- 1 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE V SRISHANANDA REGULAR SECOND APPEAL NO. 1023 OF 2021 (MON) BETWEEN: SRI. D.K. THIMMANNA S/O KARIYAPPA AGED ABOUT 48 YEARS R/O OPPOSITE TO MUTTON MARKET KOTE EXTENSION, HOSADURGA TOWN CHITRADURGA DISTRCT - 577 527 …APPELLANT (BY SRI. SIDDAPPA B M, ADVOCATE) AND: 1. SRI. D B THIMMANNA S/O DHAGADI BHEEMANNA AGED ABOUT 68 YEARS BUSINESS R/O OLD CANARA BANK ROAD HOSADURGA TOWN CHITRADURGA DISTRCT - 577 527 2. SRI BANASHANKARI CREDIT CO OPERATIVE SOCIETY REPRESENTED BY ITS SECRETARY/MANAGER MAIN ROAD, HOSADURGA TOWN CHITRADURGA DISTRICT - 577 527 …RESPONDENTS (BY SRI. R.P. NIDGALMUTT, ADVOCATE FOR R2; R1 IS SERVED AND UNREPRESENTED) Digitally signed by MALATESH K C Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 THIS RSA IS FILED UNDER SEC.100 OF CPC., AGAINST THE JUDGMENT AND DECREE DATED 07.09.2021PASSED IN RA.NO. 31/2018 ON THE FILE OF THE SENIOR CIVIL JUDGE AND JMFC, HOSADURGA, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGMENT AND DECREE DATED 18.08.2018 PASSED IN OS.NO. 103/2014 ON THE FILE OF THE C/C PRINCIPAL CIVIL JUDGE AND JMFC, HOSADURGA. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE V SRISHANANDA ORAL JUDGMENT Heard Sri. B.M. Siddappa, learned counsel for the appellant. None appears for the respondents. 2. First defendant is the appellant challenging the judgement of the First Appellate Court in R.A.No.31/2008 whereby suit of the plaintiff came to be decreed reversing the dismissal of the suit in O.S. No.103/2014. 3. The facts of the case which are utmost necessary for disposal of the present appeal are as under: - 3 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 A suit for recovery of money in a sum of Rs.3 Lakhs came to be filed by the plaintiff with interest at 18% per annum from the date of suit till realization by contending that the defendant has borrowed money in a sum of Rs.3 Lakhs in the month of October 2013 to meet the legal necessity of his family. He had promised to repay the same within two months. When plaintiff demanded the money, defendant said to have issued the cheque bearing No.138004 dated 01.01.2014 drawn on Karnataka Bank Limited, Hosadurga branch. 4. Said cheque was presented in the Bank of the plaintiff in Sree Seetha Raghava Souharda Sahakari Bank, Hosadurga. Said cheque on presentation, came to be dishonoured with an Endorsement 'insufficient funds'. Plaintiff issued the legal notice calling upon the defendant to make good the amount on 08.01.2014. However, the defendant did not claim the registered article and therefore plaintiff has constraint to file the suit. - 4 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 5. There was also proceedings before the Criminal Court under Section 138 of the Negotiable Instrument Act. 6. In the suit, defendants entered appearance and filed written statement denying the plaint averments in toto and contended that plaintiff has somehow able to collect the Cheque from the defendant and forged the signature of the defendant in the Cheque and therefore suit is to be dismissed. 7. Learned Trial Judge after framing necessary issues recorded evidence of the parties and dismissed the suit of the plaintiff. 8. Being aggrieved by the same, plaintiff filed an appeal before the First Appellate Court in R.A.No.31/2018. 9. Learned Judge in the First Appellate Court after securing the records heard the arguments of the parties and allowed the appeal inter alia holding in paragraphs No.17 to 21 as under : - 5 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 "17. The defendant to substantiate his defence got examined himself as DW.1. He has reiterated the contents of the written statement averments in his examination-in-chief. The issuance of cheque and borrowing of hand loan specially disputed by defendant. Under such circumstances, the burden lies upon the plaintiff to prove his case beyond preponderance of probabilities. It is not disputed that plaintiff and defendants are relatives. It is also not disputed the plaintiff frequently visiting the house of defendant. It is the defence of the defendant is that the plaintiff thefted the cheque and filed false suit. The said allegation is specially denied by the plaintiff. The plaintiff specially deposed that the defendant borrowed loan of Rs.3,00,000/- during the month of October, 2013 and agreed to pay the said amount within 2 months. But. the defendants fails to pay. When plaintiff demanded frequently at last the defendant issued Ex.P.1 cheque. 18. The It is to be noted that the defendants also disputed the signature on Ex.P.1 cheque. But the defendant admits Ex.P.1 cheque belongs to him. very transaction is denied by the defendant. It is to be noted that, the plaintiff in order to prove that the defendant had transaction with plaintiff and borrowed loan and issued disputed cheque got produced Ex.P.10 i.e..the deposition in - 6 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 CC.No.229/2014. It is to be noted that, CC.No.229/2014 is filed by the son of plaintiff against the defendant for recovery of cheque amount U/s 138 of NI Act. It is to be noted that, the said cheque and endorsement issued by bank is also produced by plaintiff as per Ex.P.7 and 8. All these documents not at all disputed by the defendants. The Ex.P.10 is the deposition of defendant deposed in CC.No.229/2014. In Ex.P.10 the defendant clearly deposed that he has taking ration from plaintiff and at that time he had issued cheque for security. Further, the defendants specifically deposed that from plaintiff he borrowed Rs.1,00,000/- for development of his land by giving cheque as security. It is to be noted that the contents of Ex.P.10 also confronted to defendant during his cross. He has also admits the contents of Ex.P.10 document. This Ex.P.10 document itself reveals that the defendant had a transaction with plaintiff and he issued cheque by borrowing amount. The deposition of defendant in CC.No.229/2014 given as per Ex.P.10 itself clearly reveals that the plaintiff had a capacity to lend money to defendant. Further, it is also clear from Ex.P.10 and oral evidence of defendant that he obtained loan from the plaintiff and issued the cheque. Hence, I come to the conclusion that the oral and documentary evidence of plaintiff corroborated each other. The plaintiff has - 7 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 successfully established that the defendant obtain loan of Rs.3,00,000/- and issued disputed cheque for repayment. When issuance of cheque proved by the plaintiff the burden is upon the defendant to rebut evidence adduced by the plaintiff. 19. The defendant has taken the defence that he has not issued disputed cheque to the plaintiff. It is to be noted that, when the defendant himself admits and deposed as per Ex.P.10 that he obtained amount for development of land from plaintiff and issued cheque. Then it is for the defendant to make clear that which cheque bearing number he has issued. But, the said ambiguity not cleared by the defendant. Under such circumstances the presumption can be raised in favour of the plaintiff. 20. Further it is to be noted during cross the defendant specially stated “¤¦-1 ZÉPÀÄÌ £À£Àß SÁvÉUÉ ¸ÀA§A¢ü¹zÀÄÝ JAzÀgÉ ¸Àj". The defendant himself admits issuance of cheque then the burden is upon the defendant to show that the said cheque was not issued for the legally enforceable debt. But, in this regard, the defendant has not placed any material evidence before the trial Court. - 8 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 21. The another defence taken by the defendant is that the plaintiff stolen the cheque from his house. It is to be noted during cross he himself admits he issued Ex.P.1 cheque to the plaintiff. This piece of evidence shows that the evidence of defendant is not trustworthy. It is to be noted that the defendant is specifically averred that the plaintiff stolen cheque and miss utilized it and filed false suit. When, such contention is taken by the defendant it is for him to prove the same. Further, the defendant not explained in house where he kept the cheque. Further, the defendant not explained when his cheque was lost why he was not taken legal action against the plaintiff. Therefore, I am of the opinion that, the bare defence of the defendant without any specific proof cannot be accepted. Therefore, what can be ascertain from barred contention of defendant is that only to defeat the right of the plaintiff has put-forth his defence without any materials. Further, it is well settled law bare denial with regard to the issuance of cheque and signature of the defendant on disputed cheque would not sufficient to prove defence unless and until defendant is able to establish that no such transaction has taken place or that the signature found in the Ex.P.1 cheque does not belong to him. In other words, the such material aspect is to be sufficiently should be rebutted by the defendant. But, the defendant fails to prove his - 9 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 defence by placing sufficient and cogent evidence. Therefore, all these circumstances, clearly goes to show that there has been legally recoverable debt, in this suit as against the defendant and the fact that he has committed default and repayment of Ex.P.1 cheque amount and render him to face the legal consequences of suit. Therefore, I am of the opinion that the plaintiff successfully able to prove the defendant is liable to pay the amount mentioned in Ex.P.1 cheque. All these facts where not properly appreciated by the trial court and erred and in coming to the conclusion that the plaintiff fails to establish his case and also erred in dismissing the suit. Hence, the judgment and decree passed by the trial court is illegal, perverse and against the evidence adduced by the parties and it requires to be interfered by this court with respect to item No.8 property. So I hold that, appellant has made out grounds to set aside the judgment and decree passed by the trial Court. According I answer Point No.1, 2, 5 and 7 are in the Affirmative and Point No.3 in the Negative." 10. Being aggrieved by the same, the defendant has filed the present appeal. Respondent-plaintiff and - 10 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 second defendant served within notice and remained absent. 11. Sri. B.M. Siddappa, learned counsel for the appellant reiterating the grounds urged in the appeal, request the Court to admit the appeal on following grounds and substantial questions of law: GROUNDS :  The judgment and decree passed by the First Appellate court is highly illegal besides being erroneous.  The Judgment and decree passed by the First Appellate Court, is based on surmises and against the probabilities of the case. As such same is liable to be set aside.  The First Appellate Court completely misread the both documentary and oral evidence on record while passing impugned Judgment and decree as such the Judgment and decree of the First Appellate Court is liable to be set aside.  The First Appellate Court is grossly erred in recording the finding that the plaintiff had established that the defendant had borrowed hand loan of Rs.3,00,000/- in the month of October 2013 and for the repayment of said amount the defendant issued disputed cheque though - 11 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 there is no corroborative evidence and cogent material on records except self serving testimony of the plaintiff.  The First Appellate Court grossly erred in holding that the cheque was dishonored for insufficient funds.  The First Appellate Court though the material evidence on record clearly goes to show that the cheque in question was stolen but ignoring said evidence on record, records the finding that the defendant failed to prove the same which is contrary to the evidence on record.  The First Appellate Court has grossly erred in placing reliance on Ex.P-10 which is the deposition of the defendant in CC No.229/2014 which was filed by the son of the plaintiff though same cannot be relied upon. The transaction in CC No.229/2014 is different. It is stated in the said deposition with regard to purchasing of the ration and issuing of the cheque as security. In the said deposition the defendant clearly stated that he has not at all the borrowed the loan and cheque issued was misuse by the plaintiff. He has denied borrowing of the loan in the said deposition but the First appellate court instead of taking evidence adduced in this case has taken in to consideration the deposition in the said criminal case and passed the impugned Judgment and decree by not considering the evidence in entirety and by misreading the same. As such the Judgment and decree passed by the First Appellate Court on the basis of the Ex.P-10 is liable to be set aside. - 12 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021  The First appellate Court not at all consider the vital admission of PW-1, he has clearly admitted in the cross examination & did not know the family necessity of the defendant at the time of lending Rs.3,00,000/-. The pleading in the plaint that defendant borrowed the loan for the family necessity is not at all supported by any independent evidence per contra same is falsified by his own admission that he did not know what was the family necessity was in existence at the time of lending the loan by him to the defendant when admittedly they are relatives. As such the finding of the first Appellate Court that amount was lent for legal necessity fas no basis at all. As such the finding of the First Appellate Court is liable to be set aside.  It is pertinent to mention here that the First appellate Court completely misread the evidence of the PW-1 and failed to consider the unequivocal admission of the PW-1 with regard to capacity to lend the amount. The PW-1 in unequivocal terms admit that by withdrawing of Rs. 3,00,000/- amount from his bank account he has advance the loan to the defendant but though he could have produce the passbook entries or certified copy of the his bank account extract to show that he was having the money in his bank account at that time but he did not produce any document though available as such the finding recorded by the trail court that plaintiff failed to prove the advancing of the loan is correct and supported by the admission of the PW-1 but Appellate Court not at - 13 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 all considered the same as such the finding of the First appellate Court is based on surmise/and contrary to the admission of the PW-1.  It is submitted that the First Appellate Court grossly erred in not noticing the fact that the admitted signature of the defendant on the vakalath of the suit and signature on the Ex.P-1 does not tally at all. But the First Appellate Court placing on the certified copies of the deposition given the Criminal case comes to the conclusion that signatures tallies though said documents are subject to finding recorded in the said case.  The plaintiff has not at all proved the hand writing and signature found on Ex.P-1 as claimed by him though is the burden on him to prove the signature of the defendant found on Ex.P-1. The trial court considering this factual aspect into consideration records the findings that plaintiff failed to prove execution of Ex.P-1. But the Appellate Court not at all considered this aspect of the matter simply referring to Ex.P-10 which is bad in law.  The First Appellate Court considered the case of the plaintiff as if the case instituted under Sec. 138 of the Negotiable Instrument Act ignoring the proceedings instituted by the plaintiff is a civil in nature and the presumption as applicable to 138 proceedings and same is not applicable to the Civil suit. As such the Judgment and decree of the First Appellate Court is bad in law. - 14 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021  First appellate Court failed to taken into consideration of the fact that the PW-1 clearly admitted of lending of the amount to several persons and also filing of the case against them for recovery. This goes to shows that the plaintiff is doing money lending business without any valid license. Therefore, conduct of the plaintiff goes to show that he is a profession money lender and knew that how transaction has to be made. In the instant case admittedly he has not all produced any documents with regard to possessing of the amount on that day and also not produced Bank account extract as admitted by him that after withdrawing the amount from his bank account he has paid the loan to the defendant. As such the plaintiff version cannot be believed at all. Therefore, finding of the first Appellate Court is contrary to the evidence on record, clear admission of the PW-1, non production of the documents available with him and as such the finding of the First Appellate Court is liable to be set aside. SUBSTANTIAL QUESTION OF LAW: 1. Whether First Appellate Court right in law in reversing Judgment and Decree passed by Trial court when same is based on the Material evidence on record. 2. Whether First Appellate Court right in law in placing reliance on Ex.P-10, the deposition recorded in Criminal case on which in the said case the finding has to be recorded for holding that the Ex.P-1 was executed by - 15 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 the defendant No.1 though the signature on Ex.P-1 and contents of the Ex.1 was seriously disputed ? 3. Whether First Appellate Court is right in law in holding that the plaintiff has proved the loan was advanced by him to the defendant is for his legal necessity though plaintiff admitted in unequivocal terms that he did not know about the legal necessity which was in existence at the time of lending the loan? 4. Whether First Appellate Court is right in law in placing negative burden on the defendant to prove that he has not borrowed the loan and not issued the cheque and consideration not passed though it is the person who approached the court has to establish the initial burden on him? it is m 5. Whether First Appellate Court is right in law in treating the original suit proceedings as that of the proceedings initiated under Sec.138 of the Negotiable Instrument Act? 6. Whether First Appellate Court is right in law in presuming the issuance of cheque, passing of consideration, execution of the document Ex.P-1 when it is specifically denied by the defendant without discharging the initial burden which is on the plaintiff? - 16 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 12. In the light of the arguments put-forth on behalf of the appellant, this Court perused the material on record meticulously. Admittedly, Cheque belongs to the defendant. Account of defendant was maintained in the Karnataka Bank. 13. How the subject matter of cheque has reached the hands of the plaintiff is not explained by the defendants. 14. Defendants took a contention that the signature found in Ex.P.1 – cheque is forged. In this regard, no attempt is made to get the hand writing expert appointed for showing that the signature found in Ex.P.1 was forged by the plaintiff. 15. Under Section 118 of the Negotiable Instruments Act, plaintiff enjoys the presumption that cheque amount mentioned therein and other particulars are presumed to be correct unless contrary is proved by the person who issued the cheque. - 17 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 16. In that regard, learned Judge in the First Appellate Court in paragraph No.17, has discussed the probative value of the oral evidence of the defendant in detail. 17. Taking note of the fact that the cheque is belonging to the defendant and in view of the presumption, in the absence of any rebuttal evidence, decreeing the suit of the plaintiff by the First Appellate Court is just and proper. 18. In fact the First Appellate Court by resorting to Section 80 of the Negotiable Instruments Act, should have directed interest to be payable at the rate of 18% per annum but has granted 6% per annum. 19. Plaintiff has not filed any cross appeal or cross- objection challenging the awarding of interest only at 6% per annum. 20. Taking note of these aspects of the matter, this Court is of the considered opinion that the substantial - 18 - HC-KAR NC: 2025:KHC:37740 RSA No. 1023 of 2021 questions of law raised in the appeal memorandum, do not merit for further consideration. 21. Hence, the following: ORDER Appeal is meritless and hereby dismissed. Sd/- (V SRISHANANDA) JUDGE SNC from paragraph Nos.1 to 13; KAV from paragraph Nos.13 to end. List No.: 1 Sl No.: 40 CT: BHK