Appeal against Section 138 of Negotiable Instruments Act dismissed: Karnataka High Court

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15TH DAY OF DECEMBER 2021 THE HON’BLE MR. JUSTICE MOHAMMAD NAWAZ CRIMINAL APPEAL NO.1158 OF 2018 BY SRI V.B.SIDDARAMAIAH ADVOCATE] … APPELLANT SRI T.R.NAGARAJU S O RAMAIAH AGED ABOUT 38 YEARS R O TAVARAKERE VILLAGE SIRA TALUK 572 139 TUMAKURU DISTRICT SRI SANNAHONNAPPA S O GOVINDAPPA AGED ABOUT 61 YEARS R O TAVARAKERE VILLAGE SIRA TALUK 572 139 TUMAKURU DISTRICT RETIRED AS PHYSICAL TEACHER GOVT SCHOOL HUNASEHALLI VILLAGE SIRA TALUK TUMAKURU DISTRICT … RESPONDENT BY SRI SHIVARUDRAPPA SHETKAR ADVOCATE] THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT DATED 08.06.2018 PASSED BY THE ADDITIONAL CIVIL JUDGE AND JMFC SIRA IN C.C.NO.1923 2012 ACQUITTING THE RESPONDENT ACCUSED FOR THE OFFENCE P U S 138 OF N.I. ACT. THIS CRIMINAL APPEAL COMING ON FOR ADMISSION THROUGH PHYSICAL HEARING VIDEO CONFERENCE THIS DAY THE COURT DELIVERED THE FOLLOWING: This appeal is against the judgment and order of acquittal passed by the trial Court acquitting the accused respondent of an offence punishable under Section 138 of Negotiable Instruments Act 1881 (hereinafter referred to as ‘N.I Act’ for short). Heard the learned counsel for appellant and learned counsel for respondent and perused the material on record. The gist of the complaint complainant and the accused are known to each other. In the first week of October 2011 the accused for the purpose of his legal necessity requested the complainant to pay a sum of Rs.3 00 000 and therefore the complainant paid the said amount to him on 15.10.2011. The accused had agreed to repay the amount within two months but he did not keep his promise and became a defaulter. After several requests accused issued a cheque bearing No. 523617 dated 20.12.2011 for the said amount drawn on Canara Bank Tavarekere Sira Taluk Tumkur District. The said cheque was presented to the bank as requested by the accused through his banker namely Kaveri Kalpatharu Grameena Bank Sira on 05.01.2012 for encashment. However the said cheque was dishonoured on 14.01.2012 for funds insufficient. The same was informed to the complainant by his banker on 18.01.2012. Thereafter the complainant issued a legal notice to the accused on 24.01.2012 by RPAD and inspite of receipt of the notice accused failed to reply to the said notice and also failed to repay the amount mentioned in the cheque within the stipulated time and therefore the accused committed an offence under Section 138 of N.I. Act. The specific defence taken by the accused before the trial Court is that there was financial transaction between himself and complainant’s parents. On 25.03.2009 he entered into an agreement as per Ex.D1 with complainant’s mother namely Indramma and received a sum of Rs.1 10 000 . In this connection he issued the cheque in question as security. He repaid the loan amount of Rs.1 10 000 to Indramma but the cheque was not returned as such he issued Ex.D2 notice. Instead of returning the said cheque the same was presented by the complainant. It is also contended that the complainant had no financial capacity to lend such a huge amount to the accused and there was no transaction between the complainant and accused. Learned counsel for appellant has contended that it is not disputed by the accused that the cheque does not belong to him and even the signature on the cheque is also not disputed and therefore the presumption under Section 139 of N.I. Act has to be raised when the dishonour of cheque is established. He contends that Ex.D1 stated to be the agreement entered between the accused and complainant’s mother has not been proved since one of the signatory to the said agreement namely K. Adimurthy has not been examined by the defence. He therefore contends that the trial Court was not proper in acquitting the accused relying on the documents marked by the defence. If it is proved that the cheque belong to the accused and if the signature in the cheque is also not disputed then a legal presumption would arise in favour of the complainant that the said cheque has been issued by the accused in discharge of a debt or liability. However the said presumption is rebuttable in nature. In the case on hand the specific defence taken by the accused is that the cheque in question marked as Ex.P1 was issued as security to complainant’s mother at the time of availing loan of Rs.1 10 000 from her and inspite of repaying the said loan amount the cheque was not returned and it was misused by the complainant. The defence has got marked Ex.D1. As per the said document the accused received a sum of Rs.1 10 000 from Indramma i.e. complainant’s mother on 15.05.2008. The accused has got examined DW.2 i.e. wife of one K. Adimurthy who is a witness to the said document Ex.D1. DW.2 in her evidence has stated that she is aware that there was financial transaction between the accused and complainant’s parents and in this connection Ex.D1 was executed on 08.04.2009 and her husband K. Adimurthy is a signatory to the said document. She has identified the said signature. In the cross examination it is not disputed by the complainant the she is not the wife of K. Adimurthy. PW.1 has admitted in his cross examination that the accused was doing financial transaction with his parents. It is relevant to see that the cheque number mentioned in Ex.D1 is the same cheque alleged to have been issued by the accused to the complainant appellant. Further the defence has got marked Ex.D2 a notice issued by the accused to parents of the complainant for returning the said cheque No.523617. It is clearly mentioned in the said notice that on 15.05.2008 the accused received a sum of Rs.1 10 000 from them for interest at 5% and at that time the said cheque was given as security and inspite of receipt of full amount the cheque was not returned. The said notice at Ex.D2 is dated 05.07.2010 which is much prior to the presentation of the cheque by the complainant. Hence the complainant’s case that the accused approached him in the month of first week of October 2011 and requested for a sum of Rs.3 00 000 and he paid the said amount on 15.10.2011 and in discharge of the said liability the accused issued the cheque in question appears to be By adducing defence evidence the accused has been able to rebut the presumption available in favour of the complainant and therefore the findings recorded by the trial Court cannot be said to be either perverse or illegal. Hence the appeal fails. Accordingly it is dismissed. Sd JUDGE HB 

Summary: Criminal appeal is dismissed by the court, against the acquittal of accused for the offence, punishable under section 138 of Negotiable Instrument Act. This was upheld by High court of Karnataka through the learned bench led by Honourable MR. JUSTICE MOHA.MMAD NAWAZ in case of SRI T.R.NAGARAJU vs SRI SANNAHONNAPPA ( criminal appeal no. 1158 of 2018) on 15th December 2021. Brief facts of the case are that the Complainant and the accused are known to each other. In the first week of October 2011, the accused for the purpose of his legal necessity requested the Complainant to pay a sum of Rs.3,00,000/- and therefore the complainant paid the said amount to him on 15.10.2011. The accused had agreed to repay the amount within two months but he didn’t keep his promise and became a defaulter. After several requests, accused issued a cheque bearing No. 523617 dated 20.12.2011 for the said amount, drawn on Canara Bank, Tavarekere, Sira Taluk, Tumkur District. The said cheque was presented to the bank as requested by the accused, through his banker namely Kaveri Kalpatharu Grameena Bank, Sira on 05.01.2012 for encashment. However, the said cheque was dishonoured on 14.01.2012 for funds insufficient. The same was informed to the complainant by his banker on 18.01.2012. Thereafter, of complainant issued a legal notice to the accused on 24.01.2012 by RPAD and inspite of receipt of the notice, accused failed to reply to the said notice and also failed to repay the amount mentioned in the cheque within the stipulated time and therefore the accused committed an offence under Section 138 of N.I. Act. Then the defence taken by the accused Before the trial Court is that there was financial transaction Between himself and complainant’s parents. On 25.03.2009, he entered into an agreement as per Ex.D1with complainant’s mother namely Indramma and received A sum of Rs.1,10,000/-. In this connection, he issued the Cheque in question as security. He repaid the loan amount Of Rs.1,10,000/- to Indramma, but the cheque was not Returned, as such he issued Ex.D2- notice. Instead of Returning the said cheque, the same was presented by the Complainant. It is also contended that the complainant had No financial capacity to lend such a huge amount to the Accused and there was no transaction between the Complainant and accused. Learned counsel for appellant has contended That it is not disputed by the accused that the cheque does Not belong to him and even the signature on the cheque is Also not disputed and therefore the presumption under Section 139 of N.I. Act has to be raised, when the Dishonour of cheque is established. He contends that Ex.D1 stated to be the agreement entered between the Accused and complainant’s mother has not been proved Since one of the signatory to the said agreement namely K.Adimurthy has not been examined by the defence. He therefore contends that the trial Court was not proper in acquitting the accused relying on the documents marked by the defence. If it is proved that the cheque belong to the Accused and if the signature in the cheque is also not Disputed, then a legal presumption would arise in favour of The complainant that the said cheque has been issued by The accused in discharge of a debt or liability. However, The said presumption is rebuttable in nature. In the case On hand, the specific defence taken by the accused is that The cheque in question marked as Ex.P1 was issued as Security to complainant’s mother at the time of availing Loan of Rs.1,10,000/- from her and inspite of repaying the Said loan amount, the cheque was not returned and it was Misused by the complainant. The defence has got marked Ex.D1. As per the Said document the accused received a sum of Rs.1,10,000/- from Indramma i.e., complainant’s mother On 15.05.2008. The accused has got examined DW.2 that is Wife of one K. Adimurthy who is a witness to the said document-Ex.D1. DW.2 in her evidence has stated that she is aware that there was financial transaction between the accused and complainant’s parents and in this connection Ex.D1 was executed on 08.04.2009 and her husband K. Adimurthy is a signatory to the said document. She has identified the said signature. In the cross-examination it is not disputed by the complainant the she is not the wife of K. Adimurthy. PW.1 has admitted in his cross-examination that the accused was doing financial transaction with his parents. It is relevant to see that the cheque number Mentioned in Ex.D1 is the same cheque alleged to have Been issued by the accused to the appellant. Further, the defence has got marked Ex.D2, a notice issued By the accused to parents of the complainant for returning The said cheque No.523617. It is clearly mentioned in the Said notice that on 15.05.2008, the accused received a sum Of Rs.1,10,000/- from them for interest at 5% and at that Time the said cheque was given as security and inspite of Receipt of full amount the cheque was not returned. The said notice at Ex.D2 is dated 05.07.2010, which is much prior to the presentation of the cheque by the complainant. Hence, the complainant’s case that the accused approached him in the month of first week of October 2011 and requested for a sum of Rs.3,00,000/- and he paid the said amount on 15.10.2011 and in discharge of the said liability the accused issued the cheque in question appears to be doubtful. After Considering all the facts, court decided to dismiss the appeal because the evidence cited by appealant is not sufficient, the accused has been able to rebut the presumption available in favour of the complainant and therefore, the findings recorded by the Trial Court cannot be said to be either perverse or illegal. 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