- 1 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 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. 871 OF 2014 BETWEEN: SRI P KARUNAKARA GANDHI AGED 44 YEARS D/O LATE POOSWAMY No.236, 6TH CROSS BASHYAMNAGAR SRIRAMPURAM BANGALORE – 560 021. …APPELLANT (BY SRI S N RAMA PRASAD, ADVOCATE) AND: SRI RAJU RAO AGED 39 YEARS S/O LATE RUKMANGADA RAO No. 87, 2ND FLOOR, OLD POST OFFICE ROAD THAGARAJANAGAR, 2ND BLOCK NEAR: NAGASANDRA CIRCLE BANGALORE - 560 028. …RESPONDENT (BY SRI HARSHITHA K V RAJ, ADVOCATE) THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE ORDER DATED:19.9.2014 PASSED BY THE XX ACMM, BANGALORE IN C.C.No.3267/13 - Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT AND ETC., THIS APPEAL COMING ON FOR HEARING, 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 passed in C.C.No.3267/2013 by the XX Additional Chief Metropolitan Magistrate, Bengaluru, whereunder, the respondent – accused has been acquitted of the offence under Section 138 of the N.I.Act. 2. Case of the appellant – complainant in brief is as under; The appellant – complainant and the respondent – accused were well acquainted with each other from past several years. That on 16.08.2011, the respondent – accused had borrowed loan of Rs.2,00,000/- from the complainant and agreed to repay the same within four months. Even after lapse of eight months, the respondent - 3 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 – accused had failed to repay the amount. When the appellant – complainant demanded for repayment, the respondent – accused issued a cheque bearing No.908523 dated 12.10.2012 for Rs.2,00,000/- in favour of the appellant – complainant. When the appellant – complainant presented the said cheque for encashment, it came to be dishonoured with an endorsement “funds insufficient”. The appellant - complainant got issued the legal notice to the respondent – accused for the cheque amount. Inspite of service of notice, the respondent – accused had not paid the cheque amount. Therefore, the appellant – complainant has filed a private complaint against the respondent – accused for the offence under Section 138 of the N.I.Act. The learned Magistrate took cognizance and registered C.C.No.3267/2013 against the respondent – accused for the offence under Section 138 of the N.I.Act. The appellant – complainant in order to prove his case, examined himself of PW1 and got marked Exs.P1 to P7. The statement of the respondent – accused has been recorded under Section 313 of Cr.P.C. The - 4 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 respondent – accused examined himself his DW1 and got marked one document as Ex.D1. The learned Magistrate after hearing the arguments on both sides, has formulated the points for consideration and passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged by the appellant – complainant in this appeal. 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 Ex.P1 – cheque. As the respondent – accused had admitted his signature on Ex.P1 – cheque, a presumption under Section 139 of the N.I.Act that Ex.P1 – cheque had been issued for making payment of the debt requires to be drawn. The said presumption has not been rebutted by the respondent – accused. The respondent – accused has taken up the defence that he - 5 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 had issued Ex.P1 – cheque as a security in the hands of his elder brother Sri.Suresh Rao and he had given the same to the appellant – complainant and it had been misused by the appellant – complainant. The said defence has not been established by the respondent – accused by examining the said Sri.Suresh Rao, elder brother of the respondent – accused. The respondent – accused has admitted, he executing Ex.P6 – an undertaking to repay the amount borrowed to the appellant – complainant. As the presumption is not rebutted, the respondent – accused is required to be convicted for the offence under Section 138 of the N.I Act. With this, he prayed to allow the appeal and convict the respondent – accused for the offence punishable under Section 138 of the N.I.Act. 5. Learned counsel for the respondent – accused would contend that the appellant – complainant who has been examined as PW1, in his cross examination has admitted that the amount of lending in a sum of Rs.2,00,000/- has not been stated in Ex.P6. The appellant – complainant has - 6 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 not proved his capacity to lend Rs.2,00,000/-. Ex.P6 is not the stamp paper, but, it is a statement. Considering all these aspects, the learned Magistrate has rightly passed the judgment of acquittal. With this, she prayed to dismiss the appeal. 6. Having heard the learned counsels, this Court has perused the impugned judgment and the Trial Court records. Considering the grounds urged, the following point arises for consideration; “Whether the Trial Court has erred in acquitting the respondent – accused of the offence punishable under Section 138 of the N.I.Act?” 7. My answer to the above point is in the affirmative, for the following reasons; It is the specific case of the appellant – complainant that on 16.08.2011, the respondent – accused had borrowed Rs.2,00,000/- and agreed to repay the same within two months. In order to repay the said amount borrowed, the respondent – accused had issued Ex.P1 – - 7 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 cheque for Rs.2,00,000/-. The respondent – accused has admitted his signature on Ex.P1 – cheque. Therefore, a presumption under Section 139 of the N.I.Act that the cheque has been issued for making payment of debt has to be drawn. The said presumption is a rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probability. 8. On reading of cross examination of PW1, it is the defence of the respondent – accused that he had given Ex.P1 - signed blank cheque to his elder brother Sri.Suresh Rao and the appellant – complainant has taken the said cheque from Sri.Suresh Rao and filed the present case. The said suggestion has been denied by PW1 in his cross examination. In order to establish the said defence, the respondent – accused has not examined his elder brother Sri.Suresh Rao. 9. Ex.P6 is a writing, undertaking to pay the amount borrowed in the monthly instalments and it is addressed to the appellant – complainant. DW1 in his cross examination - 8 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 has admitted, he executing Ex.P6. In clarification, he has stated that Ex.P6 is executed in respect of the loan borrowed in a sum of Rs.1,000/- and Rs.2,000/-. But on reading the contents of Ex.P6, the respondent – accused had undertaken to repay in monthly installments, a sum of Rs.10,000/- and Rs.5,000/-. Therefore, the said contention of the respondent – accused that Ex.P6 has been executed in respect of loan of Rs.1,000/- and Rs.2,000/- appears to be false. 10. The statutory notice – Ex.P3 has been served on the respondent – accused. But the respondent – accused has not chosen to send any reply to the said notice putting forth his defence at the earliest. 11. PW1 in his cross examination has stated that he is getting salary of Rs.50,000/- per month and his wife is getting Rs.35,000/- per month. The said aspect has not been denied by the respondent – accused. Considering all these aspects, the respondent – accused has not rebutted the presumption drawn under Section 139 of the N.I.Act. - 9 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 As the presumption is not rebutted, the cheque issued as per Ex.P1 is in respect of the amount borrowed. Without considering all these aspects, the learned Magistrate has erred in passing the impugned judgment of acquittal. There is compliance of all the statutory requirements of an offence under Section 138 of the N.I.Act. Therefore, the respondent – accused requires to be convicted for the offence under Section 138 of the N.I.Act. In the result, the following; ORDER The appeal is allowed. The impugned judgment of acquittal dated 19.09.2014 passed in C.C.No.3267/2013 by the XX Additional Chief Metropolitan Magistrate, Bengaluru is set-aside. The respondent – accused is convicted for the offence under Section 138 of the N.I.Act and sentenced to pay fine of Rs.2,10,000/- and in default of payment of said fine, to undergo simple imprisonment for a period of six months. The respondent – accused shall deposit the fine amount within two months from this - 10 - NC: 2025:KHC:4840 CRL.A No. 871 of 2014 day. Out of the said fine amount, a sum of Rs.2,00,000/- is ordered to be paid as compensation to the appellant – complainant. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE GH List No.: 1 Sl No.: 46