- 1 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL No. 920 OF 2015 BETWEEN: SRI. SHIVAKUMAR S/O K.K. SHETTY AGED ABOUT 41 YEARS R/O ASHIKA, PANGALAI DARBE, PUTTUR TALUK D.K. DISTRICT - 574 202. …APPELLANT (BY SRI SUYOG HERELE E, ADVOCATE) AND: SRI M. CHANDRAHASA RAI S/O NARAYANA RAI AGED ABOUT 58 YEARS R/O KODANKERI KEDAMDY VILLAGE & POST D.K. DISTRICT-575 003. …RESPONDENT (BY SRI. SACHIN MADEV HEDGE, ADVOCATE FOR SRI. SACHIN B.S, ADVOCATE) THIS CRL.A. IS FILED UNDER SECTION 378(4) Cr.P.C PRAYING TO SET ASIDE THE JUDGMENT AND ORDER DATED 16.04.2015 PASSED BY THE LEARNED V ADDL. DISTRICT AND SESSIONS JUDGE, D.K., MANGALURU SITTING AT PUTTUR, D.K., IN CRL.A.No.43/2014 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 N.I. ACT. Digitally signed by LAKSHMINARAYANA MURTHY RAJASHRI Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 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 complainant praying to set aside the judgment dated 16.04.2015 passed in Crl.A. No. 43/2014 by the V Additional District and Sessions Judge, Dakshina Kannada, Mangaluru, sitting at Puttur whereunder the judgment of conviction passed by the trial Court in C.C. No. 29/2012 dated 17.02.2014 has been reversed and respondent - accused has been acquitted for offence under Section 138 of Negotiable Instruments Act (hereinafter for the sake of brevity referred to as the `N.I. Act’). 2. Case of the appellant – complainant in brief is as under: The accused had borrowed a sum of Rs.65,000/- from the complainant as hand loan. When the complainant - 3 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 demanded for re-payment, the accused issued a cheuqe dated 01.08.2011 bearing No. 575938 for Rs.65,000/- to the complainant and it was drawn on Vijaya Bank, Kumbra Branch, Puttur Taluk in favour of the complainant. The complainant presented the said cheque for encashment and it was returned with endorsement `insufficient funds’ as per memo dated 03.08.2011. The complainant got issued demand notice on 18.08.2011 calling upon the accused to pay the cheque amount and the said notice has been served on the respondent - accused on 18.08.2011. The respondent - accused has given reply to the said notice and did not make payment of cheque amount. Therefore, the complainant has filed private complaint on 19.09.2011 for offence under Section 138 of the N.I. Act. Learned Magistrate has taken cognizance and registered C.C. No. 29/2012 against the respondent - accused for offence under Section 138 of N.I. Act. Plea of the accused has been recorded. The complainant, in order to prove his case, has examined himself as P.W.1 and got marked Ex.P.1 to Ex.P.5. Statement of the accused has been - 4 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 recorded under Section 313 of Cr.P.C. Accused has examined himself as D.W.1 and examined another witness as D.W.2 and got marked Ex.D.1 to Ex.D.3. After hearing arguments on both sides learned Magistrate has passed the judgment of conviction dated 17.02.2014 whereunder respondent - accused has been convicted for offence under Section 138 of N.I. Act. The respondent - accused had challenged the said judgment of conviction dated 17.02.2014 before the V Additional District and Sessions Judge, D.K., Mangaluru sitting at Puttur in Crl.A. No. 43/2014. Said criminal appeal came to be allowed by judgment dated 16.04.2015 whereunder the judgment of conviction passed by the trial Court has been reversed and the respondent - accused has been acquitted for offence under Section 138 of N.I. Act. Said judgment passed by the appellate Court in Crl.A. No. 43/2014 has been challenged by the appellant – complainant in this appeal. - 5 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 3. Heard learned counsel for appellant – complainant and learned counsel for respondent – accused. 4. Learned counsel for appellant – complainant would contend that the signature on the cheque - Ex.P.1 has been admitted by the respondent - accused and therefore, presumption under Section 139 of the N.I. Act has been drawn. Said presumption has not been rebutted by the respondent - accused. The respondent - accused has taken up the defence that earlier he had availed loan from a finance company whereunder the appellant – complainant was a partner and at the time of availing loan he had given Ex.P.1 - cheque as security and it has been misused by the complainant. Said defence has not been established. The respondent - accused has not produced any document to show that he had availed loan of Rs.17,000/- from the finance company run by the complainant. The respondent - accused has failed to rebut the presumption and the trial Court has rightly convicted - 6 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 the respondent - accused. The appellate Court has relied upon the serial number of the cheques which have been honoured in the year 2009 (as per Ex.D.1) which are prior numbers than the serial number of the cheque – Ex.P.1. It is not the case of the respondent - accused regarding the said aspect and there is no defence set up in this regard in reply notice – Ex.P.4. Therefore, the appellate Court has erred in reversing the judgment of conviction. With this he prayed to allow the appeal and affirm the judgment of conviction passed by the trial Court. On the grounds urged, learned counsel for appellant has placed reliance on the decision of the Hon’ble Apex Court in the case of Bir Singh Vs. Mukesh Kumar reported in 2019 (4) SCC 197. 5. Learned counsel for respondent – accused would contend that the date of lending has not been stated either in the legal notice or in the complaint. P.W.1 even in his chief examination has not stated the date of lending. The purpose of lending has also not been stated - 7 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 either in the legal notice or in the complaint or in the chief examination of P.W.1. Further, P.W.1 in his cross- examination has admitted that he was running Bhagavathi Finance. It is the defence of the respondent - accused that he availed loan of Rs.17,000/- and he had given a signed cheque as security at that time. Said defence of the respondent probabalises considering the honoured cheque numbers in Bank Account Statement –Ex.D.1 and serial number of cheque – Ex.P.1. As the respondent - accused has rebutted the said presumption drawn under Section 139 of the N.I. Act, onus shifts on the appellant – complainant to prove the lending of Rs.65,000/- and issuance of cheque for making payment of said debt. Said onus has not been established. Considering this aspect learned appellate Judge has rightly reversed the judgment of conviction passed by the trial Court and acquitted the appellant – complainant. With this he prayed to dismiss the appeal. 6. Having heard the learned counsel for the appellant – complainant and learned counsel for - 8 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 respondent - accused this Court has perused both the judgments and the trial Court records. 7. Considering the grounds urged the following point arises for consideration in this appeal. Whether the appellate Court has erred in reversing the judgment of conviction passed in C.C. No. 29/2012 and acquitting the respondent - accused for offence under Section 138 of N.I. Act? 8. My answer to the above point is in the negative for the following reasons: It is the specific case of the appellant – complainant that he had lent Rs.65,000/- to the respondent - accused one month prior to the date of cheque – Ex.P.1 and in order to make re-payment of the same, respondent - accused had issued Ex.P.1 – cheque for a sum for Rs.65,000/-. The respondent - accused has admitted his signature on Ex.P.1 – cheque. As respondent - accused has admitted his signature on the cheque – Ex.P.1, a presumption has to be drawn under Section 139 of the N.I. Act that the cheque is issued for discharge of a debt. - 9 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 Standard of proof for rebutting the presumption is preponderance of probabilities. 9. It is the defence of the respondent - accused that he availed Rs.17,000/- from Bhagavati Finance and at the time of borrowing he had issued blank signed cheque as security and the complainant was running the said Bhagavati Finance. Said defence has been put forth by the respondent - accused in his reply notice dated 27.08.2011. P.W.1 in his cross examination has admitted that he and one Sri. Arvind were partners in Bhagavati Finance. P.W.1 has stated that the said Bhagavati Finance was running till the year 2003. P.W.1 has denied that respondent - accused has availed loan from the said Bhagavati Finance in a sum of Rs.17,000/- and at the time of availing the said loan he had issued the cheque – Ex.P.1 as security. In order to probabalise the said defence the respondent - accused has got summoned the statement of bank account of Royal Garments. D.W.2 is the Bank Manager who has produced Ex.D.1 – Bank account statement of Royal Garments. The drawer of the cheque – Ex.P.1 is Royal - 10 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 Garments and it is signed by its proprietor. The cheque number of Ex.P.1 is 575938 and cheque is dated 01.08.2011. A perusal of the entries in Bank statement – Ex.D.1 indicates that cheque numbers 576485, 576482, 576486, 576488, 576490, 576487, 576489, 576492, 576491, 576493 have been issued and encashed between 03.03.2009 to 21.05.2009. A perusal of the cheque numbers which have been issued and encashed during the said period indicates that the cheque – Ex.P.1 (bearing Sl.No. 575938) is having prior number to the cheques which have been issued and encashed between March and May 2009. Said aspect itself establishes that the cheque – Ex.P.1 bearing No. 575938 has been issued prior to 03.03.2009. Said aspect also probabalises the defence of respondent - accused that the cheque – Ex.P.1 has been issued at the time of respondent - accused availing loan of Rs.17,000/- from Bhagavati Finance. More so, P.W.1 has admitted that he was one of the partners of Bhagavati Finance. The respondent - accused by the said defence has rebutted the presumption drawn under Section 139 of the - 11 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 N.I. Act. As the presumption is rebutted, it is for the appellant – complainant to establish the lending and issuance of cheque for making payment of amount borrowed. The complainant has not stated the date of lending in the legal notice, complaint and examination-in- chief. How the complainant has been acquainted with the accused has also not been stated by the complainant in legal notice, complaint and chief-examination of P.W.1. What is the purpose of loan has also not been stated. It is not the case of the complainant that he has lent money for interest. How the complainant is acquainted with the respondent - accused has also not been stated either in the legal notice or in the complaint or in the examination- in-chief of P.W.1. Without considering all these aspects learned trial Judge has convicted the respondent - accused for offence under Section 138 of N.I. Act. Considering the above aspects learned appellate Judge has rightly reversed the judgment of conviction passed by the trial Court and acquitted the respondent - accused for offence under Section 138 of N.I. Act by the impugned judgment. There - 12 - NC: 2025:KHC:8351 CRL.A No. 920 of 2015 are no grounds made out to set aside the impugned judgment passed by the appellate Court. In the result, the appeal is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE LRS List No.: 1 Sl No.: 65