMINAL APPEAL NO. 491 OF 2014 (A) BETWEEN:
SRI. B.M. SHANKAR S/O MOODLEGOWDA AGED ABOUT 35 YEARS RESIDING AT SHOP NO. 37/2 2ND CROSS, NANJMBA AGRAHARA CHAMARAJAPET BANGALORE-36 …APPELLANT (BY SRI. CHRISTOPHER NOEL A., ADVOCATE [ PH])
AND:
SRI. G. HEMANTH KUMAR S/O GANGADHAR AGED ABOUT 37 YEARS RESIDING AT NO. 42/2 7TH CROSS, AZAD NAGAR BANGALORE-63 …RESPONDENT (BY SMT. ARCHANA MURTHY, ADVOCATE [PH])
THIS CRL.A. IS FILED U/S. 378(4) OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED:30.5.14 PASSED BY THE XV ADDL.C.M.M., BANGALORE IN C.C.NO.27284/11 - 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 25.06.2024, 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:26991 CRL.A No. 491 of 2014
JUDGMENT
Appellant/Complainant being aggrieved and dissatisfied of acquittal of Respondent/Accused in Criminal Case No.27284/2011 dated 30.05.2014 by the XV Addl. Chief Metropolitan Magistrate, Bengaluru City, Bengaluru, has preferred this appeal.
The parties to this appeal are referred to as per their rank before the trial court. Case of the Complainant before the trial Court:
The complainant and accused are known to each other since long time. During the second week of January 2011 accused approached the complainant and requested for financial assistance of Rs.1,50,000/- to meet his family problems. Accused promised to repay the amount within six months. Believing him, complainant mobilized funds and paid Rs.1,50,000/- by way of cash on 10.01.2011. After six months, when complainant approached accused and requested to return loan amount,
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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
accused issued a cheque for Rs.1,50,000/- dated 24.06.2011 drawn on Swarna Bharathi Sahakara Bank Niyamit, BSK II Stage, Bangalore. When cheque was presented through Indian Bank, Avenue Road Branch, Bangalore for encashment, the cheque was returned unpaid for the reason "funds insufficient". In this regard Bank had issued memo dated 27.06.2011.
A legal notice was issued to the accused on 05.07.2011 and returned on 06.07.2011. But there was no response from the accused. 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 (hereinafter referred as 'the Act'). Cognizance of the trial Court:
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.
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To prove the case of the complainant, he himself entered into the witness box as PW.1 and got marked Ex.P1 to P5, and closed his evidence.
After recording the statement of the accused under Section 313 of Cr.PC, accused was examined himself as DW.1 and closed his evidence. Case of the Accused before the trial Court:
The accused stated that, the complainant has filed a false case against him. He had never taken any loan from the complainant. The accused, during the second week of January 2011 was not present at Bangalore. There was no occasion for him to request for loan from the complainant. Findings of trial Court:
The learned trial Court, on hearing the arguments and on assessment of the evidence placed on record by the complainant and accused held that, presumption stood rebutted with regard to circumstances
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particularly financial capacity of the complainant. Even though huge sum of Rs.1,50,000/- was lent way back in the year 2011, but surprisingly it is quite unnatural that no interest was charged. Further though complainant had an account in the Nationalised Bank, not transacted through Bank and alleged transaction was made in violation of Section 269-SS of Income Tax Act. The complainant has not discharged the initial burden of presumption available under Section 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 charges levelled against him. 10. This is how now the appellant/complainant is before this Court challenging the impugned judgment.
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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
Proceedings before this Court: i) Submissions on behalf of the Appellant:
The learned counsel for the appellant submits that, as the accused was in dire need of money, at his request, he advanced Rs.1,50,000/- as loan with a condition that, the accused shall repay the same after six months. Inspite of lapse of six months, accused did not pay and on demand, accused issued a cheque for Rs.1,50,000/- dated 24.6.2011 drawn on Swarnabharathi Sahakara Bank Niyamitha, BSK II Stage, Bengaluru. It is his submission that, when the said cheque was presented, it returned with an endorsement that `funds insufficient'. Thereafter, complainant issued statutory notice as required under law. As there was no response or payment by the accused, he filed a complaint.
It is his submission that, when accused admits his signature on the cheque and the receipt of the notice, then, the presumption which is available under the
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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
provisions of Sec.139 of NI Act is very much available to the complainant. Therefore, he pressed into service the provisions of Sec.118 and 139 of the NI Act.
In support of his submission, he relied upon the following judgments. (i) Sri. Chikkachowdappa S/o Gopanna v. Sri. s.M. Seetharam S/o Segumuddaiah Setty - Crl.R.P. No.574 of 2008
(ii) Fakirappa v. Shiddlingappa and another - ILR 2002 KAR 181
(iii) Rajesh Jain v. Ajay Singh - 2023 10 SCC 148
ii) Submissions on behalf of the Respondent
As against this submission, it is submitted by counsel for respondent that, when the complainant states, that if at all the alleged request was made by the accused seeking loan from the complainant, how could complainant pay a sum of Rs.1,50,000/- to the accused as he generated the funds by collecting only Rs.25,000/- from
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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
his friend Manjunath. To show that, this complainant was really having the amount with him to advance the loan, except self-serving testimony of complainant, no evidence is placed on record. He was drawing salary in a paltry sum of Rs.8,000/- per month. He could not have saved that much large amount and was capable of advancing loan. It his submission that, though the provisions of Section 118 and 139 of NI Act speak of presumption but, such a presumption is a rebuttable one. When the complainant has not proved his financial capacity to advance the loan, the very case of the complainant cannot be accepted. In support of his submission, he relied upon evidence spoken to by PW.1 as well as documents and also the evidence of accused.
On scrupulous reading of the evidence placed on record by the complainant in the shape of PW.1 though he reiterates the contents of complaint on oath and relied upon Exs.P1 to P6, the cross-examination directed to him is worth reading. It has come in his evidence that, he is
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NC: 2024:KHC:26991 CRL.A No. 491 of 2014
working in a silk shop as an Office boy for the last 13 years and was drawing a salary of Rs.8,000/- per month for the last 3 to 4 years prior to he undergoing cross- examination. According to him, he used to save Rs.5,000/- per month. As the accused being his friend, he helped him to meet his financial necessity. It has come in the evidence of PW.1, that whereabouts of accused were not known for the last two years prior to his cross- examination. Though complainant states that he advanced a loan of Rs.1,50,000/-, no documents are received from the accused as security. As rightly submitted by counsel for the accused, the said Manjunath who gave Rs.25,000/-, is not examined. He admits that the said cheque is signed by him as authorized signatory of M/s.Vision Infotech. Merely because the said cheque contains the signature of the accused, it does not mean that, it was issued by accused in discharge of legally enforceable debt. Even he has not charged the interest according to him. Thus, the evidence spoken to by PW.1 shows, that when he was a drawing a salary of Rs.8,000/-
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p.m. for the last three to four years prior to he undergoing cross-examination, when he has advanced a loan in the year 2011, what was his salary and what was his saving is not stated by him either in the complaint or in the evidence on oath. Even he has not produced his salary slip or bank account to show his financial soundness to advance the loan as stated by him.
Whereas, DW.1 has denied that, he has taken loan from the complainant and of issuing of cheque to that effect, but, admits that the said cheque belonged to him in respect of other transaction. He deposed ignorance with regard to contents of Ex.P1. He admits about receipt of notice. He admits in the cross-examination that he has not lodged any complaint regarding missing of cheque.
In a case of present nature, as rightly observed by the trial Court, the heavy burden lies on the complainant to prove the transaction between himself and accused. So also he has to prove his financial soundness
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to advance the loan in the manner stated. Though admittedly, the cheque is not in dispute, but, the evidential burden which cast on the complainant is not discharged in accordance with provisions of Sec.118 and 139 of NI Act, so also under the provisions of Indian Evidence Act. When burden of proof and presumption as laid down under the provisions of Indian Evidence Act, this burden of proof is always static and onus of proof goes on shifting. The presumptions available under the NI Act are rebuttable presumptions. There is distinction between discretionary presumption ('may presume') and compulsive presumption ('shall presume'). Therefore, the provisions of the Indian Evidence Act provides for presumptions which fit within one of three forms "May presume" ('rebuttable presumption of fact'), "Shall presume" ('Rebuttable presumption of law'). The distinction between `may presume' and `shall presume' as held in catena of judgments, specifically says that, in a case of present nature, the presumption `may' be drawn and not the `shall;. The financial capacity to advance the
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loan is the presumption of fact. Unless, complainant proves his financial capacity and competency to advance the loan which is the crucial ingredient to pass an order of conviction is not discharged in this case by the complainant. Merely because accused admits his signature, that will not give a presumption in favour of the complainant. The circumstances so brought on record as set out above clearly show that this complainant had not produced any acceptable evidence so as to draw presumptions in his favour, whereas, the accused has rebutted the said presumption by cross-examining PW.1.
The answers spoken to by PW.1 falsifies his case and supports the case of the prosecution. The learned trial Court has analysed the evidence in proper perspective and rightly come to the conclusion that the presumption that was available to the complainant stood rebutted with regard to the financial capacity. Though the complainant had account with Nationalzied bank has not transacted with the same. Therefore, I do not find any factual or legal
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error in acquitting accused for the offences punishable under Section 138 of the NI Act.
In view of the discussion hereinabove, appeal fails and the judgment of acquittal passed by the trial court is to be confirmed.
Resultantly, I pass the following: ORDER (i) Appeal is dismissed. (ii) The impugned judgment of acquittal passed by XV Addl.C.M.M., Bangalore in CC No.27284/11 dated 30.05.2014 is hereby confirmed. (iii) Bail bonds of the accused stand cancelled. (iv) Send back the trial Court records along with copy of judgment.
Sd/- JUDGE
SK/- List No.: 1 Sl No.: 2