- 1 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 2ND DAY OF APRIL, 2025 BEFORE THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR CRIMINAL APPEAL NO.100297 OF 2017 BETWEEN: SMT. GIRIJA BASAVARAJ AJAWAN, AGE: 58 YRS, OCC: HOUSEHOLD, R/O: PLOT NO.539, T. V. CENTER COLONY, BELAGAVI, TQ AND DIST:BELAGAVI. …APPELLANT (BY SRI. SANTOSH B. MALAGOUDAR, ADVOCATE) AND: SMT. SHOBHA W/O. SOMASHEKAR BETAGERI, AGE: MAJOR, OCC: BUSINESS, R/O: H.NO.360, SCHEME NO.13, T. V. CENTER COLONY, BELAGAVI, TQ AND DIST:BELAGAVI, NOW RESIDING AT H.NO.502, “SHRI SNEHA RESIDENCY”, 4TH FLOOR, CHIKKASANDRA, BENGALURU – 560 061. …RESPONDENT (BY SRI. SANTOSH B. RAWOOT, ADVOCATE) THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378 (4) OF CR.P.C., SEEKING TO SET ASIDE THE JUDGMENT AND ORDER DATED 01.07.2017 PASSED BY THE COURT OF THE V JMFC, BELAGAVI IN C.C. NO. 1047 OF 2009 (OLD) / C.C.NO. 221 OF 2017 (NEW) AND CONSEQUENTLY, RESPONDENT / ACCUSED MAY KINDLY BE CONVICTED FOR THE OFFENCES ALLEGED UNDER SECTION 138 OF N.I ACT BY ALLOWING THIS CRIMINAL APPEAL TO MEET THE ENDS OF JUSTICE. THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: Digitally signed by MOHANKUMAR B SHELAR Location: High Court of Karnataka, Dharwad Bench, Dharwad - 2 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR ORAL JUDGMENT This appeal is filed by appellant/complainant praying to set aside the judgment dated 01.07.2017 passed in C.C.No.221/2017 (Old C.C.No.1047/2009) by V-JMFC, Belagavi, whereunder, respondent/accused has 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 complainant and accused are acquainted with each other. The accused is carrying Chit Fund business in her house and used to collect deposits and lending the loan to the needy persons on interest. The complainant has deposited amount in the Chit Fund and accused gave acknowledgements for having deposited the said amount. The complainant has further averred that she has deposited more than Rs.10,00,000/- in the said Chit Fund. - 3 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 In the year 2009, when complainant was in need of money, asked the accused to give her the amount Rs.10,00,000/- from her Chit Fund account and accused has issued cheque bearing No.9363415 dated 01.06.2009 for Rs.10,00,000/- drawn on Bank of India, Shahapur Branch, Belagavi. The complainant presented the said cheque and it came to be dishonoured for want of funds in the account of accused under Bank memo dated 04.06.2009. The complainant has got issued legal notice on 23.07.2009 and it has been served on the accused on 24.07.2009. The accused has not paid the cheque amount and therefore, the complainant has filed private complaint against the respondent/accused for offence punishable under Section 138 of the N.I. Act. 3. Learned Magistrate has taken cognizance and registered case in C.C.No.221/2017 (Old C.C.No.1047/2009) against the respondent/accused for offence under Section 138 of N.I. Act. The plea of the accused has been recorded. The complainant in order to - 4 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 prove her case, has examined herself as PW-1 and got marked documents as Exs.P-1 to P-6. Ex.D-1 has been marked in the cross-examination of PW-1. The statement of the accused has been recorded under Section 313 of Cr.P.C. The accused did not lead any defence evidence. 4. The learned Magistrate after hearing the arguments on both sides, has formulated 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 respondent. 6. Learned counsel for appellant would contend that the respondent/accused has admitted her signature on cheque-Ex.P-1 and therefore, presumption under Section 139 of N.I. Act, as the cheque is issued for discharge of debt/liability has to be drawn. The said presumption has not been rebutted and therefore, the - 5 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 complainant is not required to establish the liability of the respondent/accused. Without considering these aspects, the learned Magistrate has much harped upon the transactions between the accused and the complainant which are extracted in the cross-examination of PW-1 and erred in acquitting the respondent/accused by the impugned judgment. He further submits that all statutory ingredients of offence under Section 138 of N.I. Act have been established. With this, he prayed for setting aside the judgment of acquittal and convicting the respondent/accused for offence under Section 138 of N.I. Act. 7. Learned counsel for respondent would contend that in the cross-examination of PW-1, the admissions given will establish the defence of the respondent/accused and also establish that there is no legally recoverable debt/liability. The complainant who has averred that she is having acknowledgement for having deposited amount in Chit Fund with accused and has not produced the same. - 6 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 Considering all these aspects, the learned Magistrate has rightly acquitted respondent/accused. With this, he prayed for dismissal of the appeal. 8. Having heard learned counsels, the Court has perused the impugned judgment and trial Court records. 9. Considering grounds urged, the following point arises for consideration: i. Whether the trial Court has erred in acquitting the respondent/accused for offence under Section 138 of N.I. Act? 10. My answer to the above point is in ‘negative’ for the following reasons. 11. It is the specific case of the complainant that in order to repay the amount deposited by her in Chit Fund with accused, accused has issued cheque for Rs.10,00,000/- and it came to be dishonoured. The accused has admitted her signature on the cheque. As the accused has admitted her signature on the cheque, - 7 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 presumption under Section 139 of N.I. Act has to be drawn that the cheque is issued for discharge of debt/liability. The said presumption is rebuttable presumption. The standard of proof for rebutting the said presumption is preponderance of probability. 12. It is the defence of the accused that there was no any investment by the complainant with the accused in the Chit Fund and the cheque given by the accused to the mother of the complainant as a security to the amount borrowed in a sum of Rs.1,00,000/- has been misused. 13. On reading of entire averments of the complaint, except stating that she invested in the Chit Fund with the accused more than Rs.10,00,000/-, the details of the said investment are not stated. Even the date of investment has not been stated in the complaint. The details of the said transaction is also not stated in the legal notice-Ex.P-4 got issued by the complainant to the accused. - 8 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 14. PW-1 in her cross-examination has admitted certain suggestions put to her by the counsel for accused which are as under: “The chit transaction started on 01/01/2004 and closed on 09/10/2008. The chit fund amount was different on various years. It was Rs.40,000/- in the year 2004, Rs.30,000/- in the year 2005, Rs.50,000/- in the year 2006, Rs.30,000/- in February 2007, and during March 2007 another Rs.30,000/-, Rs.30,000/- in the month of January 2008, Rs.25,000/- in the month of May 2008, 1 lakhs in the month of September 2008, 1 lakhs in the month of October 2008. Further 06-11-2008 I have Rs.2 lakhs in cash by the GPF of my husband. Apart from this I have not paid any other amount towards chit fund. The amount fixed as subscription for Rs.10,000/- was Rs.500 per month. I have maintained accounts for the above amount. I have stated the above particulars of the amount as stated now in the previous proceeding i.e. C.C.No.350/11. The length of chit fund depended upon the number of membership.” - 9 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 15. The evidence of PW-1 further discloses that accused has received Rs.3,00,000/- as a hand loan for 3% interest. The date of said lending Rs.3,00,000/- has not been stated by the complainant. Considering the total amount said to be given by the complainant to the accused as stated in her cross-examination, that does not come to total of Rs.10,00,000/-. 16. PW-1 has also admitted that she has invested Rs.3,00,000/- through accused in “Sahara India Priwar” scheme and she has got received receipts in that regard. PW-1 has also stated in her cross-examination that she has sold 20 tolas of gold ornaments to her relatives and advanced the money to the accused. In that regard also the complainant has not produced any evidence. PW-1 in her cross-examination has denied the suggestion that accused has received only Rs.1,00,000/- from her and towards repayment of Rs.2,00,000/-, she has obtained a blank cheque as a security. Ex.D-1 is certified copy of deposition of Girija Basavaraj Ajawan(PW-1) recorded in - 10 - NC: 2025:KHC-D:5890 CRL.A No. 100297 of 2017 C.C.No.350/2011. The said Girija is the appellant/complainant. On perusal of the said deposition and cross-examination of this complainant in the said case, the transaction as extracted in the cross- examination of PW-1 and as deposed by her in the cross- examination recorded in C.C.No.350/2011 are not corroborative. The said aspect will establish the defence of the respondent/accused that there is no legally enforceable debt/liability. Considering all these aspects, the learned Magistrate has rightly acquitted the respondent/accused for offence under Section 138 of N.I. Act by a reasoned judgment. There are no grounds made out for allowing this appeal. 17. In the result, the appeal is dismissed. Sd/- (SHIVASHANKAR AMARANNAVAR) JUDGE RKM/CT-ASC List No.: 1 Sl No.: 37