- 1 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 5TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE RAJESH RAI K CRIMINAL APPEAL NO. 1119 OF 2014 (A) BETWEEN: SRI. T. MANJUNATH S/O V. THIMMAIAH, AGED ABOUT 45 YEARS, R/AT NO.15, SRI LAKSHMI VENKATESHWARA NILAYA, 3RD CROSS, SRIRAMAPPA LAYOUT, TAVAREKERE, DRC POST, BANGALORE-560 029. …APPELLANT (BY SRI. K.B CHANDRASHEKAR SWAMY, ADVOCATE) AND: SRI. C. SIDDAPPA (I.T.I DRIVER) S/O CHINNAPPA AGED ABOUT 50 YEARS, R/AT NO.29, CHIKKASWAMY LAYOUT, 5TH CROSS, J.P NAGAR, 6TH STAGE, JARAGANAHALLI, BANGALORE ALSO AT: SRI. C. SIDDAPPA, (I.T.I DRIVER) R/AT DORVANINAGAR, OLD MADRAS ROAD, K.R. PURAM, BANGALORE-560 016. …RESPONDENT (BY SRI. PRAVEEN HEGDE, ADVOCATE) THIS CRL.A. IS FILED U/S.378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:03.11.2014 PASSED BY THE Digitally signed by MAYAGAIAH VINUTHA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 XX-ACMM, BANGALORE IN C.C.NO.25287/2010 - ACQUITING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S 138 OF N.I. ACT., THIS APPEAL, COMING ON FOR HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE RAJESH RAI K ORAL JUDGMENT This appeal is preferred against the acquittal order passed in C.C.No.25287/2010 dated 03.11.2014 by the XX Additional Chief Metropolitan Magistrate, Bengaluru, whereby the learned Magistrate acquitted the accused/respondent for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'NI Act'). 2. For the sake of convenience, the parties are referred to as they were referred to before the Court below. 3. The brief facts of the case are as under: On 08.10.2009, the appellant/complainant lent a hand loan of Rs.10 lakh to the accused/respondent subject to re-payment of the same within three months. Subsequently, the accused failed to repay the said amount. As such, the complainant demanded for re-payment and finally, on 03.02.2010, the accused issued a cheque bearing No.125647 dated 04.02.2010 for a sum of Rs.10 lakh in favour of the - 3 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 complainant drawn on State Bank of India, Doravaninagar Branch, Bengaluru as per Ex.P1. When the complainant presented the said cheque for realization through his bank i.e., Karnataka Bank Limited, BTM Layout Branch, the said cheque was dishonored stating 'Funds Insufficient' and the same was returned with bank memo dated 05.02.2010. The said fact was informed by the complainant to the accused. Thereafter, on 18.03.2010 the complainant issued a legal notice to the accused through RPAD and UCP, the said legal notice sent through UCP was served on the accused. Despite the legal notice being issued on the accused, he had failed to pay the cheque amount. Since the accused failed to make payment, the complainant filed a private complaint against the accused before the learned Magistrate under Section 200 of Cr.P.C. for the offence punishable under Section 138 of NI Act. 4. Following the service of notice, the accused/respondent appeared before the learned Magistrate and thereby, the learned Magistrate tried the case. 5. In order to prove the case of the complainant, he examined himself as PW.1 and marked 12 documents as Exs.P1 - 4 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 to P12. The accused was examined as DW.1 and examined two other witnesses as DW.2 and DW.3. 6. On assessment of the oral and documentary evidence, learned Magistrate acquitted the accused for the offence punishable under Section 138 of NI Act. The said judgment is challenged under this appeal by the complainant. 7. I have heard the learned counsel Sri. K.B.Chandrashekar Swamy for the appellant and the learned counsel Sri. Praveen Hegde for the respondent/accused. 8. The primary contention of the learned counsel for the appellant is that the Trial Court has collectively failed to appreciate the evidence available on record in right perspective and passed the impugned judgment which is liable to be set aside. By enunciating his arguments, he contended that PW.1- complianant has categorically deposed in respect of lending of hand loan of Rs.10 lakh to the accused on 08.10.2009 and since the accused failed to repay the same, on demand, the accused had issued Ex.P1 i.e., cheque dated 04.02.2010 for a sum of Rs. 10 lakh on 03.02.2010. Thereafter, the said cheque was presented and the same was returned stating 'funds insufficient'. Though the legal notice as per Ex.P4 issued by the - 5 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 complainant was served to the accused, he failed to reply to the said legal notice. Hence, the issuance of cheque by the accused and the signature affixed on the cheque is not in dispute in this case. As such, the complainant has successfully proved the initial presumption under Section 139 of NI Act. Nevertheless, the accused failed to rebut such presumption with probable defense or by documents. He also contended that though the complainant was cross-examined by the accused at length, nothing worthwhile was elicited from him to disbelieve his evidence. On the other hand, in the cross-examination, the accused suggested that the cheque in question was issued by the accused himself on a lapse of three months from the date of lending the money. Further, the evidence of DW.1 to DW.3 clearly contradicts each other. As such, the same cannot be relied to disbelieve the evidence of PW.1-complianant. Hence, the learned Magistrate has erred while appreciating the evidence and in acquitting the accused for the charges under Section 138 of NI Act. Accordingly, he prays to allow the appeal by setting-aside the impugned judgment. 9. In order to buttress his arguments, he relied on the following judgments: - 6 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 (i) Rajesh Jain v. Ajay Singh [(2023) 10 SCC 148] (ii) Sri Yogesh Poojary v. Sri K.Shankara Bhat [ILR 2019 KAR 493] (iii) T.P.Murugan (Dead) Through Legal Representatives v. Bojan [(2018) 8 SCC 469] (iv) Sri S.M.Nataraja v. Sri B.M.Prakash [ILR 2018 KAR 5431] 10. Per contra, the learned counsel for the respondent/accused submitted that the judgment challenged under this appeal does not suffer from perversity or illegality since the learned Magistrate has rightly appreciated the evidence available on record that the complainant failed to prove his lending capacity of a sum of Rs.10 lakh and subsequent issuance of cheque by the accused for Rs.10 lakh to him. According to the learned counsel, at no point of time, the accused had availed hand loan from the complainant, per contra, he had obtained a hand loan of Rs.20,000/- from DW.3 and to repay the said amount, the accused had issued Ex.P1 i.e., the cheque in question to DW.3 and subsequently, DW.3 in turn handed over Ex.P1 to PW.1-complainant. The said aspect was admitted by DW.3 in his evidence and to that effect, a - 7 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 Panchayath was held in the Mutt of DW.2, who also admitted the said Panchayath in his evidence. Further, the complainant also failed to place any credible evidence to establish that he had the lending capacity to lend a sum of Rs.10 lakh to the accused. In such circumstances, the learned Magistrate has rightly dismissed the complaint. Hence, the impugned judgment does not call for any interference by this Court. Accordingly, the learned counsel for the respondent prays to dismiss the appeal. 11. Having heard the learned counsel for the respective parties, the sole point that arise for my consideration is: "Whether the learned Magistrate is justified in acquitting the accused for the offence punishable under Section 138 of NI Act and whether any interference is required in the impugned judgment? 12. On careful perusal of the entire evidence and documents made available before me, it could be gathered that according to PW.1, he lent a hand loan of Rs.10 lakh to the accused on 08.10.2009 and the accused issued cheque for repayment of the said hand loan on 03.02.2010. Subsequently, the said cheque was presented by the complainant and the same was dishonored stating 'funds insufficient'. Accordingly, - 8 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 he issued legal notice and lodged a private complaint. In such circumstances, the cheque in question i.e., Ex.P1 and also all the statutory requirement is fulfilled by the complainant. It is a settled position of law that once the cheque has been issued and the signature of the accused on the cheque is admitted, the initial presumption under Sections 118 and 138 of NI Act favours the complainant. Nevertheless, the said presumption can be rebutted by the accused with probable defence i.e., preponderance and probability. 13. In the instant case, the accused at no point of time, received a hand loan of Rs.10 lakh from the complainant and Ex.P1 i.e., cheque in question was not issued for repayment of the said hand loan. According to him, he received a hand loan of Rs.20,000/- from DW.3 and subsequently, he failed to repay the same. As such, he had issued a blank cheque to DW.3 and later DW.3 in turn handed over the said cheque to PW.1 i.e., the complainant and the complainant presented the same for Rs.10 lakh. To substantiate the said defence, the accused examined himself as DW.1 along with other two witnesses i.e., DW.2 and DW.3. - 9 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 14. On careful perusal of the evidence of DW.3 one Thippare Gowda, has categorically deposed in his evidence that the accused has availed a hand loan of Rs.20,000/- from him on 02.01.2010 and the accused failed to repay the same. While receiving the said amount for security purpose, he issued a blank cheque-Ex.P1. Subsequently, he handed over the said cheque to PW.1-Manjunath and Manjunath in turn presented the said cheque for Rs.10 lakh and the same was dishonored. Further, DW.3 also admitted that after filing the case, a compromise was sought in the Mutt of DW.2, wherein the accused admitted to pay a sum of Rs.50,000/- to DW.3 and DW.2 requested DW.3 to persuade PW.1 to withdraw the compliant. However, the said panchayath did not materialise. As such, the complainant initiated the case. Further to substantiate the said evidence of DW.3, DW.2-Swamiji of Jangama Mutt deposed in the evidence that in the year 2012, DW.3 approached him seeking to amicably compromise the case pertaining to the cheque issued by the accused in favour of DW.3. In the said compromise, DW.1 was present and he agreed to pay a sum of Rs.50,000/- to DW.3 and requested DW.3 to withdraw the cheque case filed by the complainant against DW.1. Hence, on careful examination of the evidence of - 10 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 DW.1 to DW.3, there is a clear corroboration with issuance of Ex.P1-Cheque by the accused to DW.3 and DW.3 in turn handed over the said cheque to the complainant. 15. Regarding the lending capacity of the complainant i.e., a sum of Rs.10 lakh to the accused is concerned, albeit PW.1 has stated in his evidence that he was active in construction business and thereby he became acquainted with the accused and lent him a hand loan of Rs.10 lakh. According to the complainant, he paid the said amount by way of cash to the accused on 08.10.2009. However, at the time of payment of the said amount, he admitted that he has not received any document including cheque in question. According to him, the cheque-Ex.P1 was issued after lapse a of three months from the date of lending the money. Hence, on perusal of this aspect of the matter, doubt arises in the mind of this Court that whether the complainant has paid the huge amount of Rs.10 lakh to the accused without executing the document including the cheque in question for a period of three months. Admittedly, the complainant was not well acquainted with the accused. In such circumstances, it is hard to believe that he had lent Rs.10 lakh to the accused. Further, in the cross- examination of PW.1, he has categorically admitted that the - 11 - NC: 2025:KHC:5144 CRL.A No. 1119 of 2014 cheque in question was not issued by accused to him. This admission of the complainant goes to the root of the case. In such circumstances, the complainant has failed to establish that he had lent a sum of Rs.10 lakh to the accused and for repayment of the said hand loan, the accused has issued cheque in question and subsequently, the said cheque was dishonored. 16. On careful examination of the entire evidence on record, I am of the considered view that the learned Magistrate has duly perused the evidence on record. Accordingly, the impugned judgment does not call for interference by this Court. Against this backdrop, I answer point raised above in the negative and proceed to pass the following: ORDER i) The appeal, being devoid of merits, is hereby dismissed. SD/- (RAJESH RAI K) JUDGE VM List No.: 1 Sl No.: 22