- 1 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 17TH DAY OF APRIL 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO.100091 OF 2017 BETWEEN: SMT. MANJUDEVI AGARWAL W/O. SURESH KUMAR AGARWAL, AGE: 55 YEARS, OCC: HOUSEWIFE, R/A: 302, KONARK APARTMENT, BALLAPNAGAR, NEAR GUJARATH BHAVAN, HUBBALLI, DIST: DHARWAD, KARNATAKA REPRESENTED BY ITS G.P.A. HOLDER, SURESH KUMAR, AGARWAL, AGE: MAJOR. …APPELLANT (BY SRI. GOURISHANKAR S. MOT, ADVOCATE) AND: 1. SLV SECURITIES 2ND CITY CENTER, CLUB ROAD, HUBBALLI - 23, KARNATAKA, FIRM REPRESENTED BY ITS PROPRIETOR, SURESH RAGHAVENDRA SHINGANAMALLI, Digitally signed by SAMREEN AYUB DESHNUR Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 NOW, SURESH RAGHVENDRA SHINGANAMALLI, AGE: MAJOR, R/A: S-2, D, BLOCK, 2ND FLOOR, RAVENKER COMPLEX, COURT CIRCLE, HUBBALLI. 2. SURESH RAGHVENDRA SHINGANAMALLI, AGE: 47 YEARS, OCC: CHARTED ACCOUNTANT/TRADING, R/A: HOUSE NO.36, HASTHINAPUR LAYOUT, KESHWAPUR HUBBALLI. …RESPONDENTS (BY SMT. RESHMA MADIWALAR, ADVOCATE FOR SRI. T. HANUMAREDDY, ADVOCATE FOR R2; R1 – SERVED) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C.,1973 SEEKING TO CALL FOR THE RECORDS OF THE TRIAL COURT IN C.C.NO.1062/2015 PENDING BEFORE PRINCIPAL CIVIL JUDGE AND J.M.F.C COURT AT HUBBALLI AND TO SET ASIDE THE JUDGMENT OF ACQUITTAL PASSED BY THE LEARNED TRIAL COURT IN C.C.NO. 1062 OF 2015 DATED 12.01.2017 AND CONVICT THE RESPONDENT HEREIN FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I. ACT IN THE INTEREST OF JUSTICE AND EQUITY. THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: - 3 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by appellant/complainant challenging the judgment of acquittal dated 12.01.2017 passed in C.C.No.1062/2015 by the Principal Civil Judge and JMFC, Hubballi, whereunder, respondents/accused have been acquitted for offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ‘138 of N.I. Act’, for short) . 2. The case of the appellant/complainant in brief is as under: The accused No.1 is SLV Securities and accused No.2 is proprietor of accused No.1. The accused No.2 who is well acquainted with the husband of complainant, sought financial help and borrowed Rs.4,00,000/- on 01.10.2013 as hand loan. He promised to repay it within short time. Thereafter, he paid Rs.1,00,000/- and Rs.10,000/- after lapse of considerable period and there was balance of Rs.2,90,000/- and for that, he had issued cheque-Ex.P-1 - 4 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 dated 31.12.2014 for Rs.3,00,000/- in favour of the complainant. The said cheque has been presented for encashment and it came to be dishonoured with an endorsement “Account Closed”. The complainant has got issued legal notice on 12.01.2015 and it has been served on the accused on 13.01.2015. The accused has not given any reply and not paid the cheque amount. Therefore, the complainant has filed a private complaint against the respondents/accused for offence under Section 138 of N.I. Act. 3. Learned Magistrate has taken cognizance and registered case in C.C.No.1062/2015 against the respondents/accused for offence under Section 138 of N.I. Act. The plea of the accused has been recorded. The complainant in order to prove her case has examined her husband who is a GPA holder as PW-1 and got marked documents as Exs.P-1 to P-11. The statement of the accused has been recorded under Section 313 of Cr.P.C. - 5 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 The accused in defence, has examined himself as DW-1 and got marked documents as Ex.D-1 to D-9. 4. 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 complainant in this appeal. 5. Heard learned counsels for appellant and respondents. 6. Learned counsel for appellant would contend that respondent No.2/accused has admitted his signature on cheque-Ex.P-1. As the respondent No.2/accused has admitted his signature on cheque-Ex.P-1, presumption has to be drawn under Section 139 of N.I. Act that it is issued for discharge of the debt. The respondent No.2/accused has taken up the contradictory defences, one regarding- cheque stolen by the son of the complainant kept in his office and another, that- cheque is issued to complainant - 6 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 for performing marriage of her son and it has not been encashed. 7. He further submits that DW-1/accused No.2 has admitted Ex.P-11-receipt issued by him for having received Rs.4,00,000/- from the complainant. There is no explanation by the accused with regard to Ex.P-11-receipt. The complainant has established her case of lending Rs.4,00,000/- and issuance of cheque-Ex.P-1 for discharge of the debt. Without considering these aspects, the learned Magistrate has erred in acquitting respondent No.2/accused. With this, he prayed for allowing the appeal and convicting the respondent No.2/accused for offence under Section 138 of N.I. Act. 8. Learned counsel for respondent No.2/accused would contend that Ex.D-4 to 7- receipts of SBI indicates that the respondent No.2/accused has sufficient money in deposit in his name and he had no necessity of borrowing any money from the complainant. The account of the accused has been closed on 01.01.2014 and therefore, - 7 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 there is no question of issuing any cheque on 31.12.2014. Considering these aspects, learned Magistrate has rightly acquitted respondent No.2/accused for offence under Section 138 of N.I. Act. With this, she prayed for dismissal of the appeal. 9. Having heard learned counsels, the Court has perused the impugned judgment and trial Court records. 10. Considering grounds urged, the following point arises for consideration: i. Whether the trial Court has erred in acquitting the respondent No.2/accused for offence under Section 138 of N.I. Act? 11. My answer to the above point is in ‘Affirmative’ for the following reasons. 12. It is the specific case of the appellant/complainant that respondent No.2/accused who is acquainted with the complainant has borrowed Rs.4,00,000/- on 01.10.2013 and in order to pay the - 8 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 balance amount, has issued cheque-Ex.P-1 for Rs.3,00,000/- in favour of the complainant. The respondent No.2/accused has admitted the signature on cheque Ex.P-1. As the respondent No.2/accused has admitted his signature on cheque-Ex.P-1, the presumption has to be drawn under Section 139 of N.I. Act that the cheque is issued for discharge of the debt. The said presumption is rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probability. 13. On perusal of cross-examination of PW-1, the respondent No.2/accused has taken up the defence that in his absence, the complainant and her son went to his office and stolen a blank signed cheque belonging to him. On perusal of evidence of DW-1, another defence taken that complainant and her son has sought financial help of accused for the marriage of complainant’s son and for that he had issued cheque for Rs.3,00,000/- during November 2013 and it has not been enchased. Considering these - 9 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 aspects, the accused has taken contradictory defences. The notice issued by the complainant as per Ex.P-3- Demanding payment of cheque amount has been served on the accused as per postal acknowledgement-Ex.P-7. Inspite of service of notice, the accused person has not sent any reply putting-forth his defence. In order to establish his first defence that signed cheque kept in his office has been stolen by son of the complainant, no material has been placed. The accused has not filed any complaint against the complainant for having stolen his signed blank cheque. Ex.D-1 produced by the accused itself indicates that a voucher has been drawn in the name of complainant dated 08.10.2014 for having paid a sum of Rs.1,00,000/-. As the said Ex.D-1 is in the name of complainant and it is confronted to complainant and marked in her evidence. DW-1 has admitted that complainant had no any transaction of his business in shares with the complainant. Ex.P-11 is a receipt and when it is confronted, DW-1 in his cross-examination, has admitted that it contains his signature and it is issued by - 10 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 him to the complainant. Ex.P-11 is a receipt for Rs.4,00,000/- dated 01.10.2013 issued by the accused in favour of the complainant. There was no any explanation by DW-1 when Ex.P-11 has been confronted to him in the cross-examination except admitting the said document. For what purpose Ex.P-11 has been issued by the accused to the complainant has not been stated by the accused. The said Ex.P-11 establishes that complainant had given Rs.4,00,000/- to the accused on 01.10.2013. It is the case of the complainant that out of amount of Rs.4,00,000/-, the accused has repaid Rs.1,00,000/- on 08.09.2014 through cheque. Ex.D-1 corroborates the said aspect and the said document is produced by the accused himself. 14. The accused failed to establish his contradictory defences. The accused has not rebutted the presumption drawn under Section 139 of N.I. Act. Ex.P-11 itself establishes that complainant has given Rs.4,00,000/- to the accused. Merely, because the accused is financially sound considering the receipts of F.D which are at Exs.D-4 - 11 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 to D-7, it cannot be said that, he has not taken money or borrowed money from the complainant. Without considering all these aspects, the learned Magistrate has erred in acquitting the respondent No.2/accused for offence under Section 138 of N.I. Act. The statutory ingredients of offence under Section 138 of N.I. Act have been established by the complainant. Therefore, the accused has to be convicted for offence under Section 138 of N.I. Act. 15. In the result, the following: ORDER i. The appeal is allowed. ii. The impugned judgment of acquittal dated 12.01.2017 passed in C.C.No.1062/2015 by Principal Civil Judge and JMFC, Hubballi is set-aside. iii. The respondent No.2/accused has been convicted for offence under Section 138 of - 12 - NC: 2025:KHC-D:6591 CRL.A No. 100091 of 2017 N.I. Act and he is sentenced to pay fine of Rs.3,10,000/- and in default of payment of fine, to undergo simple imprisonment for a period of six months. Out of the said fine amount, a sum of Rs.3,00,000/- is ordered to be paid as compensation to the complainant. iv. The accused shall deposit the said fine amount within two months from this day. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE RKM CT-ASC List No.: 1 Sl No.: 25