- 1 - CRL.A No.100080 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 10TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE RAJESH RAI K CRIMINAL APPEAL NO. 100080 OF 2017 BETWEEN: SHRI REXEN KOSTA FERNANDES, AGE: 38 YEARS, OCC. BUSINESS, R/O. AROLLI, MUNDAGOD, TQ. HONNAVAR, DIST. KARWAR-581342. …APPELLANT (BY SRI. B.M. PATIL, ADVOCATE) AND: SHRI GANGAPATI S/O. TIMMAPPA NAIK, AGE: 58 YEARS, OCC: BUSINESS, R/O. AT/POST: KELGINUR, TQ. HONNAVAR, DIST. KARWAR-581342. …RESPONDENT (BY KUM. BINDU GANACHARI, ADVOCATE FOR SRI. V.M. SHEELVANT, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C., PRAYING TO CALL FOR RECORDS AND PLEASED TO SET ASIDE THE JUDGMENT IN CRIMINAL CASE NO. 340 OF 2013 DATED 13.01.2017 PASSED BY THE PRINCIPAL JUDICIAL MAGISTRATE FIRST CLASS, HONNAVAR, ACQUITTING THE ACCUSED AND PUNISH THE ACCUSED UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT 1881 BY ALLOWING THIS APPEAL. THIS CRIMINAL PETITION, HAVING BEEN HEARD AND RESERVED ON 03.07.2025, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, THE COURT DELIVERED THE FOLLOWING: CORAM: THE HON'BLE MR. JUSTICE RAJESH RAI K YASHAVANT NARAYANKAR Digitally signed by YASHAVANT NARAYANKAR Date: 2025.07.11 10:23:41 +0530 - 2 - CRL.A No.100080 of 2017 CAV JUDGMENT (PER: THE HON'BLE MR. JUSTICE RAJESH RAI K) The appellant has assailed the judgment passed in C.C.No.340/2013, dated 13.01.2017 by the Principal JMFC, Honnavar1, whereby the trial Court acquitted the accused/respondent for the offence punishable under Section 138 of the Negotiable Instruments Act, 18812. 2. For the sake of convenience, the parties are referred to as per their rankings before the trial Court. 3. The abridged facts of the case are that, the complainant and accused are known to each other. In the year 2013, the accused availed a hand loan of Rs.3,52,000/- from the complainant and for repayment of the same, he issued a cheque bearing No.014520 dated 09.03.2013 drawn on Batkal PLD Bank, Manki Branch for a sum of Rs.3,52,000/-. As per the advice of accused, the complainant presented the cheque through his banker for encashment, however, the same was returned with an endorsement “Funds Insufficient”. Subsequent thereto, the complainant issued a legal notice dated 1 Hereinafter referred to as ‘Trial Court’ for short 2 Hereinafter referred to as ‘N.I. Act’ for short - 3 - CRL.A No.100080 of 2017 15.03.2013 to the accused to repay the said cheque amount. The said notice returned with an endorsement “Not Claimed”. Hence, the complainant filed a private complaint under Section 200 of Cr.P.C. for the offence punishable under Section 138 of the N.I. Act before the trial Court. 4. To prove the case, the complainant examined himself as PW.1 and one more witness on his behalf as PW.2 and marked 7 documents as Exs.P1 to P7. The accused neither examined any witness on his behalf, nor marked any documents. 5. After assessment of oral and documentary evidence, the trial Court acquitted the accused for the offence punishable under Section 138 of the N.I. Act as stated supra. The said judgment is under challenge in this appeal by the complainant. 6. Heard the learned counsel Sri B.M. Patil for the appellant/complainant, so also learned counsel Smt. Bindu Ganadari, learned counsel for the respondent/accused. 7. The primary contention of the learned counsel for the appellant/complainant is that the trial Court grossly erred - 4 - CRL.A No.100080 of 2017 while acquitting the accused for the offence punishable under Section 138 of the N.I. Act, despite the complainant placing sufficient evidence on record to prove the case. According to the learned counsel, the mandatory requirements provided under Section 138 of the N.I. Act is complied by the complainant. Further, the accused has not disputed the cheque in question and his signature on it. However, the accused has not rebutted the said presumption by placing cogent evidence. According to the learned counsel, while acquitting the accused, the trial Court significantly opined that the complainant failed to prove the lending capacity of Rs.3,52,000/-. Per contra, the complainant produced Exs.P5 to P7-receipts issued by the Karnataka Bank for pledging gold ornaments of his wife in the month of January and February, 2013 for a sum of Rs.2,78,000/- and the balance amount was paid by him by obtaining a loan in his wife’s name. In such circumstance, the complainant has proved advancing of loan amount. Despite, the trial Court acquitted the accused in the impugned judgment which is liable to set-aside. Accordingly, he prays to allow the appeal and to convict the accused for the charged offence. 8. Per contra, learned counsel for the respondent/accused contended that the trial Court after - 5 - CRL.A No.100080 of 2017 meticulously examining the entire evidence on record passed a well-reasoned judgment, which does not warrant interference at the hands of this Court. She contended that the complainant failed to state the date and month of advancing the loan amount to the accused. The amount in question is an odd amount and the complainant has not stated for what purpose the accused had obtained the said loan amount. Further, in the complaint, the complainant has stated that the accused has obtained a hand loan of Rs.3,52,000/- in a single payment, however, in the cross-examination he stated that the said amount was paid in 2 installments to the accused; the 1st installment of Rs.2,46,000/- was paid by pledging the gold ornaments of his wife at Karnataka Bank. Though the complainant produced Exs.P5 to P7-receipts of the Bank, the same do not have any seal or sign of the Bank authority. Further, according to the complainant, the 2nd installment of Rs.1,06,000/- was paid by him by obtaining loan in his wife’s name. Per contra, the accused placed probable defence that, in the year 2010, the accused stood as a surety to the complainant in connection with a criminal case and at that time, his two signed cheques were stolen/misplaced. The same was not within his knowledge and after filing the complaint; he - 6 - CRL.A No.100080 of 2017 came to know about the same. This aspect is rightly appreciated by the trial Court and acquitted the accused, as such; interference does not call for in the impugned judgment. Accordingly, she prays to dismiss the appeal. 9. Having heard the learned counsel for the respective parties and on perusal of the evidence available on record, the sole point that arises for my consideration is: “Whether the trial Court is justified in acquitting the accused for the offence punishable under Section 138 of the N.I. Act?” 10. As could be gathered from records, the cheque in question-Ex.P1 and the signature of accused on it is not seriously disputed by the accused. The specific defence of the accused is that the same was stolen/misplaced during the year 2010 while he appeared in the Court to stand as surety to the complainant in a criminal case. To prove the said defence, the accused neither examined any witness nor marked any documents. However, on careful perusal of the cross- examination of the complainant, he has not stated the date and month of advancing the loan to the accused. Further, according to him, he is into areca nut and coconut business and having a monthly income of Rs.30,000-40,000/-. To prove his lending - 7 - CRL.A No.100080 of 2017 capacity of huge sum of Rs.3,52,000/-, he relied 3 documents i.e., Exs.P5 to P7-receipts issued by the Karnataka Bank in respect of gold loan. According to the complainant, in the month of January and February, 2013 he pledged gold ornaments of his wife in Karnataka Bank for a sum of Rs.2,78,000/- and paid Rs.2,46,000/- to the accused. The remaining amount of Rs,1,06,000/- was paid by him to the accused by obtaining loan in his wife’s name. This aspect is deposed by the complainant for the first time in his cross- examination and had not stated in the complaint. Further, he admitted in his cross-examination that, after 22.01.2013, he repaid the loan to Muthoot Finance and released the gold ornaments of his wife. He also admitted that, one more cheque bounce case was filed by him against the accused at Sirsi Court and subsequently, withdrew the said case. The complainant also admitted in his cross-examination that there are several cheque bounce cases filed against him at Honnavar Court by different persons in the year 2013-2014, which reveals that the complainant himself was in financial crisis during that period. Hence, it is hard to believe that he advanced a huge sum of Rs.3,52,000/- to the accused during that period, that too by pledging gold ornament of his wife in Bank. In such - 8 - CRL.A No.100080 of 2017 circumstance, the complainant failed to produce cogent and believable evidence to prove the legally recoverable debt by the accused to him. As rightly contended by the learned counsel for the accused, the hand loan and the cheque amount is an odd amount of Rs.3,52,000/-. The complainant has not executed any documents including the cheque in question at the time of advancing the loan amount. Though the accused not replied to the legal notice, the evidence of PW.2-the postman reveals that, he has not served the legal notice to the accused and not given any information to the family members of the accused. The unserved postal cover depicts that “left not known and not claimed”. In such circumstance, it could be presumed that the legal notice was not served to the accused to reply the claim of the complainant. On a overall perusal of the evidence on record, the accused has rebutted initial presumption under Sections 118 and 139 of the N.I. Act with probable defence in the cross-examination of the complainant. In that view of the matter, I am of the considered view that the trial Court has rightly acquitted the accused for the offence punishable under Section 138 of the N.I. Act. Therefore, interference does not call for in the impugned judgment. Accordingly, I answer the - 9 - CRL.A No.100080 of 2017 point raised above in the “affirmative” and proceed to pass the following: ORDER The Criminal Appeal No.100080/2017 stands dismissed. SD/- (RAJESH RAI K) JUDGE HKV CT:PA