- 1 - CRL.A No.2091 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE G BASAVARAJA CRIMINAL APPEAL NO.2091 OF 2018 BETWEEN: SMT. PARVATHAMMA W/O LATE VENKATESH AGED ABOUT 54 YEARS, R/AT NO. 34, TATAGUNI AGARA CROSS, KANAKAPURA MAIN ROAD, BENGALURU - 560 070. ...APPELLANT (BY SRI. MURALIDHAR S.R., ADV.) AND: SRI. S. CHANDRA S/O SIDDEGOWDA AGED ABOUT 47 YEARS, RESIDING AT NO.555, 8TH MAIN, 2ND STAGE, KUMARASWAMY LAYOUT, BENGALURU-560078. …RESPONDENT (BY SRI. PUTTARAJU N. H., ADV.) THIS CRL.A IS FILED U/S.378(4) CR.P.C PRAYING TO SET ASIDE THE JUDGMENT DATED 29.06.2018, PASSED BY THE XVI A.C.M.M., AT BANGALORE IN C.C.NO.28112/2016, ACQUITTING THE RESPONDENTS/ACCUSED FOR THE OFFENCE P/U/S 138 OF THE N.I ACT. THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 05.11.2025 AND COMING ON FOR "PRONOUNCEMENT OF ORDERS" THIS DAY, THE COURT, DELIVERED THE FOLLOWING: - 2 - CRL.A No.2091 of 2018 CORAM: HON'BLE MR. JUSTICE G BASAVARAJA CAV JUDGMENT The appellant complainant has preferred this appeal against the judgment of acquittal dated 29th June 2018, passed in CC No.28112 of 2016 by XVI Additional Chief Metropolitan Magistrate, Bangalore City (for short “the trial Court”.) 2. For the sake of convenience, the parties herein are referred to as per their status before the trial Court. 3. Brief facts leading to this appeal are that the complainant filed complaint against accused for offences punishable under Section 138 of Negotiable Instruments Act. The case of the complainant is that accused is in acquaintance with the complainant for the past several years, and in such acquaintance, the accused sought for financial assistance to the tune of Rs.5,00,000/- from her during January 2016 to meet his domestic commitments. The accused stated that he will return back the same within three months. Considering the cordial relationship with the accused, the complainant advanced an amount of Rs.5,00,000/- by way of cash on 20th January 2016 with an intention to help him to get relieved from his commitments and with anticipation and faith that he would return the same by April 2016, as promised. It is stated she - 3 - CRL.A No.2091 of 2018 had got the amount from selling the immovable property at Kumaraswamy layout, Bangalore, which she had preserved for the performance of marriage of her daughters. It is also stated that the said money was given to her daughter to take the house on lease and the same was returned by her daughter during January 2016 and she has given the amount to the accused. The accused promised to repay the amount within a span of three months i.e. by April, 2016. However, the accused failed to repay the said amount. Thereafter, when she demanded repayment of the amount repeatedly, accused issued cheque bearing No.934846 dated 6th November, 2016 for Rs.5,00,000/- drawn on Karnataka Bank Ltd., Uttarahalli Branch, Bangalore, and assured that the same would be honoured on its presentation to the Bank. When the complainant presented the said cheque to the bank, the same was returned on 09th November, 2016 with endorsement “funds insufficient”. Thereafter, the complainant, left with no other alternative, got issued legal notice to the accused on 11th November, 2016 through RPAD calling upon him to pay the cheque amount within 15 days from the date of receipt of said notice. Despite service of the same, accused has neither replied, nor repaid the cheque amount to complainant. Hence, she has filed a complaint under section 138 of Negotiable - 4 - CRL.A No.2091 of 2018 Instruments Act. After taking cognizance, case was registered in CC No.28112 of 2016. Summons was issued. In response to summons, accused appeared before the Court and was enlarged on bail. Substance of plea was recorded. Accused pleaded not guilty and claimed to be tried. To prove the guilt of the accused, complainant examined herself as PW1 and got marked eight documents as Exhibits C1 to C8 and produced statement of accounts as Exhibit P9. On closure of complainant's side evidence, statement of the accused under section 313 of Code of Criminal Procedure was recorded. Accused denied the incriminating evidence appearing against him, however, he did not choose to lead any defence evidence on his behalf. 4. Having heard on both sides, the trial Court acquitted the accused for the offence punishable under Section, 138 of Negotiable Instruments Act. Being aggrieved by the impugned judgment of acquittal, complainant has preferred this appeal. 5. Sri S.R. Muralidhar, learned Counsel appearing for the Appellant/complainant would submit that the impugned judgment of acquittal is passed without proper application of judicious mind. He would submit that the respondent has not - 5 - CRL.A No.2091 of 2018 entered into the witness box and has not put-forth valid defence, so as to rebut the presumption under Section 139 of Negotiable Instruments Act and despite non-rebuttal of the presumptions and section 139 of the Act, the trial Court has erroneously passed the judgment of acquittal. The respondent has never disputed the issuance of cheque nor disputed the signature on Exhibit C1 which is marked as Exhibit C1(a). The respondent has categorically admitted the loan transaction with the appellant and on that sole ground itself the trial Court could have passed an appropriate order justifying the claim of the appellant. On the contrary, the trial Court failed to balance the case of prosecution and defence in a justifiable manner and passed the judgment of acquittal which has resulted in miscarriage of justice. The learned Counsel would further submit that the trial Court has failed to observe that the appellant had sufficient funds to advance the money which she had reserved for the purpose of marriage of her daughter by selling the immovable property. Hence, the very advancement doubted by the trial Court is against the settled legal principles. The learned trial Judge has failed to note that there was a financial transaction between the appellant and the respondent. The trial Court has not properly appreciated the evidence on record in its proper perspective. On all these grounds, it is - 6 - CRL.A No.2091 of 2018 sought to allow the appeal. To substantiate his arguments, the learned Counsel has relied upon the judgment of the Hon'ble Supreme Court in the case of ASHOK SINGH v. STATE OF UTTAR PRADESH and another reported in 2025 SCC ONLINE SC 706. 6. On the other hand, Shri Puttaraju N.H., learned Counsel appearing for the respondent accused would submit that the trial Court has properly appreciated the evidence on record in accordance with law and facts. He would further submit that it is not necessary for the accused to enter into witness box to support his evidence. He submits that there was no necessity even to give reply to the legal notice issued by the complainant. The accused has rebutted the presumption under section 139 of Negotiable Instruments Act during the course of cross examination of PW1. There are no grounds to interfere with the impugned judgment of acquittal passed by the trial Court and hence sought for dismissal of the appeal. In support of his submissions, the learned Counsel has placed reliance on the decision of Hon'ble Supreme Court in the case of BASALIBGAPPA v. MUDIBASAPPA reported in (2019)5 SCC 418. - 7 - CRL.A No.2091 of 2018 7. Having heard the learned Counsel appearing on behalf of both parties and on perusal of materials on record, the point that would arise for consideration is: 1. Whether The trial Court is justified in acquitting accused for the offence under Section 138 of Negotiable Instruments Act? 8. I have examined the materials placed before the Court. It is the case of the complainant that she has lent loan of Rs.5,00,000/- to the accused in the month of January, 2016. Accused has issued cheque No.934846 dated 6th November 2016, for Rs.5,00,000/- drawn on Karnataka Bank Limited, Uttarahalli Branch, Bangalore in the name of the complainant and the said cheque was presented for encashment, the same was returned with endorsement "funds insufficient". Thereafter, legal notice was issued to the accused calling upon him to repay the cheque amount. Notice was returned as “unclaimed”. Since accused failed to pay the cheque amount within fifteen days from the date of service of notice, the complainant filed complaint against accused under Section 138 of Negotiable Instruments Act. To substantiate her case, the complainant has produced cheque-Exhibit P1 dated 07th November, 2016 issued by the accused for Rs.5,00,000/- in the name of - 8 - CRL.A No.2091 of 2018 complainant-Smt. Parvathamma. On 15th November 2016, demand notice was issued to the accused to pay the cheque amount within fifteen days from the date of receipt of notice, but the notice returned with shara “unclaimed”. Thereafter, the accused failed to pay the cheque amount. On 22nd December 2016, complaint came to be filed by the complainant. A perusal of these materials makes it crystal clear that the complainant has complied with all the mandatory provisions of section 138 of Negotiable Instruments Act before proceeding against the accused. 9. The trial Court acquitted accused on the ground that the complainant has miserably failed to establish the financial capacity to lend the loan amount before the Court. In this regard, it is relevant to mention here the decision of the Hon'ble Supreme Court in the case of ASHOK SINGH (supra), wherein their Lordships have observed that the complainant is required to prove the source of funds unless the accused specifically disputes his financial capacity with substantive evidence. In the case on hand, accused has not received the legal notice issued by the complainant. The same was returned with shara “unclaimed”. The accused has not taken any legal steps against the complainant, even after appearance before - 9 - CRL.A No.2091 of 2018 the Court for misuse of the cheque. Accused has not led any evidence before the Court to show that the complainant had no financial capacity to lend the cheque amount. In view the above said decision, only if an objection is raised that the complainant was not in a financial position to pay the amount so claimed by the accused to have been given as a loan, only then the complainant would have to bring before the Court cogent material to indicate that he had the financial capacity and had actually advanced the amount in question by way of loan. In the case on hand, the respondent has not sent any reply to the legal notice. Hence, burden lies upon the accused to prove that the complainant had no financial capacity to lend the loan amount. 10. PW1 has clearly stated in the legal notice, in the complaint, and also in the evidence that the amount she had was from the sale proceeds of the house property at Kumaraswamy Layout, Bangalore, which she had kept for the marriage of her daughter. It is also stated that out of the said amount, she had paid some amount to her daughter for taking the house on lease and the said amount was returned by her daughter in the month of January 2016, and that amount she had lent to the accused to meet his commitments as a - 10 - CRL.A No.2091 of 2018 temporary arrangement, at his request. In addition to this, the complainant has produced the copy of the sale deed dated 26th February, 2013 and lease deed dated 18th September, 2013. The said documents were not marked, as they were not produced as Exhibits. 11. The accused has not placed any cogent and acceptable legal evidence before the Court to rebut statutory presumption under Section 139 of Negotiable Instruments Act. The trial Court has not properly appreciated the material on record in its proper perspective. Considering the evidence placed before this Court, and also keeping in mind the decision of Hon'ble Supreme Court in the case of ASHOK SINGH (supra), I am of the considered opinion that the complainant has proved the guilt of the accused beyond all reasonable doubt. Hence it is just proper to convict the accused for the offence punishable under Section 138 of Negotiable Instruments Act. Accused has issued cheque on 07th November, 2016. Keeping in mind the prevailing interest rate of the nationalised Bank, and the litigation expenses, it is just and proper to impose fine of Rs.8,00,000/-. Accordingly, I answer point that arose for consideration in the negative. In the result, I proceed to pass the following: - 11 - CRL.A No.2091 of 2018 ORDER i. Appeal is allowed; ii. The impugned judgment dated 29th June 2018, passed in CC No.28112 of 2016 by the XVI Additional Chief Metropolitan Magistrate, Bangalore City, is set aside; iii. Accused is convicted for the offence punishable under Section 138 of Negotiable Instruments Act; iv. The accused shall pay a fine of Rs.8,00,000/- within 30 days from the date of this order; v. In default of payment of fine amount, the accused shall undergo simple imprisonment for a period of three months; vi. Out of the amount, complainant is entitled to receive an amount of Rs.7,80,000/- as compensation under section 357A of Code of Criminal Procedure; vii. The remaining amount shall be remitted to the Government; - 12 - CRL.A No.2091 of 2018 viii. Registry is directed to send a copy of this judgment along with the trial Court record to the concerned Court to take necessary steps to recover the fine amount. Sd/- (G. BASAVARAJA) JUDGE lnn