- 1 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 20TH DAY OF MARCH, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO. 100263 OF 2016 BETWEEN: SHRI. SUNIL RAMESH BEKWAD, AGE: 44 YEARS, OCC: BUSINESS, R/O: H.NO.2356, HATTIHOL GALLI, SHAHAPUR, TQ: AND DIST: BELAGAVI. …APPELLANT (BY SRI SANTOSH B. RAWOOT, ADVOCATE) AND: SHRI. KALIMULLA I. KAPSI, AGED ABOUT: 38 YEARS, OCC: BUSINESS, R/O: H.NO.2359, KACHERI GALLI, TQ AND DIST: BELAGAVI. …RESPONDENT (BY SMT. VINUTA M. KHANNUR, ADVOCATE APPEARED FOR SRI. M. M. KHANNUR, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C., SEEKING TO ALLOW THE APPEAL BY SETTING ASIDE THE JUDGMENT AND ORDER DATED 30.08.2016 PASSED BY THE JMFC-IV COURT BELAGAVI, IN CRIMINAL CASE NO. 1339 OF 2012 AND ALLOW THE COMPLAINT OF THE APPELLANT AS PRAYED FOR, IN THE INTEREST OF JUSTICE AND EQUITY. THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED AS UNDER: CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR Digitally signed by ASHPAK KASHIMSA MALAGALADINNI Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 ORAL JUDGMENT This appeal is filed by the complainant praying to set aside the judgement dated 30.08.2016 passed in CC No.1339/2012 by the IV JMFC Court, Belagavi, whereunder the accused is acquitted for the offence punishable under Section 138 of N.I. Act. 2. The case of the appellant-complainant in brief is as under; The accused has taken hand loan of ₹1,42,000/- from the complainant. The complainant had advanced loan to the accused by availing loan on fixed deposit of ₹98,000/- dated 22.12.2009 from Sindhudurg Multipurpose Co-operative Society Limited, Angol, Tilakwadi, Belagavi and remaining ₹44,000/- was given in cash. The accused has assured to return the loan amount within six [6] months. After repeated requests, the accused has issued cheque bearing No.038637 dated 16.05.2012 drawn on Union Bank of India, Hindwadi Branch, Belagavi. The complainant presented the said - 3 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 cheque for encashment and it was returned with an endorsement as “Fund Insufficient” in the Bank Account of accused by memo dated 18.05.2012. The complainant got issued the legal notice on 16.06.2012 and it has been served on the respondent-accused on 23.06.2012. In spite of service of said notice, the accused did not pay the cheque amount and therefore the complainant filed a private complaint against the respondent-accused for the offence punishable under Section 138 of N.I. Act. 3. The learned Magistrate has taken cognizance and registered CC No.1339/2012 against the respondent- accused for offence punishable under Section 138 of N.I. Act. The plea of the respondent-accused has been recorded. The complainant in order establish his case, has examined himself as PW.1 and got marked six [6] documents as Ex.P.1 to P.6. The statement of accused has been recorded under Section 313 of Cr.P.C. The respondent-accused in defence examined himself as DW.1 and examined one more witness as DW.2 and no - 4 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 documents have been marked. The learned Magistrate after hearing the arguments on both sides has passed the impugned judgement of acquittal. The said judgement of acquittal has been challenged by the complainant in this present appeal. The appellant has filed IA No.1/2017 under Section 91(2) of Cr.P.C seeking production of documents i.e., the statement of his loan against the fixed deposit availed from Sindhudurg Multipurpose Co- operative Society Limited, Angol, Tilakwadi, Belagavi. The respondent-accused has not chosen to file any statement of objections to the said application. 4. Heard the learned counsel for the appellant- complainant and the learned counsel for the respondent- accused. 5. The learned counsel for the appellant would contend that the respondent has admitted his signature on the cheque-Ex.P.1 and therefore, a presumption under Section 139 of N.I. Act has to be drawn. The respondent- accused has taken up the defence that he had given a - 5 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 cheque as a security for scrap purchased by him from the appellant-complainant. The said defence has not been admitted by the PW.1 in his cross-examination. Accused examined himself as DW.1 and one witness as DW.2. The said defence has not been established. The complainant has produced documents for he availing loan from deposit in a sum of ₹98,000/- under IA No.1/2017. The trial Court has observed that the complainant as averred in the complaint has not produced any documents to show that he has availed loan from deposit in a sum of ₹98,000/-. As the respondent-accused has failed to rebut the presumption, there is no necessity for the appellant- complainant to prove the transaction of lending and borrowing and his financial capacity. With this he prayed to allow the appeal and convict the respondent-accused for the offence punishable under Section 138 of N.I. Act. 6. The learned counsel for the respondent- accused contended that the appellant-complainant has not proved lending of the loan of ₹1,42,000/- to the - 6 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 respondent-accused. The complainant who has examined himself as PW.1 has admitted in his cross-examination that he is earning ₹7,000/- per month and itself shows that he has no capacity to lend huge amount of ₹1,42,000/-. The appellant-complainant has not produced any documents to show that he has availed loan on deposit, as averred in the complaint. The documents produced is now before this Court, is an after thought and to substantiate the case of the complainant. The trial Court considering the defence and evidence of the defence witness, has rightly held that presumption is rebutted and rightly acquitted the respondent-accused for the offence punishable under Section 138 of N.I. Act. 7. Having heard the learned counsels, the Court has perused the impugned judgment and the trial Court records and IA No.1/2017. 8. Considering the grounds urged, the following points arise for my consideration; - 7 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 1. “Whether the trial Court has erred in acquitting the respondent-accused for offence punishable under Section 138 of N.I. Act? 2. Whether the appellant-complainant has made out a case for production of additional documents as sought in IA No.1/2017?” 9. My answer to the above points in the affirmative for the following reasons; It is the specific case of the appellant-complainant that he lent a sum of ₹1,42,000/- to the respondent- accused on 22.12.2009. In the complaint, it is averred that he has availed loan on his fixed deposit in a sum of ₹98,000/- from Sindhudurg Multipurpose Co-operative Society Limited, Angol, Tilakwadi, Belagavi and paid the remaining ₹44,000/- by way of cash. The trial Court has observed that the appellant-complainant has not produced any documents to show that he has availed loan in a sum of ₹98,000/-. Now, the documents produced along with IA - 8 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 No.1/2017 is the ledger for the loan Account of the appellant-complainant of loan availed against the deposit which indicate that on 22.12.2009, the appellant- complainant has availed loan of ₹98,000/- on his deposits. Even though, the said document is not produced before the trial Court, but it is produced before this Court. The respondent-accused has not chosen to file any objections to the said IA No.1/2017. The appellant-complainant has made out a case for production of the additional documents as sought in IA No.1/2017. 10. The respondent-accused has admitted his signature on cheque-Ex.P.1, the presumption has to be drawn that the cheque is issued for discharge of the debt. The said presumption is a rebuttable presumption. For rebutting the said presumption, the standard of proof is preponderance of probability. 11. The respondent-accused has taken up the defence that he used to purchase the scrap from the appellant-complainant and for that, he has issued a - 9 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 cheque-Ex.P.1 as a security. PW.1 in his evidence has stated that he is the owner of the flour mill and the accused is his neighbour and doing a scrap business and also driving auto and therefore, they are acquainted to each other. 12. The DW.1-the respondent-accused has admitted in his cross-examination that the appellant- complainant is his neighbour. DW.1 in his evidence has stated that the appellant-complainant used to sell the scrap material worth ₹40,000/- to ₹42,000/- and he was purchasing a scrap material and issuing blank signed cheque as a security and after selling the scrap material, he used to make payment and take back the cheque issued as a security. DW.1 has stated that since the cheque-Ex.P.1 has not given back even after the payment towards the scrap materials. PW.1 has not stated what was the value of the scrap material which he has purchased from the appellant-complainant and what was the amount payable and paid to the appellant- - 10 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 complainant. PW.1-complainant in his cross-examination has stated that there will be no much scrap material in the flour mill and pleaded that he used to sell the scrap once in two years for ₹80/-. What were the scrap materials which the accused purchased from the complainant has not been stated by the accused in his evidence. 13. DW.2, who was also the companion of accused in scrap business has stated that he used to purchase the scrap material once in a year for ₹30,000/- to ₹40,000/-. He has further stated that in the year 2009, they purchased a scrap material from the complainant at that time, they issued Ex.P.1-blank cheque. He has not stated that subsequently the amount is paid by them to the complainant. Considering the fact, that the complainant is running a flour mill and his evidence that there will be no much scrap worth ₹40,000/- to ₹45,000/- to be purchased by the accused, it is clear that the accused has not rebutted the presumption drawn under Section 139 of N.I. Act. So also, the accused has not issued any legal notice - 11 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 putting forth his defence at the initial stage. Considering all these aspects, the learned Magistrate has erred in acquitting the respondent-accused for the offence punishable under Section 138 of N.I. Act. The cheque issued by the respondent-accused has been dishonoured for want of funds in his Account. The statutory notice has been issued within a statutory period and it has been served on the respondent-accused. The respondent- accused did not pay the cheque amount even after service of notice within 15 days. The complainant filed a private complaint within a statutory period from the date of cause of action. Considering all these aspects, the complainant has established that the respondent has committed an offence punishable under the Section 138 of N.I. Act. 14. In view of the above, the judgement of acquittal passed by the trial Court is requires to be set aside and the respondent-accused is liable for conviction of offence punishable under Section 138 of N.I. Act. In the result the following; - 12 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 ORDER i) The appeal is allowed. ii) The impugned judgement of acquittal dated 30.08.2016 passed in CC No.1339/2012 by the IV JMFC Court, Belagavi, is set aside. iii) The respondent-accused is convicted for offence punishable under Section 138 of N.I Act and he is sentenced to pay a fine of ₹1,52,000/- and in default of payment of fine, to undergo simple imprisonment for a period of six [6] months. Out of the fine amount, ₹1,52,000/- is ordered to be paid to the appellant- complainant as compensation. - 13 - NC: 2025:KHC-D:5162 CRL.A No. 100263 of 2016 iv) The respondent-accused shall deposit the said fine amount within a period of two [2] months from this day. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE PJ/CT-ASC List No.: 1 Sl No.: 32