- 1 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 26TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR JUSTICE H.P.SANDESH CRIMINAL APPEAL NO. 1144 OF 2013 BETWEEN: 1. SRI. RAGHURAMA REDDY S/O MUNIREDDY AGED ABOUT 45 YEARS R/AT NO.12/2, N.AGARA JIGANI HOBLI, ANEKAL TALUK BENGALURU URBAN DISTRICT. …APPELLANT (BY SRI. BASAVANNA M.D., ADVOCATE) AND: 1. SRI. CHANDRA REDDY B, S/O BHADRAREDDY AGED ABOUT 40 YEARS R/AT PRABHAKARA REDDY BUILDING 3RD CROSS, VIDYANAGARA BOMMANAHALLI INDUSTRIAL AREA HOSURU MAIN ROAD BENGALURU-99. …RESPONDENT (BY SRI. M.S.VARADARAJAN, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 OF CR.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 05.10.2013 PASSED BY THE XIV ACMM, BENGALURU IN C.C.NO.27013/2011 ACQUITTING THE Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT. THIS APPEAL COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE H.P.SANDESH ORAL JUDGMENT Heard learned counsel for the appellant and learned counsel for the respondent. 2. The factual matrix of the case of the complainant before the Trial Court is that both the complainant and the accused are relatives i.e., brother in laws and having close acquaintance with each other, since he has given his sister to the accused and in turn he has married his sister. In the first week of August 2010, the accused approached and requested him for hand loan of Rs.15 lakhs for the purpose of financial difficulties. Considering his request, he arranged and paid the amount of Rs.15 lakhs in the last week of August, 2010 and he had agreed to repay the amount on or before 26th of October, 2010. On demand, he had issued the cheque for Rs.15 lakhs and when the same was presented, it was dishonoured with an endorsement ‘insufficient fund’. Hence, legal notice was issued - 3 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 and the same was served on 02.03.2011, but not made any payment in compliance of the demand. Hence, complaint was filed, the Trial Court taken cognizance and secured the accused and he did not plead guilty and the complainant examined himself as P.W.1 and got marked the documents as Exs.P1 to P6. On the other hand, the accused did not choose to enter into the witness box, but instead examined his father-in-law, who is also father of the complainant and got marked the documents as Exs.D1 and D2. The accused was subjected to 313 statement. 3. The Trial Court having considered the evidence of P.W.1 as well as Exs.P1 to P6 and also the evidence of D.W.1 dismissed the complaint, in coming to the conclusion that there was no source of income to make the payment of Rs.15 lakhs. Apart from that payment of more than Rs.20,000/- ought to have been paid through cheque and also payment of the amount of Rs.15 lakhs was not declared in income tax. D.W.1, who is none other than father of the complainant was also examined and he has deposed before the Court that he had bequeathed 5 guntas of land as per Ex.D2 and copy of the gift deed is also produced in favour of the complainant for doing the - 4 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 bisleri business and also stood as guarantor while availing loan of Rs.25 lakhs from the concerned bank authority and also he categorically deposed before the Court that cheque was given as security, in order to avail loan from the bank to do the business. Hence, comes to the conclusion that probable defence was led by accused by examining his father-in-law and complainant has not proved his case. Being aggrieved by the order of acquittal, present appeal is filed before this Court. 4. The main contention of learned counsel for the appellant before this Court is that issuance of cheque is not disputed and only defence is that cheque was given as security for availing loan by the complainant. But, he was not a surety to the said transaction and the same is elicited from the mouth of D.W.1. Learned counsel would submit that before filing complaint also, notice was issued and no reply was given to the notice. He has also not led any evidence before the Trial Court to show that cheque was given as security as contended, instead the Trial Court accepted the case of the accused and there is no rebuttal evidence before the Trial Court and ought not to have dismissed the complaint. - 5 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 5. Per contra, learned counsel for the respondent submits that according to the complainant, the amount was paid in the presence of his wife in the month of August 2010 and complainant has not examined his wife before the Trial Court. The learned counsel would contend that amount was paid having drawn the amount from bank and no document is placed before the Court for having drawn the money. Learned counsel would vehemently contend that with regard to source of income is concerned, according to him cheque was given on 26.10.2010 for an amount of Rs.15 lakh. Learned counsel also brought to notice of this Court document marked before the Trial Court i.e., Ex.D1. In terms of the agreement also, made the payment of Rs.15 lakhs, for having paid the amount of Rs.15 lakhs for the complainant as well as in favour of land owner in terms of Ex.D1, no document is placed before Trial Court and also no bank statement is produced before the Court to prove that he was having that much of amount to pay the same, since notice was given to one Veerareddy in terms of Ex.D1 at the instance of the complainant only and sale consideration was arrived as Rs.7,50,000/- for 1 gunta and total land was measuring 2 guntas for total consideration of - 6 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 Rs.15 lakhs and entire sale consideration was also paid. Hence, the Trial Court rightly comes to the conclusion that he was not having source of income to make such payment. The father of the very complainant was examined before the Trial Court, even though not examined the accused and evidence available on record was considered by the Trial Court and it does not require any interference. 6. Having heard learned counsel for the appellant and learned counsel for the respondent and also the grounds urged by both the respective counsels, the points that would arise for consideration of this Court are: (1) Whether the Trial Court committed an error in acquitting the accused in coming to the conclusion that the complainant has not proved the case? (2) What order? 7. Having heard learned counsel for the appellant and learned counsel for the respondent, it is the specific case of the complainant that accused is his brother-in-law and he was in need of money and he had approached the complainant in the first of August, 2010 and he made the payment in the end - 7 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 August, 2010 of Rs.15 lakh and agreed to repay the same in a short period of two months and when he did not repay the same, he gave the cheque and cheque was bounced and notice was issued. Issuance of cheque and issuance of notice is not in dispute and no reply was given immediately after receiving the notice. Learned counsel would submit that notice was served on his wife, but it is not the case of the accused that notice was not served on him and it was also not brought to his notice by his wife and postal acknowledgment produced discloses that wife of the accused had taken the notice. 8. It is also important to note that, in the cross- examination of P.W.1, nothing is elicited with regard to cheque was given as security, in order to avail loan from the bank. But only says that at the time of lending money, no document was obtained and the fact that both of them are brother-in-laws are not in dispute and it is also not in dispute that the sister of the complainant was given to the accused and in turn, sister of accused was given to the complainant. No doubt, he admits that he is paying income tax, for having made the payment of Rs.15 lakhs, he did not disclose the same in his income tax and except this submission, nothing is elicited. He admits that in - 8 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 order to clear construction of the house, the father had sold the property and he admits that cheque was presented on 22.02.2011 and not presented the same immediately on 26.10.2010. He also admits that he had availed the loan of Rs.25 lakhs under ‘Rojgar Scheme’ from Union Bank of India and got the subsidy of Rs.8,75,000/-. There were four suretydars in respect of the said loan transaction. It is suggested that he has not given amount of Rs.15 lakhs and only to avail loan in respect of bisleri factory business, cheque was given and the same was denied. 9. On the other hand, D.W.1, father-in-law appeared and given the evidence that the bank people have insisted for guarantee and demanded cheque for Rs.15 lakhs. Hence, accused gave the cheque to him and the same was given to the complainant and he also says that he was aware of issuance of notice. But in the cross-examination, he admits that when his son availed loan from the bank, he himself and his other children gave their property as security and land is worth of Rs.1 Crore and admits that loan was given based on that security. He also admits that loan amount is lesser than value of the land. It is suggested that bank people have not - 9 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 demanded cheque for Rs.15 lakhs and the said suggestion was denied. However, he categorically admits that to that loan, this accused was not surety or guarantor. When suggestion was made that bank people have not asked any security and the same was denied. He also admits that for having misused the cheque also, he has not given any complaint against his son and also admits that he is not cordial with his son from last two years and there was dispute between him and his son in respect of the property and his son had filed the suit in O.S.No.673/2012 seeking partition and he is having grudge against him in view of filing of case against him. 10. Having taken note of answer elicited from the mouth of D.W.1, who is none other than father of the complainant, it is very clear that he was not in cordial terms with the complainant, but he came forward to give evidence claiming that cheque was given by the accused and handed over to him and in turn, he handed over the same. But, when the admission given by D.W.1 is very clear that the accused was not the guarantor or surety for the loan which the complainant has availed and apart from that, he categorically admits that the property which was given as security to the - 10 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 loan which the complainant had availed is more than Rs.1 Crore and all the family members stood as guarantors, when such being the case, very case of the accused that he issued cheque in favour of complainant as security for availing the loan, no probable defence has been raised. Apart from that, even the accused did not choose to lead any defence evidence in support of his contention, except examining the father-in-law, who was having grudge against this complainant, since the complainant had filed the suit seeking the relief of partition and the person, who takes the specific defence that he gave the cheque as security for availing the loan for the complainant, he would have appeared and given the evidence and no such probable defence is raised. 11. It is also important to note that when the notice was given by the complainant and the same was served, but no reply was given and when the suggestion was made to P.W.1 that he was having source of money and also he is running the factory is suggested in the cross-examination of P.W.1, the fact that he is running bisleri factory is also not disputed. When such being the case, the Trial Court ought not to have come to a conclusion that he was not having source of income to lend - 11 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 the money. No doubt, as on the date of transaction, no document was obtained, the Court has to take note of relationship between the complainant and the accused who are brother-in-laws and not declaring the amount in the income tax cannot be a ground to come to an other conclusion, when the complainant placed on record the cheque issued and there is a presumption under Section 139 of Evidence Act and unless presumption is rebutted under Section 139 of Evidence Act, the judgment relied upon by learned counsel for the appellant reported in RAJESH JAIN VS. AJAY SINGH reported in AIR 2023 SC 5018 regarding presumption of cheque issued by accused towards repayment of debt availed from complainant, was dishonoured, accused neither replied demand notice nor presented any rebuttal evidence, instead, accused claimed that blank cheque had been misused by complainant, accused however failed to provide any substantial evidence or file a police complaint regarding alleged missing cheque and the said judgment is aptly applicable to the facts of the case on hand. 12. This Court also in CRIMINAL REVISION PETITION NO.619 OF 2021 dated 04.06.2024 also made an observation that when no positive action is also taken by the - 12 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 accused like filing a police complaint or issuing a legal notice or filing the civil proceedings in respect of the alleged misuse of the cheque as well as when he has placed on record the document of Ex.P1-cheque which belong to the accused and the signature found therein is that of the accused and in the absence of any rebuttal evidence, the defence of the accused is not accepted. 13. The counsel also relied upon the judgment of Apex Court in TEDHI SINGH VS. NARAYAN DASS MAHANT reported in LAWS (SC)-2022-3-108, wherein also discussion was made with regard to the fact that when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. But in the case on hand, no probable defence is - 13 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 raised by the accused and I have already pointed out that he did not choose to appear and give any evidence before the Trial Court and even defence set up that the cheque was given as security for availing loan by the complainant is not substantiated, inspite of D.W.1, the father of the complainant has been examined and answer given by P.W.1 is also clear that he was having ill-will against his son, since his son had filed the case before giving evidence in 2012 and also admits that for initiation of case against him, he is having ill-will against his son and the same is also elicited in the cross- examination of D.W.1. Under the circumstances, I do not find any force in the contention of learned counsel for the respondent that no documentary evidence is placed before the Court and the contention that not examined the wife of complainant is not a ground to come to an other conclusion and the Trial Court committed error in not considering the material on record, particularly the answer elicited from the mouth of D.W.1. It is also important to note that when notice was issued, no reply was given and no probable defence was set up by the accused and the same is not probabilized by leading any preponderance of probability before the Trial Court and hence, - 14 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 the Trial Court committed an error in acquitting the accused. Hence, I answer Point No.(1) as ‘affirmative’. Point No.(2) 14. In view of the discussion made above, I pass the following: ORDER (i) The criminal appeal is allowed. (ii) The impugned judgment of acquittal is set aside. Consequently, the complaint filed by the appellant/complainant is allowed. The accused is convicted for the offence under Section 138 of N.I. Act. (iii) The respondent/accused is directed to pay the fine amount of R.15,00,000/- to the appellant/complainant within two months from today. If he fails to pay the fine amount within two months, he shall undergo simple imprisonment for a period of one year. (iv) Out of the fine amount of Rs.15,00,000/- deposited by the respondent/accused, an - 15 - NC: 2025:KHC:12846 CRL.A No. 1144 of 2013 amount of Rs.14,75,000/- shall be paid to the appellant/complainant and the remaining amount of Rs.25,000/- shall vest with the State. Sd/- (H.P.SANDESH) JUDGE ST List No.: 1 Sl No.: 58