- 1 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MRS JUSTICE M G UMA CRIMINAL APPEAL NO. 1102 OF 2018 BETWEEN: SMT. MEENA, D/O. SRI. HANUMANTHAPPA, AGED ABOUT 44 YEARS, R/AT NO.125, 2ND CROSS, 7TH MAIN, KAVERINAGAR, BANASHANKARI 2ND STAGE, BANGALORE - 560 070. …APPELLANT (BY SRI. N. SRIRAM REDDY., ADVOCATE) AND: SRI. B.S.NAGESH, M/S. NAGESH ENTERPRISES, AT NO.29/A, 2ND MAIN, N.R. COLONY, BANGALORE - 560 019. …RESPONDENT (BY SMT.VAIJAYANTHI MALA B., ADVOCATE) THIS CRL.A. IS FILED U/S.378(4) CR.P.C PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 11.04.2018, PASSED BY THE LEARNED XVI ACMM, AT BANGALORE IN C.C.NO.30211/2015, ACQUITTING THE RESPONDENT/ ACCUSED FOR THE OFFENCE P/U/S 138 OF THE N.I ACT. THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: Digitally signed by V N BADIGER Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 CORAM: HON'BLE MRS JUSTICE M G UMA ORAL JUDGMENT The appellant being the complainant is impugning the judgment dated 11.04.2018 passed in CC No.30211/2015 on the file of the learned XVI Additional Chief Metropolitan Magistrate, Bengaluru City, acquitting the respondent/accused for the offence punishable under Section 138 of Negotiable Instrument Act (for short the NI Act). 2. For the sake of convenience, the parties shall be referred to as per their rank and status before the Trial Court. 3. Brief facts of the case are that, the complainant filed the private complaint against the accused in PCR No.7811/2015 before the Trial Court alleging commission of offence punishable under Section 138 of NI Act. It is the contention of the complainant that she was knowing the accused very well and he approached the complainant during the first week of September 2014 for hand loan of Rs.15,00,000/- to purchase the property. Accordingly, the complainant had arranged Rs.9,50,000/- and paid it to the accused during same time. The accused assured to repay the same within six months. Later, the complainant approached - 3 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 the accused after six months to repay the loan amount during March 2015. The accused issued the cheque as per Ex.P1 dated 10.03.2015 for Rs.9,50,000/- towards discharge of legally enforceable debt. When the cheque was presented for encashment, the same was dishonoured as there was insufficient fund in the account of the accused. Legal notice was issued by the complainant notifying the accused regarding dishonour of the cheque and calling upon him to repay the cheque amount. The accused has taken an untenable defence by issuing reply as per Ex.P8. But had not repaid the cheque amount and thereby he has committed the offence punishable under Section 138 of NI Act. Therefore, the complainant requested the Trial Court to take cognizance of the offence and to initiate legal action. 4. The Trial Court took cognizance of the offence and registered CC No.30211/2015 against the accused. The accused appeared before the Trial Court and pleaded not guilty. The complainant examined herself as PW1 and got marked Exs.P1 to 8 in support of her contention. The accused has denied all the incriminating materials available on record in her statement recorded under Section 313 of Cr.PC, got examined himself as - 4 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 DW1 and got marked Ex.D1 in support of his defence. The Trial Court after taking into consideration all these materials on record came to the conclusion that the complainant is not successful in proving the guilt of the accused beyond reasonable doubt. Accordingly, the impugned judgment of acquittal came to be passed. Being aggrieved by the same, the complainant is before this Court. 5. Heard Sri. N.Sriram Reddy, learned counsel for the appellant and Smt. Vaijayanthi Mala.B., leaned counsel for the respondent. Perused the materials including the trail Court records. 6. Learned counsel for the complainant contended that the accused had borrowed an amount of Rs.9,50,000/- from the complainant during September 2014. When the complainant demanded back the amount, cheque as per Ex.P.1 was issued on 10.03.2015. When the cheque was presented for encashment, it was dishonoured as there was insufficient funds in the account of the accused as per the endorsement Ex.P3. As per Ex.P4, legal notice was issued to the accused, which was served on him as per Ex.P7. Instead of repaying the cheque amount, accused got issued reply notice as per Ex.P8 on - 5 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 14.05.2015. A specific defence was taken by the accused that he had borrowed only Rs.2,00,000/- during April 2015 agreeing to repay the same with 12% interest and he had paid interest up to date. It was also contended that the accused was ready to repay the principle amount of Rs.2,00,000/- with interest at 12% per month. It is contended that the complainant had insisted for issuance of blank cheque and accordingly, accused had issued blank cheque. It is the further contention of the accused that even though he was intending to repay the loan of Rs.2,00,000/-, the complainant made illegal demands and therefore, a police complaint was filed. Thus, it is contended that the complainant by misusing the blank signed cheque of accused, presented the same for encashment and committed the offence punishable under Section 420 of IPC. Even though, such defence was taken under Ex.P.8, which was dated 14.05.2015, the accused who is examined as DW1 has taken a contrary defence that he has repaid Rs.2,00,000/- on 05.04.2015, which was never the contention raised in Ex.P8. 7. Learned counsel submitted that when the accused admits issuance of cheque Ex.P.1 with his signature and when admittedly, said cheque was dishonoured as there was - 6 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 insufficient fund, legal notice was issued. Inspite of that, accused had not repaid the cheque amount. Thus, ingredients for offence punishable under Section 138 of NI act is complete. 8. It is submitted that the Trial Court even though referred to the decision of Hon'ble Apex Court in Rangappa Vs. Mohan1 wherein it is held that when the accused admits issuance of cheque with his signature, bare denial of passing of consideration does not hold good, it proceeded to conclude that the financial capacity of the complainant is one of the relevant factors to be taken into consideration and such capacity is to be proved by the complainant. Therefore, it was held that the case of the complainant suffers from serious doubts, without taking into consideration the legal presumption under Sections 118 and 139 of NI Act. Therefore, the impugned judgment of acquittal passed by the Trial Court suffers from serious illegality. Hence, the appeal is liable to be allowed. 9. Per Contra, learned counsel for the respondent submitted that lending of amount of Rs.9,50,000/- by the 1 AIR 2010 SC 1898 - 7 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 complainant is never proved. The financial capacity to lend the amount is also not proved. The accused has taken a specific defence while issuing reply notice as per Ex.P.8 that he had borrowed only Rs.2,00,000/- during the year 2014 and the same has already been repaid on 05.04.2015. Inspite of that, the cheques received by the complainant as security was not returned. One of the cheques was misused by the complainant by presenting the same after the accused lodged the complaint against the complainant with the police on 07.04.2015. 10. Learned counsel submitted that Ex.N(2) is the statement of the complainant submitted to the police in the complaint lodged by the accused, wherein the complainant categorically admitted receipt of four blank cheques as contented by the accused as security and also states that only Rs.3,00,000/- was due from the accused as on 11.04.2015. But the cheques for Rs.9,50,000/- was presented on 16.04.2015. These materials on record rebut the legal presumption and the Trial Court was right in acquitting the accused. Accordingly, she prays for dismissal of the petition. - 8 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 11. In view of the rival contentions urged by learned counsel for both the parties, the point that would arise for my consideration is: "Whether the impugned judgment of acquittal passed by the Trial Court suffers from perversity or illegality and calls for interference by this Court?" My answer to the above point is in the 'negative' and pass the following: REASONS 12. It is the contention of the complainant that she had lent an amount of Rs.9,50,000/- to the accused and towards repayment of the same, the cheque Ex.P1 dated 10.03.2015 for Rs.9,50,000/- was issued by the accused. When the same was presented for encashment, it was dishonored as there was 'insufficient funds'. Legal notice was issued calling upon the accused to repay the cheque amount, but instead of paying the cheque amount, an untenable reply was issued as per Ex.P8 and the accused committed an offence under Section 138 of Negotiable Instruments Act. 13. To prove his contention, the complainant was examined as PW.1 and got marked Exs.P1 to P8. During cross- - 9 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 examination of PW.1, Ex.N(2)-the statement of the complainant recorded by the police in the complaint filed by the accused before the police on 07.04.2015 produced as per Ex.D1, was tendered with the witness, which he denied. But strangely, during cross-examination of the accused there is no reference to the said statement. The statement refers to four cheques taken by the complainant as security, while granting the loan, which corroborates the defence taken by the accused. The statement further states that only Rs.3,00,000/- was due by the accused as on 11.04.2015. But strangely, the cheque Ex.P1 for Rs.9,50,000/- was presented for encashment on 16.04.2015 for encashment. There is no reasonable explanation for the same. 14. It is also pertinent to note that the complainant has filed the complaint with the police on 07.04.2015 alleging that the cheque in question is retained by the complainant illegally. It is thereafter, on 16.04.2015, Ex.P1-cheques was presented for encashment and it is dishonored as there was insufficient funds. The accused issued reply as per Ex.P8, specifically stating that he had approached the complainant on 05.04.2015 with cash of Rs.2,00,000/- and demanded the accused for the - 10 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 cheques given as security. When the cheques were not returned immediately, the complaint as per Ex.P1 came to be filed on 07.04.2015. On admission of the accused about the issuance of the cheque Ex.P1 with his signature, the legal presumptions u/s 118 and 139 of NI Act will arise. Even therefore it is contended that blank signed cheuqe was collected by the complainant as security, there is presumption of law in favour of the complainant. But the documents produced and the contentions taken by the accused probabilises his defence. When the accused is successful in probabilising his defence, the burden again shifts on the complainant to prove actual lending of the amount and existence of the legally enforceable debt. 15. The complainant has not produced any materials to substantiate his contentions regarding actual lending of the amount. Under such circumstances, a reasonable doubt will arise about the contention taken by the complainant, and the accused is entitled for the benefit of such defence. Therefore, I am of the considered opinion that the complainant is not successful in proving the guilt of the accused beyond reasonable doubt. - 11 - NC: 2025:KHC:7882 CRL.A No. 1102 of 2018 16. I have gone through the impugned judgment of acquittal passed by the Trial Court. The Trial Court has taken into consideration the oral and documentary evidence placed before it and has arrived at the right conclusion that the complainant is not successful in proving the guilt of the accused beyond reasonable doubt. By impugned judgment of acquittal, the presumption of innocence of the accused is doubled. I do not find any strong reasons to interfere with the same. Hence, I answer the above point in the ‘Negative’ and proceed to pass the following: ORDER The Criminal Appeal is dismissed. Sd/- (M G UMA) JUDGE PSJ,BH List No.: 2 Sl No.: 20