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CRL.A No. 93 of 2015 NC: 2024:KHC:13678
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF APRIL, 2024 BEFORE THE HON'BLE MS JUSTICE J.M.KHAZI CRIMINAL APPEAL NO.93 OF 2015 BETWEEN:
SMT. SAROJA.S W/O LATE M DEVARAJ, AGED ABOUT 43 YEARS, R/AT NO.36, RAGHAVENDRA NILAYA, KRISHNANAGARA MAIN ROAD, CHIKKADEVASANDRA, K R PURAM, BENGALURU - 560 036 …APPELLANT (BY SRI. M S NAGARAJA, ADVOCATE)
AND:
M/S SATABDI ENGINEERING WORKS C-90, ITI INDUSTRIAL ESTATE, WHITEFIELD ROAD, MAHADEVAPURA, BENGALURU - 560 048 REP BY ITS L A HOLDER, SRI ASHOK MANDAL …RESPONDENT (BY SRI. G JEEVA PRAKASH, ADVOCATE)
THIS CRL.A IS FILED UNDER SECTION 378(4) OF CR.P.C PRAYING THAT a) AFTER EXAMINE THE LEGALITY, PROPRIETY AND CORRECTNESS OF THE IMPUGNED JUDGMENT BE PLEASED TO SET ASIDE THE JUDGMENT OF ACQUITTAL PASSED BY THE LEARNED P.O. AND ADDL. SESSIONS JUDGE, F.T.C.-III, MAYO HALL, BENGALURU IN CRL.APPEAL NO.25011/2013 DATED 25.11.2014; b) CONSEQUENTLY, RESTORE THE JUDGMENT OF CONVICTION PASSED BY THE LEARNED XIV ADDL. CHIEF METROPOLITAN MAGISTRATE, MAYO HALL AT BENGALURU IN C.C.NO.35785/2010 DATED 17.12.2012; c) GRANT SUCH OTHER EQUITABLE RELIEFS
Digitally signed by REKHA R Location: High Court of Karnataka
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DEEMED FIT UNDER THE CIRCUMSTANCES OF THE CASE AND IN THE INTERESTS OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR HEARING, THIS DAY, THE COURT DELIVERED THE FOLLOWING:
JUDGMENT
In this appeal filed under Section 378(4) of Cr.P.C, the complainant has challenged the acquittal of respondent/accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short 'N.I. Act'), by the Session Court by reversing the conviction imposed by the trial Court. 2. For the sake of convenience, the parties are referred to by their rank before the trial Court.
Complainant filed the complaint against accused contending that in the first week of June 2009, accused approached the complainant for financial assistance for the purpose of his business and availed hand loan of Rs.6,50,000/- on 10.6.2009. He agreed to repay the same within 10 months and issued a post dated 27.05.2010 cheque for Rs.6,50,000/-. On the direction of the accused
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when complainant presented the cheque for realization, it was returned unpaid/dishonoured with endorsement "Debit is not allowed". Complainant got issued legal notice to the accused, requesting him to pay the amount due under the cheque. Despite service of notice, the accused has neither paid the amount due nor sent any reply and hence the complaint.
After due service of summons, the accused has appeared before the trial Court and contested the case by pleading not guilty to the plea recorded by the trial Court.
In order to prove the allegations against the accused, complainant got herself examined as PW-1 and relied upon Ex.P1 to 7.
During the course of his statement under Section 313 Cr.P.C, the accused has denied the incriminating evidence led by the complainant.
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In fact, the accused has stepped into the witness box and examined himself as DW-1. No documents are marked on behalf of the accused.
Vide the judgment and order dated 17.12.2012, the trial Court held the accused guilty of the of the charge and sentenced him to pay fine in a sum of Rs.7,00,000/- with default sentence. Out of the fine amount, a sum of Rs.6,90,000/- was ordered to be paid to the complainant by way of compensation.
Aggrieved by the same, the accused approached the Session Court in Crl.A.No.25011/2013. Vide the impugned judgment and order the Sessions Court has allowed the appeal, setting aside the judgment and order of the trial Court and acquitted the accused.
Aggrieved by the same the complainant is before this Court contending that the order of acquittal passed by the Session Court by reversing the findings of conviction recorded by the trial Court is highly arbitrary,
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capricious, perverse, illegal and the same is liable to be set aside. The Sessions Court has committed gross error in not appreciating the evidence in proper perspective. The findings of the Sessions Court are contrary to the evidence placed on record and as such it is liable to be set aside. The Sessions Court has totally ignored the evidence and documents produced by the complainant and has not given weight to the same. When the accused is not disputing the issue of cheque and his signature, the complainant has proved existence of legally recoverable debt and the Sessions Court has committed grave error in not considering the same. The Sessions Court has committed grave error in reversing the findings of the trial Court without proper appreciation of the evidence placed on record. There is no application of mind to the fact that the accused has failed to rebut the presumption under Section 139 of N.I Act. The Sessions Court has also not applied to the ratio in the decision of the Hon'ble Supreme Court in Rangappa Vs. Sri.Mohan (Rangappa)1.
1 (2010) 11 SCC 441
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The Sessions Court has also erred in observing that complainant had no financial capacity to lend loan of Rs.6,50,000/- especially when the accused has failed to rebut the evidence of complainant that she was in possession of Rs.10,00,000/- received from her husband, by selling the property. The Sessions Court is not justified in reversing the well reasoned judgment of the trial Court, solely on the ground that complainant has failed to prove her financial capacity. Viewed from any angle, the impugned judgment and order is not sustainable and pray to allow the appeal, set aside the judgment and order of the Sessions Court and restore the judgment and order of the trial Court.
On the other hand, learned counsel appearing for accused has supported the judgment and order passed by the Sessions Court and submitted that the husband of complainant and accused were friends and he used to go to the factory of accused and assist him and could lay his
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hands on the cheque book and utilizing one such a cheque, false complaint is filed. He also submitted that in the reply notice itself, at the earliest available opportunity, he has denied the alleged transaction and taken up a specific defence that the husband of complainant has misused one of the cheques and filed false complaint. He also submitted that at the trial the financial capacity of complainant is challenged and she has failed to prove her financial capacity and taking into consideration the oral and documentary evidence placed on record the Sessions Court has rightly reversed the judgment and order of the trial Court and sought for dismissal appeal also.
Heard elaborate arguments of both sides and perused the record.
Having regard to the fact that the accused admit that cheque in question belongs to him, drawn on his account maintained with his banker and it bears his signature, presumption under Section 139 of the N.I Act is operating in favour of the complainant, placing the initial
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burden on the accused to prove that the cheques were not issued towards repayment of any debt or liability and on the other hand to establish the circumstances in which the cheque has reached the hands of the complainant. In the reply notice, having denied the very transaction, naturally the accused has not disputed the financial capacity of complainant to lend him Rs.6,50,000/. However, at the trial he has challenged her financial capacity.
However, in John K.Abraham Vs. Simon C. Abraham & Anr (John K.Abraham)2, the Hon'ble Supreme Court held that in order to draw presumption under Sections 118 and 139 of N.I Act, the burden lies on the complainant to show that:
(i) She had the requisite funds for advancing the sum of money/loan in question to accused.
(ii) The issuance of cheque by accused in support of repayment of money advanced was true and
2 (2014) 2 SCC 236
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(iii) The accused was bound to make payment as had been agreed while issuing cheque in favour of the complainant.
As held by the Hon'ble Supreme Court in Tedhi Singh Vs Narayan Das Mahant (Tedhi Singh)3, where the accused has failed to send reply to the legal notice, challenging the financial capacity of the complainant, at the first instance, complainant need not prove his financial capacity. However, at the trial if the financial capacity of complainant is challenged, then it is for the complainant to prove the same. As noted earlier in the present case though the accused has sent reply, therein he has not challenged the financial capacity of complainant, but at trial he has challenged their financial capacity.
In Basalingappa Vs. Mudibasappa (Basalingappa)4, the Hon'ble Supreme Court held that when accused dispute the financial capacity of complainant to pay the amount and lead evidence to prove it and thereby
3 2022 SCC OnLine SC 302 4 (2019) 5 SCC 418
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probabilise his defence, then burden would be on the complainant to establish his financial capacity.
In fact in APS Forex vs Shakti International Fashion Linkers Pvt. Ltd (APS Forex)5, the Hon'ble Supreme Court held that when accused raises issue of financial capacity of complainant, in support of his probable defence, despite presumption operating in favour of complainant regarding legally enforceable debt under Section 139 of N.I. Act, onus shifts again on the complainant to prove her financial capacity by leading evidence, more particularly when it is a case of giving loan by cash and thereafter issue of cheque.
In Vijay Vs. Laxman and Anr (Vijay)6, K.Subramani Vs. K.Damadara Naidu (K.Subramani)7 and K.Prakashan Vs. P.K.Surenderan (K.Prakashan)8, also the Hon'ble Supreme Court held that the presumption under Section 139 of N.I. Act, is a rebuttable presumption and
5 (2020) 12 SCC 724 6 (2013) 3 SCC 86 7 (2015) 1 SCC 99 8 (2008) 1 SCC 258
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when accused rebut the same by preponderance of probabilities, it is for the complainant to prove his case beyond reasonable doubt including his financial capacity.
Keeping in mind the ratio in the above decisions of the Hon'ble Supreme Court and having regard to the fact that accused has challenged the financial capacity of complainant, at the outset it is necessary to examine whether the complainant has proved her financial capacity after which it would be necessary for the accused to prove his defence.
During her cross-examination, complainant has admitted that her late husband used to visit the factory of accused and assist him in his office work. However, she has denied that her husband used to do mechanical and other official work in the factory of accused and also looking after the cheque transaction in his factory. During the course of his evidence, the accused has deposed that, the husband of complainant namely late M Devaraj was his friend and earlier he and accused worked in VST Tillers
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and Tractors Ltd, for a period of 20 years and after resigning from the said factory, he started his own engineering works in the name and style of Satabdhe Engineering Works with his wife as Proprietor and he was the PA holder. He has also deposed that during his leisure time late Devaraj used to visit his factory and assist him.
Though the accused has deposed that he used to pay certain amount to the services rendered by late Devaraj, no such documents are produced. However, the evidence of accused coupled with
admission by complainant that the late husband of complainant used to regularly visit the factory of accused and assist him in the office work supports the defence of the accused that he was able to lay his hands on the cheque maintained by the accused.
Now coming to the defence of the accused that complainant never had the financial capacity to lend him hand loan in a sum of Rs.6,50,000/-. During the course of his evidence, the accused has specifically deposed that the
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complainant herself has taken bank loan for purchasing house and paying installments. Even her late husband had purchased a car on hire purchase and the installments were also being paid and in such situation, question of she lending hand loan of Rs.6,50,000/- would not arise. In fact, accused has cross-examined the complainant elaborately with regard to her financial capacity.
It is pertinent to note that complainant is a homemaker. She is not having any income or avocation of her own. With regard to her means to pay substantial sum of Rs.6,50,000/-, during her cross-examination complainant has deposed that her husband had land and getting income from them. About 10 years back, he had sold his site and the sale consideration was with her and utilising the same she has lent Rs.6,50,000/- to accused. She has also stated that neither herself nor her husband were Income Tax Assessees. Admittedly, the complainant has not produced any documents to show that her husband was owning lands and getting income and also
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that about 10 years back, he had sold a site and she was in possession of the said amount. The complainant has also not produced the passbook or account extract either of herself or her husband to show that they were having sufficient income.
The complainant has admitted that her husband had purchased a swift car by taking loan from the bank and during his lifetime housing loan was also availed and the installments are being paid by her. Despite her lengthy cross-examination challenging her capacity to lend Rs.6,50,000/- to the accused, the complainant has not chosen to produce any documents to prove her financial capacity. Thus, the complainant has failed to prove that at the relevant point of time she was in possession of Rs.6,50,000/- and lent the same to the accused.
When the complainant has failed to prove her financial capacity, as held in APS Forex, the burden has not shifted on the accused to rebut the presumption under Section 139 of N.I Act. The trial Court has accepted the
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case of the complainant only on the ground that the accused has failed to prove that the husband of complainant was working in his factory and he was being paid certain remuneration. Admittedly, the husband of complainant was not a permanent employee of accused and therefore, no records were maintained. May be for the service rendered by him, certain sum were being paid.
Anyhow, even in the absence of proof that he was paid certain sum for the services rendered by him, the fact remains that the complainant has failed to prove her financial capacity to lend exorbitant sum of Rs.6,50,000/. In fact, the admission elicited in the cross-examination of complainant establish the fact that complainant and his husband have borrowed loan from the bank, not only for construction/purchase of the house, but also for purchasing car and the said installments were being paid. When complainant has failed to prove her financial capacity and the burden has not shifted on the accused to
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rebut the presumption and Section 139 of N.I Act, the trial Court has erred in convicting the accused.
On the other hand on re-appreciation of the oral and documentary evidence placed on record, the Sessions Court has rightly interfered with the order passed by the trial Court and acquitted the accused. After going through the elaborate evidence led by both the parties, this Court is of the considered opinion that it is not a fit case to interfere with the impugned judgment and order passed by the Sessions Court. In the result, the appeal fails and accordingly the following: ORDER (i) Appeal filed by the complainant under Section 378(4) of Cr.P.C is dismissed. (ii) The impugned judgment and order dated 25.11.2014 in CrlA.No.25011/2013 on the file of FTC-III, Mayohall, Bengaluru, reversing the judgment and order of conviction dated 17.12.2012 imposed by
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the trial Court in C.C.No.35785/2010 on the file of XIV ACMM, Bengaluru is here by confirmed. (iii) The Registry is directed to send back the trial Court as well as Sessions Court records along with copy of this judgment forthwith.
Sd/- JUDGE
RR List No.: 1 Sl No.: 44