- 1 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE H.P.SANDESH CRIMINAL APPEAL NO.81 OF 2020 BETWEEN: SRI LOKESHA S/O KRISHNEGOWDA, AGED 40 YEARS, R/AT MADAPURA VILLAGE, H.D.KOTE TALUK, MYSURU DISTRICT-571 125 …APPELLANT (BY SRI GIRISH B BALADARE, ADVOCATE) AND: SRI BASAVEGOWDA S/O LATE SANNAMARIGOWDA, C/O CHIKKAMARIGOWDA, AGED ABOUT 56 YEARS, HERAGALLI VILLAGE, HAMPAPURA HOBLI, H.D.KOTE TALUK, MYSURU DISTRICT-571 125 …RESPONDENT THIS CRL.A. IS FILED U/S 378(4) OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 07.12.2019 PASSED BY THE CIVIL JUDGE AND J.M.F.C., H.D.KOTE IN C.C.NO.373/2013 AND ETC. Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE H.P.SANDESH ORAL JUDGMENT Heard the learned counsel appearing for the appellant. The respondent was served and unrepresented. 2. This appeal is filed by the complainant challenging the judgment of acquittal dated 07.12.2019 for the offence punishable under Section 138 of NI Act. 3. The factual matrix of the case of the complainant before the Trial Court that on 20.06.2012, the accused borrowed a loan of Rs.2,50,000/- from the complainant for his legal necessities and agreed to repay the same with interest at the rate of 18% p.a., within two months from the date of borrowing. When the complainant demanded to repay the loan, the accused instead of repaying the loan with interest, issued a cheque bearing No.785322 dated 25.08.2012 for a sum of Rs.2,50,000/- - 3 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 and when the said cheque was presented, the same was dishonoured with an endorsement ‘funds insufficient’. Thereafter, the complainant issued a notice to the accused and the same was acknowledged but reply was not given. Hence, filed the complaint. 4. The Trial Court taken cognizance and secured the accused and the accused did not plead guilty and claimed to be tried. In order prove the case of the complainant, he himself examined as PW1 and also got marked the documents at Ex.P1 to P4 and accused was subjected to 313 statement and examined himself as DW1 and not produced any documents. The Trial Court having considered both oral and documentary evidence placed on record comes to the conclusion that PW1 is cross- examined and stated that he is working with one Murthy to whom the accused claimed have given the cheque. If this is to be believed, the complainant could have summoned the Murthy and gave evidence that the accused has not given the cheque to Murthy. The - 4 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 complainant has failed to do so. The trial court taken note of the fact that no reply was given by the accused and also taken note of the fact that accused has not denied the signature on Ex.P1 and also taken note of the admission of DW1 wherein he deposed that he did not know the complainant, but, in the cross-examination of DW1, he stated that he was having acquaintance with the complainant from last 7 to 8 years. 5. Having taken note of this admission, the Trial Court held that on appreciation of both oral and documentary evidence placed on record, it discloses that the complainant has failed to prove the case beyond all reasonable doubt and cheque in question was issued by the accused towards discharge of legally enforceable debt. On the other hand, accused has raised a probable defence and raised doubtful circumstances in the evidence of PW1 that too touching upon the very financial lending capacity of the complainant and also the execution of Ex.P1 and - 5 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 acquitted the accused. Being aggrieved by the said acquittal order, the present appeal is filed. 6. The learned counsel for the appellant would vehemently contend that the case of the appellant that both of them are known to each other from several years and he borrowed a sum of Rs.2,50,000/- and on demand, cheque was given and same was dishonoured. The counsel would vehemently contend that when accused took the contention that he has given two cheques to one Murthy as security for loan transaction and loan liability was discharged but he has not taken the said cheques from said Murthy and said Murthy is set up by the accused, hence, the accused ought to have been examined said Murthy and not the complainant. The counsel also contend that the respondent has not produced any other material to establish his defence and not even mentioned the case number filed by Rajachari against him. The Trial Court, though the appellant denied that he is working in the hardware shop of Murthy, erroneously considered that - 6 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 the appellant is an employee of the said Murthy. The Trial Courtdoubted the case of the appellant due to non-taking of any document at the time of payment of Rs.2,50,000/- for non-production of bank statement of the appellant and no interest imposed on the loan amount. But the respondent not disputed Ex.P1 cheque and also his signature at Ex.P1 and hence, the Trial Court ought to have drawn the presumption under Section 139 of NI Act instead of that Trial Court comes to the conclusion that the complainant ought to have been examined Murthy and erroneously comes to the conclusion that accused had set up the probable defence and raised the doubtful circumstances. But no such doubtful circumstances was raised since when the notice was served upon him, he has not given any reply and ought to have set up his defence at the first instance when the notice was served on him. 7. The counsel in support of his arguments relied upon the judgment reported in 2022 LIVELAW (SC) 275 in the case of TEDHI SINGH vs NARAYAN DASS - 7 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 MAHANT wherein the Apex Court held that when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents, by pointing to the materials produced by the complainant himself, or through the cross examination of the witnesses of the complainant. 8. The counsel also relied upon the judgment passed in CRL. A.No.123/2021 (arising out of Special Leave Petition (Crl.) No.876/2018) in the case of M.S KALAMANI TEX AND ANOTHER vs P. BALASUBRAMANIAN and brought to notice of this Court - 8 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 paragraph 14 wherein discussed with regard to presumption is concerned and held that the statute mandates that once the signature of an accused on the cheque is established, then these ‘reverse onus’ clauses become operative and the Apex Court relied upon the decision reported in (2012) 18 SCC 106 in the case of ROHITBHAI JIVANLAL PATEL vs STATE OF GUJARAT. The counsel also brought to notice of this Court paragraph 15, wherein it is held that when the signature is admitted on the cheque and the deed, the trial court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The Apex Court held that when a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated and in this regard, the Apex Court relied upon the judgment reported in (2019) 4 SCC 197 in the case of BIR SINGH vs MUKESH KUMAR wherein it is held that even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of - 9 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 the NI Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. The counsel for the appellant would contend that the trial court inspite of relied upon this judgment, committed an error in passing such an order of acquittal. 9. Having heard the learned counsel for the appellant and also on perusal of the material available on record and considering the principles laid down in the judgments referred supra, the points that would arise for the consideration of this Court are; 1. Whether the trial court committed an error in acquitting the accused and whether it requires interference of this Court? 2. What order? Point No.1 10. Having heard the learned counsel for the appellant and also on perusal of the material available on record, it discloses that the case of the complainant before - 10 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 the trial court that the accused had borrowed an amount of Rs.2,50,000/- from him agreeing to repay the same with 18 per cent interest and when the accused did not repay the amount, on demand, he had issued a cheque. It is not in dispute that the said cheque was presented and same was dishonoured and hence, notice was served. It is important to note that when notice was issued and the same was served on the accused but no reply was given by the accused. However, the accused admits issuance of cheque and also his signature on the cheque. But his contention is that the said cheque was given to one Murthy and this complainant was working in the hardware shop of the said Murthy and also contend that he was having a transaction with the said Murthy and he gave two cheques to said Murthy and both the cheques were misused and two cases were filed through Lokesh and Rajachari and the case filed by the Rajachari is also pending before the very same court. In the cross- examination he admits that he studied up to 8th standard and also admits issuance of cheque and no reply was - 11 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 given. He categorically admits that when summons was issued, he did not appear for a period of one year and only on issuance of NBW, he has appeared before the trial court. He did not produce any document to show that he was transacted with Murhty and though earlier, he contend that he was not having acquaintance with the complainant but in the cross examination, he admits that he knows the complainant from 7 to 8 years. He claims that he had supplied 45 quintal of turmeric but he has not produced any document in this regard and he has not given any compliant for having misused the cheque. 11. Having re-assessed the answer elicited from the mouth of DW1, it is clear the he did not disputes the issuance of cheque and his signature on the cheque and he has not given any reply. The accused though contend that he was having transaction with Murthy but no document is placed before the Court to show that he had supplied turmeric or any other transaction and only contend that he is having transaction with Murthy and - 12 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 cheque was misused. The trial court committed an error in coming to the conclusion that when the accused took the defence that he had transacted with Murthy, the complainant ought to have examined the Murthy. But the question of examining the Murthy by the complainant does not arise since the defence was taken by the accused that he had transacted with the said Murthy and hence, the accused ought to have examined the Murthy and even he refused to appear before the court, would have summoned through the court and same has not been done. Apart from that when the notice was issued, if really the accused had not transacted with the complainant, he would have given reply to the notice. The principles laid down in the judgments referred supra, it is clear that when the notice was served, ought to have taken note that there was a presumption. 12. In the case on hand also when the cheque is admitted by the accused, ought to have drawn the presumption. But the trial court comes to the conclusion - 13 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 that the accused had set up a probable defence. But the accused except examining himself and stating that the complainant was working with the said Murthy, nothing is placed on record. Apart from that when the accused took the defence that he had transacted with Murthy, he ought to have produced cogent evidence before the court but nothing is placed on record and when the accused took the defence that he had transacted with the Murthy, the burden lies on him, not on the complainant. But the trial court committed an error in coming to the conclusion that the complainant has not examined Murthy. 13. In the judgment of M/S KALAMANI TEX AND ANOTHER referred supra, the Apex Court discussed with regard to presumption under Section 139 of NI Act and also held that when probable defence is made out by the complainant, the presumption ought to have been drawn in favour of the complainant. In this judgment, the Apex Court also relied upon the case of BIR SINGH referred supra wherein the Apex Court held that the burden is on - 14 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 the accused to prove that there was no legally recoverable debt. In the case of TENDI SINGH, the Apex Court held that when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. Having considered the principles laid down in the judgments referred supra, this court is of the opinion that the trial court has not considered the material on record in a proper perspective. Hence, the very approach of the trial court is erroneous since the trial court comes to the conclusion that the defence theory of the accused has proved without any cogent evidence. Hence, the order of the trial court requires interference. Accordingly, I answer the above point as affirmative. Point No.2 14. In view of the discussions made above, I pass the following - 15 - NC: 2025:KHC:9025 CRL.A No. 81 of 2020 ORDER The appeal is allowed. The impugned judgment of acquittal dated 07.12.2019 passed in C.C.No.373/2013 is set aside. Consequently, the accused is convicted for the offence punishable under Section 138 of NI Act. The accused is directed to pay a fine of Rs.2,70,000/- and sentenced to undergo simple imprisonment for a period of six months in case of default of payment of compensation. Out of the said amount, Rs.5,000/- shall vest with the State and remaining amount shall be paid to the complainant on proper identification. Registry is directed to send the records to the trial court forthwith. Sd/- (H.P.SANDESH) JUDGE SN