- 1 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO. 1201 OF 2013 BETWEEN: SRI. N.M. RAJASHEKARAIAH S/O N.M. CHANNABASAIAH AGED ABOUT 70 YEARS R/AT GOPANALU VILLAGE DAVANAGERE TALUK DAVANAGERE DISTRICT …APPELLANT (BY SRI. VIRUPAKSHAIAH P.H, ADVOCATE) AND: SMT. A.D. GIRIJAMMA W/O A.N. LOKESH AGED ABOUT 45 YEARS TEACHER, GOVERNMENT HIGHER PRIMARY SCHOOL, ANABERU DAVANAGERE TALUK AND DISTRICT …RESPONDENT (BY SMT. VIJAYA M.N, ADVOCATE) THIS CRL.A. IS FILED U/S.378(4) OF CR.P.C PRAYING TO SET ASIDE THE ORDER DATED:24.9.13 PASSED BY THE PRL. SENIOR CIVIL JUDGE AND JMFC, DAVANAGERE IN C.C.NO.532/12 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCES P/U/S 138 OF N.I. ACT. THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: Digitally signed by HEMAVATHY GANGABYRAPPA Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 CORAM: HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by the complainant praying to set aside the judgment of acquittal dated 24.09.2013 passed in C.C.No.532/2012 by the Principal Senior Civil Judge and JMFC, Davangere and convict the respondent –accused for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'N.I. Act' for brevity). 2. The case of the appellant - complainant in brief is as under: The respondent –accused has borrowed a sum of Rs.1,00,000/- from the appellant –complainant on 03.01.2007 agreeing to repay the same. The appellant – complainant requested to the respondent –accused to repay the amount borrowed. The respondent –accused has issued cheque bearing No.099328 dated 03.10.2008 for Rs.1,00,000/- drawn on Central Bank of Indian, Davanagere infavour of the appellant –complainant. The - 3 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 appellant –complainant presented the said cheque for encashment and the said cheque has been returned as dishonoured on 16.10.2008 with endorsement “insufficient funds” in the account of the respondent –accused. The appellant -complainant got issued legal notice on 23.10.2008. Inspite of service of the said notice, the respondent –accused has not paid the cheque amount. Therefore, the complainant has filed a private complaint against the respondent - accused for offence punishable under Section 138 of the N.I Act. 3. Learned Magistrate has taken cognizance against the respondent –accused and registered case in C.C.No.532/2012 for offence punishable under Section 138 of the N.I Act. The plea of respondent - accused has been recorded. The complainant in order to prove his case has examined himself as P.W.1 and got marked documents as Ex.P1 to P8. The statement of respondent -accused came to be recorded under Section 313 of Cr.P.C. The respondent –accused has examined herself as D.W.1 and - 4 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 got marked documents as Ex.D1 and D2. Learned Magistrate after hearing arguments on both sides has formulated points for consideration and passed impugned judgment of acquittal. The said judgment of acquittal has been challenged by the complainant in this appeal. 4. Heard learned counsel for the appellant and learned counsel for the respondent. 5. Learned counsel for the appellant would contend that the respondent -accused has admitted her signature on cheque –Ex.P2. As the respondent –accused has admitted her signature on cheque –Ex.P2, the presumption under Section 139 of the N.I Act has to be drawn that the cheque has been issued for discharge of debt. The said presumption drawn under Section 139 of the N.I Act has not been rebutted by the respondent – accused. The respondent –accused has not given any reply to the notice got issued by the appellant – complainant. The respondent –accused who has taken defence that she has issued signed cheques at the time of - 5 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 availing loan from the Veermaheshwari Society wherein the appellant –accused was Director has not been established. There is no suggestion to P.W.1 that he misusing signed cheques issued by the respondent - accused. D.W.1 has also not stated regarding misusing the signed cheque by the appellant –complainant. The presumption is not rebutted by the respondent –accused, the learned Magistrate ought to have convicted the respondent –accused for offence punishable under Section 138 of the N.I Act. With these, he prays to allow the appeal and convict the respondent –accused for offence punishable under Section 138 of the N.I Act. 6. Learned counsel for the respondent –accused would contend that the appellant –complainant has admitted that he was Director in Veermaheshwari Society wherein the respondent –accused has taken loan of Rs.25,000/- for treatment of her husband who met with an accident. The respondent –accused who alleged to have not paid loan taken from Veermaheshwari Society. Inspite - 6 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 of same, the appellant –complainant lending huge amount of Rs.1,00,000/- appears to be doubtful. Considering the said aspect, the respondent –accused has rebutted the presumption raised under Section 139 of the N.I Act. Therefore, the learned Magistrate has rightly acquitted the respondent –accused for offence punishable under Section 138 of the N.I Act. 7. Having heard learned counsels, the Court has perused the impugned judgment and trial Court records. Considering the grounds urged, the point arises for my consideration is: “Whether learned Magistrate has erred in passing the judgment of acquittal of respondent –accused for offence punishable under Section 138 of N.I. Act.”? My answer to the above point is in the in the affirmative for the following reasons. It is the case of the appellant –complainant that he has lent amount of Rs.1,00,000/- to the respondent- - 7 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 accused 03.01.2007 and for making repayment of amount borrowed, the respondent –accused has issued Ex.P2 - cheque for Rs.1,00,000/- on 03.10.2008. The respondent –accused has admitted her signature on cheque –Ex.P2. As the respondent –accused has admitted her signature on cheque –Ex.P2, the presumption under Section 139 of the N.I Act has to be drawn that the cheque has been issued for discharge of debt. The said presumption is rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probability. 8. The notice got issued by the appellant – complainant to the respondent –accused on dishonour of cheque has been served on the respondent –accused. The respondent –accused has not choosen to give any reply to the said notice. The respondent –accused has not put forth her defence by sending reply to the legal notice. It is defence of the respondent –accused that she has availed loan from Veermaheshwari Society in a sum of Rs.25,000/- in the year 2006 and in the said Society the appellant –complainant was working as Director. At the - 8 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 time of availing loan she has given three signed cheques to the appellant –complainant. The appellant – complainant who has been examined as P.W.1 has admitted that he was Director in Veermaheshwari Society and the respondent –accused availed loan in the said society. P.W.1 has denied that the respondent –accused having given three signed cheques and promissory note at the time of availing loan from Veermaheshwari Society to the appellant –complainant. Ex.D2 is a copy of notice sent to the respondent –accused by the appellant –complainant as Director of Veermaheshwari Society demanding repayment of loan borrowed along with the interest and it is dated 22.12.2009. The said letter itself indicates that the respondent –accused has not repaid the loan borrowed from Veermaheshwari Society. D.W.1 in her cross examination has admitted that she has not having enmity with the appellant –complainant and he is reputed and respectable person in Gopanalu village. She has also admitted that he is having agricultural land and house in the said village. She has also admitted that he is - 9 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 financially sound. She has also admitted that she has not asked the appellant –complainant seeking return of cheques given by her to him in writing. There is no evidence of D.W.1 regarding the appellant –complainant misusing the signed cheques given by her. D.W.1 has also admitted that there are four cheque bounce cases are pending against her in Court at Davanagere. The said aspect itself indicate that the respondent –accused was in need of money and she has borrowed money from different persons. The respondent –accused has failed to establish her defence that she gave signed cheques to the appellant –complainant. Therefore, the presumption drawn under Section 139 of the N.I Act remained unrebutted. 9. The Hon’ble Apex Court in the case of Rajesh Jain Vs Ajay Singh1 has observed as under “55. As rightly contended by the appellant, there is a fundamental flaw in the way both the Courts below have proceeded to appreciate the 1 Reported in AIR Online 2023 SC 807 - 10 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.” 10. As the respondent –accused has failed to rebut the presumption raised under Section 139 of N.I Act, the respondent –accused requires to be convicted for offence punishable under Section 138 of the N.I Act subject to - 11 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 satisfaction of other ingredients of Section 138 of the N.I Act. 11. Cheque –Ex.P2 issued by the respondent – accused has been dishonoured for want of funds in the account of the respondent –accused and bank endorsement dated 06.10.2008 is at Ex.P4. The appellant –complainant has got issued legal notice dated 23.10.2008 to the respondent –accused and a copy of which is at Ex.P5. The said notice has been sent to the respondent – accused by registered post and also under certificate of posting. Ex.P8 is postal acknowledgment which indicates that the said notice has been served on the respondent – accused on 27.10.2008. The respondent –accused has not sent any reply to the legal notice. The complaint has been filed within statutory period from the date of cause of action. Considering all these aspects, the ingredients of offence punishable under Section 138 of the N.I Act are satisfied. Without considering all these aspects, learned Magistrate has erred in passing judgment of acquittal of - 12 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 the respondent –accused for offence punishable under Section 138 of the N.I Act. 12. In the result, the following ORDER i) The appeal is allowed. ii) The impugned judgment of acquittal dated 24.09.2013 passed in C.C.No.532/2012 by the Principal Senior Civil Judge and JMFC, Davangere acquitting the respondent –accused for offence punishable under Section 138 of the N.I Act is set aside. iii) The respondent –accused is convicted for offence punishable under Section 138 of the N.I Act and he has been sentenced to pay fine of Rs.1,10,000/-(Ruppes One Lakh Ten Thousand Only) and in default of payment of said fine amount he shall undergo simple imprisonment for a period of 03 (three) months. - 13 - NC: 2025:KHC:7522 CRL.A No. 1201 of 2013 iv) Out of the fine amount Rs.1,00,000/-(Ruppes One Lakh only) is ordered to be paid as compensation to the appellant –complainant. v) The respondent –accused shall deposit the said fine amount within 02 (two) months from this day. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE DSP List No.: 1 Sl No.: 19