- 1 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF MARCH, 2026 BEFORE THE HON'BLE MR. JUSTICE M.G.S. KAMAL CRIMINAL APPEAL NO. 1696 OF 2019 (A) BETWEEN: POORNIMA K.S., D/O SRI SIDDAIAH M., AGED ABOUT 38 YEARS, 1ST STAGE, OPP. TO MINI VIDHANASOUDHA, 1ST CROSS, KUVEMPUNAGARA, RAMANAGARA TOWN AND DISTRICT. …APPELLANT (BY SRI. KESHAVA MURTHY C N.,ADVOCATE) AND: SRI. PRASHANTH R., S/O M R RAMEGOWDA AGED ABOUT 37 YEARS, NO.61, VASANTHA GREESHMA NILAYA 17TH B CROSS, 2ND STAGE GNANABHARATHI LAYOUT NAGADEVANAHALLI BANGALORE-560 056. …RESPONDENT (BY SRI. KUMARA K.G.,ADVOCATE) THIS CRL.A. IS FILED UNDER SECTION 378(4) CR.P.C PRAYING TO SET ASIDE THE JUDGMENT OF ACQUITTAL DATED: 03.08.2019 PASSED BY THE III ADDITIONAL DISTRICT AND SESSIONS JUDGE, RAMANAGARA IN CRL.A.NO.32/2018 AND CONFIRM THE JUDGMENT AND ORDER OF CONVICTION AND SENTENCE DATED 01.12.2018 IN C.C.NO.639/2016 Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 PASSED BY THE ADDITIONAL CIVIL JUDGE AND JUDICIAL MAGISTRATE FIRST CLASS, RAMANGARA - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE P/U/S.138 OF NI ACT. THIS APPEAL, COMING ON FOR ARGUMENTS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL ORAL JUDGMENT This appeal is by the complainant aggrieved by the judgment and order dated 03.08.2019, passed in Crl.A.No.32/2018 on the file of III Additional District and Sessions Judge, Ramanagara (hereinafter referred to as 'the First Appellate Court'), by which the appeal filed by the accused-respondent was allowed, setting aside the judgment and order dated 01.12.2018 passed in C.C.No.639/2016 passed on the file of Additional Civil Judge and JMFC, Ramanagara (hereinafter referred to as 'the trial Court'). 2. The case of the complainant-appellant is that accused- respondent being his relative and close acquaintance had approached him on 12.11.2015 for financial aid requesting for a hand loan in a sum of Rs.4,00,000/- to clear his debts which he had incurred on account of his marriage and had promised to - 3 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 repay the said loan within four months. He had also issued a posted cheque bearing No.425565 for a sum of Rs.4,00,000/-, mentioning the date as 12.04.2016 drawn on State Bank of India, Airport Road, Bengaluru. Upon his further instruction, complainant-appellant presented the said cheque for encashment to her bank, State Bank of Mysore, Ramanagara. The said cheque returned with an endorsement ''Funds Insufficient'', which was intimated to the complainant- appellant, on 27.04.2016. Accordingly, complainant-appellant caused issuance of notice on 03.05.2016, calling upon the accused-respondent to pay the cheque amount within 15 days from the date of receipt of the said notice. The said notice was sent through Registered Post Acknowledgement Due and the same has been duly received by the accused-respondent. That instead of complying with the demand made thereunder accused-respondent caused issuance of an untenable reply on 17.02.2016. Finding no other alternate, complainant-appellant filed the complaint under Section 200 of the Cr.P.C. against the accused-respondent for the offence punishable under Section 138 of Negotiable Instruments Act, 1881. - 4 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 3. That the trial Court took cognizance and recorded the sworn statement and then proceeded with issuance of process. The complainant-appellant examined herself as PW1 and exhibited nine document marked as Exs.P1 to P9. Accused- respondent has not led any oral or documentary evidence. 4. The Trial Court framed the following points for its consideration: '' 1. Whether the complainant proves the accused is liable to pay Rs.4,00,000/- under the cheque issued for his discharge of the liability, as cheque was dishonored and even after service of notice in the stipulated period, the accused failed to arrange for the same and there by committed an offence punishable under Section 138 of the NI Act? 2. What Order? '' 5. On appreciation of the evidence and pleading, held the issue No.1 in the affirmative. Consequently, convicted the accused-respondent for the aforesaid offence and sentenced him to pay fine of Rs.4,15,000/- and in default thereof to undergo simple imprisonment for four months. Being aggrieved by the said judgment and order the accused-respondent preferred an appeal in Crl.A.No.32/2018 before the First Appellate Court. - 5 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 6. The First Appellate Court has framed the following points for its consideration: 1) Whether the appellant does prove that the court below has not appreciated the oral and documentary evidence placed before it and without appreciating the same, has passed erroneous judgment questioned in the appeal under consideration? 2) Whether the appellant does prove that there are sufficient grounds to interfere with the impugned judgment dated 01.12.2018 passed in C.C.No.639/2016 as the same is not sustainable under law? 3). What Order? '' 7. On re-appreciation of the evidence, the First Appellate Court allowed the appeal and set-aside the judgment and order dated 01.12.2018 passed by the trial Court. Being aggrieved, complainant-appellant is before this Court. 8. Learned counsel for the complainant-appellant taking this Court through the records submits that the trial Court had passed a well-reasoned judgment and order, taking into consideration the oral and documentary evidence produced by the complainant-appellant establishing existence of a legally recoverable debt, which ought not to have been reversed by the First Appellate Court. That merely because agreement as per Ex.P7 was bearing the date as 12.11.2015, while the stamp paper was obtained on 11.11.2015, the First Appellate Court - 6 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 has taken serious exception to this to conclude that there was no possibility of such an agreement coming into existence, much prior to the loan transaction between the parties. Thus on this sole ground, he submits that the First Appellate Court proceeded to allow the appeal and to set-aside the judgment and order of the trial Court, which is impermissible. 9. That the complainant-appellant has proved and established her financial capacity to pay the loan amount as sought for by the accused-respondent. In that, he refers to document at Ex.P6, deed of sale dated 28.11.2014, in terms of which complainant-appellant had sold her property in favour of certain Jayaprakash Shetty and Monisha Shetty for a sum of Rs.18,13,500/-. That despite the said document made available, the First Appellate Court has found that it was not possible to believe the complainant-appellant retaining the said consideration for a period of one year, such that, she would make the payment to the accused-respondent. That such a conclusion arrived at by the First Appellate Court is contrary to the evidence made available on record. 10. He relies upon the judgments in the case of ; - 7 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 1. Sanjabij Tari Vs. Kishore s. Borcar and another decided in Crl.A.No.1755/2010 on 25.09.2025. 2. Bir Singh Vs. Mukesh Kumar reported in (2019) 4 SCC 197. 3. Rohitbhai Jivanlal Patel Vs. State of Gujarat and another reported in AIR 2019 SCC 1876. 11. Referring the above, he submits that in the light of the facts, circumstances and evidence led in by the complainant-appellant, apart from the fact of she being financially capable to lend the loan, in the absence of any dispute by the accused-respondent regarding her signatures found on the cheque as well as on the agreement as per Ex.P7, presumption is required to be drawn, which the First Appellate Court has erred. Therefore the impugned judgment and order suffers from perversity, warranting interference at the hands of this Court. 12. Per contra, learned counsel for the accused- respondent submits that the First Appellate Court was justified in not relying upon Ex.P7, the repayment undertaking allegedly executed by accused-respondent and the said document has come into existence much prior to the actual loan transaction. - 8 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 That the First Appellate Court has rightly appreciated the fact that the stamp paper could not have been purchased one day prior to the date of loan transaction. That the accused- respondent and complainant-appellant are relatives and close acquaintance. That the complainant-appellant was frequenting the house of the accused-respondent and was in a position to take away the cheque which was kept without her knowledge and the same has been misused. That there is no loan transaction of any nature whatsoever. That the sale of the property belonging to the complainant-appellant was made a year ago and as rightly taken note of by the First Appellate Court, he submits there is no possibility of she retaining the cash with her for about one year and she has not produced any bank account details for she having the money. Therefore, he submits that no error can be found with the judgment and conclusion arrived at by the First Appellate Court. Hence, seeks for dismissal of the appeal. 13. Heard and perused the records. 14. Point that arise for consideration is; - 9 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 '' 1. Whether the First Appellate Court in the facts and circumstance of the case is justified in acquitting the accused-respondent for the offence punishable under Section 138 of the N.I. Act?'' 15. The Apex Court in the case of Basalingappa Vs Mudibasappa reported in (2019) 5 SCC 418, referring to its earlier judgments on the principles of presumption provided under Sections 118 and 139 of the N.I. Act, at paragraph 25 to 25.5 has held as under: 25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner: 25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence." - 10 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 16. Admittedly, accused-respondent and complainant- appellant are related and close acquaintance. Complainant by producing Ex.P6-deed of sale dated 28.11.2014, has prima- facie brought the material on record to show her financial capacity and ability to pay the loan amount. In terms of the said deed of sale complainant has sold her property for a sale consideration of Rs.8,13,500/-. The said factum has not been disputed. It may be that the sale transaction has taken place almost a year prior to the date of transaction. That cannot be a ground to disbelieve or to doubt her capacity or ability to retain a sum of Rs.4,00,000/- which was paid by her to the accused- respondent. 17. The cross examination of the complainant-appellant indicate that the accused-respondent has taken a stand of cheque being issued to a counsel as a security, which was apparently misused by the complainant-appellant. Such a stand being taken by the accused-respondent, she has not explained the same in her evidence. Issuance of a cheque and signature found in the cheque as well as in the agreement as per Ex.P7 is not disputed by the accused-respondent. Though, in the - 11 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 argument it was submitted by the learned counsel for the accused-respondent that taking advantage of the acquaintance complainant-appellant had gone to her house and taken away the cheque, which was misused, the same runs contrary to the stand taken in the cross-examination of PW1, wherein the following is suggested: "ಾನು ಆೋ ೆ ಹಣವನು ನಗದು ರೂಪದ ೕರುೇೆ. ಆೋಗೂ ಾಗೂ ನನ ನಡುೆ ಾವ !ೇ ಹಣ"ಾ#ನ ವ$ವಾರ ಇರಲ ಎಂದೆ ಸ*ಯಲ, ಆೋ ನನ ವ,ೕಲಾದ ೆ-.© .ವಾಜು ರವರ ಹ0ರ ರೂ.50 1ಾ2ರ ಹಣವನು 1ಾಲಾ3 ಪ4ೆದು"ೊಂದು5 ಅದರ ಭದ8ೆ ಾ3 ಅವ* ೆ 9ಾ :ೆ;ನು ೕರುಾೆ ಎಂದೆ ಸ*ಯಲ. ಸದ* .ವಾಜು ರವ* ೆ ೕದ :ೆ;ನು ಾನು ದುರುಪ<ೕಗಪ#"ೊಂರುೇೆ ಎಂದೆ ಸ*ಯಲ. ಆೋ ನನ ೆ ಮುಚ?@"ೆಾ3 ಬೆದು"ೊಟCಂತಹ !ಾಖFೆಯನು ಾನು ಾ$ಾಲಯ"ೆG ಾಜರುಪ#ರುೇೆ. ಸದ* ಮುಚ?@"ೆ ೆ ಆೋ, ಅವನ ತಂ!ೆ ಾH, ಆತನ ತಮIಂJರು, ಇಬKರು 1ಾL!ಾರರು ಾಗೂ ಾನು ಸM Nಾರುೇೆ. ಆೋ ನನ ಕ:ೇ* ೆ "ಾನೂನು ಸಲೆಗಳನು ಪ4ೆದು"ೊಳQಲು ಬರು0ದ5 ಸªÀÄಯದ ಾನು ಆತಂದ "ೆಲವ !ಾಖFಾ0ಗ@ ೆ ಸMಯನು ಪ4ೆದು"ೊಂರುೇೆ ಎಂದೆ ಸ*ಯಲ. ಆೋ ಸ"ಾR* ೌಕರಾ3ದು5, ಆತ ೆ ೊಂದೆ "ೊಡುವ ಸಲುಾ3 ಸುಳTQ !ಾಖFಾ0ಗಳನು ಸೃVC Nಾರುೇೆ ಎಂದೆ ಸ*ಯಲ" . 18. If the stand of the accused-respondent is that the said cheque was given by him to one Shivaraj, from whom he had apparently taken a sum of Rs.50,000/- as loan and the cheque in question was given as a security, burden therefore has to be discharged by the accused-respondent in the manner - 12 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 known to law. The complainant-appellant, as noted above having discharged the initial burden of cheque having been issued towards discharge of the liability and the complainant- appellant having proved her financial capacity, statutory presumption as per the provision of Section 118 of the N.I. Act needs to be drawn in favour of the complainant-appellant. Accused-respondent having taken this specific stand on the misuse of the cheque has not whispered anything of the same either in the reply notice or by leading any cogent evidence in this regard. These aspects of matter has not been taken into consideration by the First Appellate Court. 19. It may be that the stamp paper has been purchased a day before the date on which it is executed. Perusal of the stamp paper indicate that the same has been purchased on 11.11.2015 at 05:59 p.m., in the name of both complainant- appellant as well as the accused-respondent. The document seem to have been executed on 12.11.2015. It is not unusual that a stamp paper is purchased a day before and the same is executed on the following day. Considering the relationship between the parties, the same cannot be a ground to set-aside the judgment and order passed by the trial Court. - 13 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 20. Though in the reply notice at Ex.P5, the accused- respondent has raised the grounds of complainant-appellant not having financial capacity to lend the loan, that the complainant-appellant who was frequenting the house of the accused-respondent had somehow got the cheque from the house of accused-respondent. It is also alleged that the complainant-appellant is guilty of commission of offence of forgery, breach of trust along with one Shivaraju. No evidence has been led-in, in this regard by the accused-respondent. Mere suggestions when denied, would not amount to rebuttal of presumption. The accused-respondent has failed to rebut the statutory presumption available to the complainant-appellant. 21. The First Appellate Court thus in the considered view of this Court has erred in not appreciating the aforesaid aspects of the matter while setting aside the judgment and order passed by the trial Court. Point raised above is answered accordingly. Appeal succeeds, with the following: - 14 - HC-KAR NC: 2026:KHC:14251 CRL.A No. 1696 of 2019 ORDER (i) Appeal is allowed. (ii) The judgment and order dated 03.08.2019, passed in Crl.A.No.32/2018 on the file of III Additional District and Sessions Judge, Ramanagara is set aside and the judgment and order dated 01.12.2018 passed in C.C.No.639/2016 passed on the file of Additional Civil Judge and JMFC, Ramanagara is confirmed. Sd/- (M.G.S. KAMAL) JUDGE RL List No.: 1 Sl No.: 42