- 1 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JANUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL No. 754 OF 2015 BETWEEN: R. SADASHIVA REDDY S/O RAMAREDDY AGED ABOUT 57 YEARS RESIDING AT No.938 1ST FLOOR, 4TH CROSS K.N.EXTENSION YESHWANTHAPUR BENGALURU – 560 022. …APPELLANT (BY SRI KESHAV KUMAR, ADVOCATE) AND: SRI S. SUNDAR MURTHY S/O K.S. SUBRAMANYA SHASTRY AGED ABOUT 42 YEARS RESIDING AT No.21 SUPRITA NILAYA, VINAYAKA NAGAR CHIKKASANDAR, IN FRONT OF RAILWAY STATION CHIKKABANAVARA POST BENGALURU – 560 090. ALSO AVAILABLE AT SRI SANKASTAHARA GANAPATHI AYAPPA SWAMY SUBRAMANYA SWAMY TEMPLE SIDDEDAHALLI, NAGASANDRA POST OPP. STATE BANK OF INDIA HESSARAGHATTA MAIN ROAD BENGALURU – 560 073. …RESPONDENT (BY SRI S N RANGANATH, ADVOCATE) Digitally signed by HEMAVATHY GANGABYRAPPA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT ORDER DATED 15.04.2015 PASSED BY THE XVIII A.C.M.M., BANGALORE IN C.C.No.11791/2013 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT AND ETC., THIS APPEAL COMING ON FOR DICTATING JUDGMENT THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT 1. This appeal is filed by the appellant – complainant challenging the judgment of acquittal dated 15.04.2015 passed in C.C.No.11791/2013 by the XVIII Additional Chief Metropolitan Magistrate, Bengaluru, whereunder the respondent – accused has been acquitted of the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short hereinafter referred to as ‘N.I.Act’). 2. The brief facts of the appellant – complainant’s case is that, the respondent – accused approached the appellant – complainant during August, 2010 and demanded hand loan of Rs.10,00,000/- stating that he intends to purchase a property and had promised to repay the same within six months. Pursuant to the said request, - 3 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 the appellant – complainant lent Rs.10,00,000/- during the first week of September, 2010 as hand loan to the respondent – accused by cash. The respondent – accused in the month of January, 2010 for discharge of the said debt, issued a cheque dated 07.02.2013 for Rs.10,00,000/- drawn on State Bank of Mysuru, Rajajinagar Branch, Bengaluru in favour of the appellant – complainant. The appellant – complainant presented the said cheque for encashment and it came to be dishonoured with an endorsement – “funds insufficient”. The appellant – complainant got issued notice dated 07.03.2013. The said notice has been served on the respondent – accused. The respondent – accused had sent reply to the said notice. As the respondent – accused did not pay the cheque amount, the appellant – complainant filed a private complaint against the respondent – accused for the offence under Section 138 of the N.I.Act. The learned Magistrate took cognizance of the offence and registered C.C.No.11791/2013 against the respondent – accused for the offence under Section 138 of - 4 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 the N.I.Act. The plea of the respondent – accused has been recorded. The appellant – complainant, in order to establish his case, has examined himself as PW1 and got marked Exs.P1 to P9. The statement of the respondent – accused has been recorded under Section 313 of Cr.P.C. The respondent – accused has examined himself as DW1 and got examined one witness as DW2 and got marked Exs.D1 to D14. After hearing the parties, the learned Magistrate has formulated the points for consideration and passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged in this appeal by the appellant – complainant. 3. Heard learned counsel for the appellant – complainant and learned counsel for the respondent – accused. 4. Learned counsel for the appellant – complainant would contend that the respondent – accused had admitted his signature on the cheque – Ex.P1. Therefore, a presumption arises under Section 139 of the N.I.Act, - 5 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 that the cheque has been issued for making payment of legally enforceable debt. Exs.P8 and 9 – profit and loss account and the balance sheet and Income Tax return which itself would establish the financial capacity of the appellant – complainant to lend money to the respondent – accused. The respondent – accused has taken up the defence that he had given the cheque – Ex.P1 to the wife of the appellant – complainant namely Smt.Sunitha, as a security to the loan availed by Smt.Heeradevi and that has been misused by the appellant – complainant being husband of the said Smt.Sunitha. He further submits that the said Smt.Sunitha had filed a complaint and a case has been registered and the cheque number in that case is 161564 and the present cheque involved in this case is different and it bears the number 161563. Therefore, the said contention of the respondent – accused is false. On these grounds, he prayed for allowing the appeal and convicting the respondent – accused for the offence under Section 138 of the N.I. Act. - 6 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 5. Learned counsel for the respondent – accused would contend that the respondent – accused had availed loan from one Sri.Nagaraj as per the loan agreement which is at Ex.D7 and he had availed loan of Rs.8,00,000/- for purchase of the property and thereafter, he purchased the property. He contends that the respondent – accused had not borrowed any money from the appellant – complainant and that the cheques given by the respondent – accused to Smt.Sunitha as a security to the loan of Smt.Heeradevi had been misused. He submits that the said Smt.Sunitha had filed a complaint against this respondent – accused, which itself would establish that the cheques given by the respondent – accused have been misused by Smt.Sunitha and her husband who is the appellant – complainant herein. The appellant – complainant has not established his financial capacity to lend the huge amount of Rs.10,00,000/-. The respondent – accused has taken his defence at the initial stage while giving reply to the legal notice as per Ex.D1. The said cheque – Ex.P1 has been given to the said Smt.Sunitha, wife of the appellant – - 7 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 complainant during the year 2005 when Smt.Heeradevi availed loan of Rs.2,50,000/- from the said Smt.Sunitha. The said Smt.Sunitha has withdrawn the complaint filed by her against the respondent – accused which was pending in C.C.No.26137/2014 unconditionally and in the memo, it is stated that the respondent – accused had issued the cheque for loan of Rs.2,50,000/- as a security which has been availed by Smt.Heeradevi during the year 2005. Ex.D14 is a copy of the said complaint filed by Smt.Sunitha against the respondent – accused. Considering all these aspects, the respondent – accused had rebutted the presumption and considering the same, the learned Magistrate has passed the impugned judgment of acquittal. With this, he prayed for dismissal of the appeal. 6. Having heard the learned counsels, on perusal of the impugned judgment and the Trial Court records and considering the grounds urged, the following point arises for consideration; - 8 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 “Whether the learned Magistrate has erred in acquitting the respondent – accused for the offence under section 138 of the N.I.Act?” 7. My answer to the above point is in the negative for the following reasons; The respondent – accused has admitted his signature on Ex.P1 – cheque. As the respondent – accused has admitted his signature on the cheque, the presumption under Section 139 of the N.I.Act requires to be drawn. The said presumption is a rebuttable presumption. It is the defence of the respondent – accused that he had given the cheque to one Smt.Sunitha, wife of the appellant – complainant as a security to the loan availed by Smt.Heeradevi during the year 2005 from the said Smt.Sunitha in a sum of Rs.2,50,000/-. The said Smt.Sunitha has filed one case against this respondent – accused in C.C.No.26137/2014, a copy of the said complaint is at Ex.D14. On perusal of the contents of Ex.D14, it is clear that Smt.Sunitha, wife of the appellant – complainant had filed the said case for the offence under - 9 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 Section 138 of the N.I. Act against the respondent – accused, wherein it is stated that the respondent – accused had given the cheque as a security to the loan of Smt.Heeradevi and Smt.Heeradevi had availed loan of Rs.2,50,000/- from Smt.Sunitha during the year 2005. The said cheque involved in that case bears No.161564 and the present cheque involved in the present case bears No.161563. Considering the serial numbers of the cheques, they are issued at the same time / period. The appellant – complainant who is the Special Power of Attorney Holder of his wife Smt.Sunitha, had filed the joint affidavit and withdrawn the case filed against the respondent – accused in C.C.No.26137/2014. In the said joint affidavit, it is stated that the appellant – complainant Smt.Sunitha paid Rs.2,50,000/- to Smt.Heeradevi in the year 2005 for building development and the accused – respondent admits the same transaction and that till date, the said Smt.Heeradevi has not paid the principal amount to the appellant – complainant. Considering the said joint memo and the averments of the complaint in - 10 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 C.C.No.26137/2014, it is clear that the respondent – accused had issued the cheques to Smt.Sunitha as a security to the loan of Smt.Heeradevi obtained from Smt.Sunitha in the year 2005. It is the specific case of the respondent – accused that he had not availed any loan from the appellant – complainant and the cheque given to his wife has been misused by her. Considering the evidence of DW1 and the documents produced by him, the respondent – accused has rebutted the presumption raised under Section 139 of the N.I.Act. As the presumption is rebutted, the onus shifts on the appellant – complainant to prove the alleged lending and issue of the cheques towards payment of the alleged debt. Except the cheque – Ex.P1, the appellant – complainant has not produced any other document to establish that he had lent Rs.10,00,000/- by way of cash to the respondent – accused. Exs.P8 and 9 are the copies of profit and loss account and the balance sheet of the business of the appellant – complainant and the Income Tax returns of the year 2010-11. In the said balance sheet, there is no - 11 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 mention of the appellant – complainant lending Rs.10,00,000/- to the respondent – accused. In Ex.P9 – profit and loss account, the appellant – complainant had got profit of Rs.2,10,500/-. It is the contention of the appellant – complainant that he had taken Rs.10,00,000/- out of his business transactions and he had given the same, by way of cash to the respondent – accused. If the appellant – complainant had taken Rs.10,00,000/- out of his business transaction, he ought to have mentioned the same in the documents ie., profit and loss account and the balance sheet. 8. Ex.D7 – the loan agreement between Sri.Nagaraj and the respondent – accused dated 22.08.2010 would indicate that the respondent – accused had availed loan of Rs.8,00,000/- from the said Sri.Nagaraj during August, 2010 for purchase of the property. If the respondent – accused had executed loan agreement in favour of Sri.Nagaraj for loan of Rs.8,00,000/-, nothing prevented the appellant – complainant to get executed hand loan agreement as he is alleged to have lent huge amount of - 12 - NC: 2025:KHC:2797 CRL.A No. 754 of 2015 Rs.10,00,000/-. Considering all these aspects, the respondent – accused has rebutted the presumption raised under section 139 of the N.I.Act. As the presumption is rebutted, the onus shifts on the appellant – complainant to prove lending of Rs.10,00,000/- and issuance of the cheque towards making payment of debt. The appellant – complainant has not established the alleged lending of Rs.10,00,000/- to the respondent – accused. Considering all these aspects, the learned Magistrate has rightly acquitted the respondent – accused for the offence under Section 138 of the N.I.Act, by a well reasoned judgment. There are no grounds for allowing the appeal. In the result, the following; ORDER The appeal is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE GH List No.: 1 Sl No.: 19