- 1 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 3RD DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL No. 533 OF 2015 BETWEEN: H V JAGANNATHA AGED ABOUT 69 YEARS S/O SRI.H.R.VAGEESHA R/AT No.K-162, 19TH A MAIN 14TH CROSS, 1ST K BLOCK, RAJAJINAGAR BANGALORE – 560 010. …APPELLANT (BY SRI GURURAJ KULKARNI, ADVOCATE) AND: PRABHAKAR B J S/O B.K.JAYANNA No.206, B.R.I.COLONY, A.D.HALLI, BHASAVESHWARA NAGAR BANGALORE – 560 079. …RESPONDENT (BY SRI D P PRASANNA, ADVOCATE) THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE IMPUGNED JUDGMENT DATED 19.3.2015 PASSED BY THE XXIII A.C.M.M., BANGALORE IN C.C.No.29728/2010-ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT AND ETC., Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 THIS APPEAL COMING ON FOR DICTATING JUDGMENT THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by the complainant challenging the judgment of acquittal dated 19.03.2015 passed in C.C.No.29728/2010 by the XXIII Additional CMM, Bangalore, whereunder, the respondent/accused has been acquitted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (for short 'the Act'). 2. The case of the complainant is that he and accused are friends and accused had borrowed a sum of Rs.6,35,000/- from him, on different dates for the purpose of purchasing vehicles and for family necessities and whereas the respondent/accused for making payment of the said amount borrowed, has issued three cheques bearing No.618918 dated 26.11.2009 for Rs.15,000/-, cheque bearing No.618919 dated 26.12.2009 for Rs.15,000/- and cheque bearing No.618915 dated - 3 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 21.01.2010 for Rs.6,05,000/- in favour of the complainant. The complainant presented all the three cheques for encashment, that the said cheques were returned dishonoured with endorsement "Funds insufficient in the account of the accused". The complainant got issued legal notice to the respondent/accused calling upon him to pay the amount of the cheques and it has been served on him. The respondent/accused did not pay the amount of cheques and therefore, the appellant/complainant has filed complaint against the respondent/accused for offence under Section 138 of the Act. 3. Learned Magistrate has taken cognizance and registered C.C.No.29728/2010 against the respondent/accused for offence punishable under Section 138 of the N.I. Act. The plea of the respondent/accused has been recorded. The complainant has examined himself as PW.1 and got marked Exs.P1 to P8. The statement of the respondent/accused has been recorded - 4 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 under Section 313 of Code of Criminal Procedure. The respondent/accused has not led any defence evidence. Learned Magistrate after hearing the arguments on both sides has formulated points for consideration and passed the judgment of acquittal. The said judgment of acquittal has been challenged by the appellant/complainant in this appeal. 4. Heard learned counsel for appellant and learned counsel for respondent. 5. Learned counsel for appellant would contend that respondent/accused has admitted his signature on cheques Exs.P1 to P3 and therefore, presumption under Section 139 of the N.I. Act has to be drawn, that the cheques have been issued for making payment of legally enforceable debt. The said presumption is a rebuttal presumption. The respondent/accused, who had taken the defence that the cheques have been issued as a security to the loan of one Venkatesh availed from the complainant has not been established. Therefore, the said presumption - 5 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 is not rebutted. Without considering these aspects, the learned Magistrate has harped upon the capacity of the complainant and erred in acquitting the respondent/accused. On these grounds he prayed for allowing the appeal and convicting the respondent/accused for offence under Section 138 of the Act. 6. Learned counsel for the respondent submits that PW.1 in his cross-examination has admitted that one Venkatesh was working as a Driver under him, and he has availed loan from him. PW.1 in his cross-examination has denied the suggestion that accused has issued three signed cheques as a security to the loan availed by the said Venkatesh, from him. PW.1 in his cross examination has admitted that the cheques given by the accused were signed blank cheques and he has filled in the contents of the cheques. The said aspects itself probablises the defence of the respondent/accused, that appellant/complainant has not placed on record any document regarding his capacity to lend huge amount of - 6 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 Rs.6,35,000/-. That the appellant/ complainant has not produced any document to show that the respondent/accused has borrowed Rs.6,35,000/-. 7. Learned counsel for appellant further submits that the specific dates of borrowing are not stated either in the complaint, notice and evidence of PW.1. Respondent/accused has disputed the capacity of the appellant to lend huge amount of Rs.6,35,000/-. The appellant/complainant has not placed on record any material to show his capacity to lend the said huge amount. He placed reliance on the decision of the Hon'ble Apex Court in the case of SRI DATTATRAYA Vs. SHARANAPPA in 2024 INSC 586. 8. After considering all these aspects, the respondent/accused has rebutted the presumption drawn under Section 139 of the N.I. Act. The appellant/complainant has not established the alleged lending and accused borrowing Rs.6,35,000/-. - 7 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 9. After considering all these aspects, the learned Magistrate has rightly acquitted the respondent/accused for offence under Section 138 of N.I. Act, by a reasoned judgment. Thus he prayed for dismissal of the appeal. 10. Having heard the learned counsel for both the parties, the Court has perused the impugned judgment of acquittal and trial Court records. On considering the grounds urged, the following point arise for consideration:- "Whether the learned Magistrate has erred in acquitting the respondent/accused for the offence under Section 138 of N.I. Act?" 11. My answer to the above point is in the 'Negative' for the following reasons: It is the case of appellant/complainant that respondent/accused was his friend and he has borrowed a sum of Rs.6,35,000/- on different dates for purchase of vehicle and for family necessities. In order to repay the - 8 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 said amount borrowed the respondent/accused has issued three cheques i.e., Exs.P1 to P3. The respondent/accused has admitted his signature on cheques Exs.P1 to P3. The respondent/accused has disputed that the said cheques are issued for making payment of amount borrowed. The respondent/accused had denied that he borrowed Rs.6,35,000/- from the appellant/complainant. As the respondent/accused has admitted his signatures on cheques Exs.P1 to P3, a presumption has to be drawn that the cheques have been issued for making the payment of debt. The said presumption is a rebuttal presumption. The standard of proof for rebutting the said presumption is preponderance of probability. 12. The appellant/complainant has not stated the specific dates, on which the respondent/accused has borrowed amount and specific amount of borrowing on those dates. What is stated in the complaint is that accused has borrowed Rs.6,35,000/-. The dates of borrowing has not been stated in the complaint. PW.1 in his chief - 9 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 examination has also not stated the dates of borrowing. PW.1 in his cross-examination has stated that accused borrowed Rs.6,35,000/- between the years 2006 to 2009. PW.1 has stated that he cannot say on what dates, what amount has been borrowed by the respondent/accused. PW.1 in his cross-examination has stated that respondent is not his friend and not his relative, but in his examination-in-chief, he has stated that respondent/accused is his friend. Since the specific dates of borrowing is not stated, it is difficult to ascertain as to whether the debt is barred by limitation or not. 13. It is the specific defence of the respondent/accused that one Venkatesh has borrowed money from the appellant/complainant and for security of loan of said Venkatesh, the respondent/accused has issued three signed cheques Exs.P1 to P3 as a security. PW.1 in his cross-examination has admitted that said Venkatesh is working as a Driver with him. He further admitted that the said Venkatesh had availed loan from him. PW.1 also - 10 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 admitted that accused has given three signed blank cheques and he has filled in the contents in the said cheques. The very said admission given by PW.1 probabalizes the defence of respondent/accused. 14. The respondent/accused has disputed the capacity of the appellant/complainant to lend huge amount of Rs.6,35,000/-. The Hon’ble Apex Court in the case of DATTATREYA supra has observed at paragraph 30 as follows :- “30. Moreover, affirming the findings of the Trial Court, the High Court observed that while the signature of the Respondent on the cheque drawn by him as well as on the agreement between the parties herein stands admitted, in case where the concern of financial capacity of the creditor is raised on behalf of an accused, the same is to be discharged by the complainant through leading of cogent evidence.” - 11 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 15. In view of the above, the appellant/complainant has to establish his capacity to lend huge amount by cogent evidence. The appellant/complainant has not placed any material on record to establish his capacity to lend such a huge amount of Rs.6,35,000/-. 16. Considering all these aspects, the respondent/accused has rebutted the presumption drawn under Section 139 of the Act. As the presumption is rebutted the onus shifts on the appellant/complainant to prove the alleged lending of such huge amount. The complainant in order to establish that he lent Rs.6,35,000/- to the respondent/accused has not placed any evidence on record. He has also not placed any evidence on record to prove the capacity to lend such a huge amount. 17. Considering all these aspects, the learned Magistrate has rightly acquitted the respondent/accused for offence under Section 138 of the Act by a reasoned judgment. - 12 - NC: 2025:KHC:4762 CRL.A No. 533 of 2015 There are no grounds made out for setting aside the impugned judgment of acquittal. In the result, the appeal is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE NG List No.: 1 Sl No.: 18 CT: SM