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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 3RD DAY OF FEBRUARY 2015

BEFORE

THE HON'BLE MR. JUSTICE BUDIHAL R.B.

CRIMINAL APPEAL No.743/2010

BETWEEN:

Mr B Shivaram
S/o Boraiah
Aged about 47 years
“Raghavendra Hotel”
Shobhashri Vasavi
No.319/9, Opposite to B.H.E.L.,
Mysore Road
Bangalore-560 026. .. APPELLANT

(By Sri. B R Deepak, Adv. for

M/s B R Deppak & Associates)

AND:

Mr M V Venkatesh
S/o M V Venkatappa
Aged 46 years
Occ: Clerk at Syndicate Bank
R/o No.88, 2nd Main Road
6th Cross, Kengeri Branch
Kengeri Satellite Town
Bangalore. .. RESPONDENT

(By Sri. Srinivas R, Adv.

For B & S Associates)
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This criminal appeal is filed under Section 378(4)

Cr.P.C praying to set aside the aforesaid impugned judgment
and order dated 30.06.2010 passed by the XV Addl. C M M,
Bangalore in C.C.No.16364/2009 acquitting the
respondent/accused for the offence punishable under
Section 138 of N.I. Act.

This appeal having been heard and reserved for orders,

coming on for pronouncement of judgment, this day, the
Court delivered the following:

JUDGMENT

This is the appeal preferred by the complainant being

aggrieved by the judgment and order dated 30.6.2010

passed by the XV Addl. CMM Court, Bengaluru City in C.C.

No.16364/2009.

2. Brief facts of the appellant-complainant’s case

before the trial court is that respondent-accused availed the

sum of Rs.3.00 lakh from the complainant in October 2008

for his urgent needs and towards repayment of the said

amount, the respondent-accused issued a cheque in favour

of the complainant for the sum of Rs.3.00 lakh dated

14.3.2009 drawn on Syndicate Bank Gandhinagar Branch,

Bengaluru. The complainant presented the cheque for

encashment through his banker State Bank of Mysuru,

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Mysore Road, Bengaluru and it was dishonored with

endorsement ‘insufficient funds’ and ‘account dormant’.

The complainant issued a legal notice as per Ex.P.6 through

his Counsel by RPAD calling upon the respondent-accused

to pay the amount of cheque. In spite of service of notice,

the respondent-accused had failed to pay the amount stated

in the cheque. Hence, the complainant filed a complaint

under Section 200 Cr.P.C. before the trial court. As per the

summons, the respondent-accused appeared before the

court and trial was held. Ultimately, the trial court by its

judgment has, considering the oral and documentary

evidence, i.e., the evidence of P.Ws.1 and 2 and the

documents Exs.P.1 to P.11 and Ex.D.1, acquitted the

accused holding that the complainant has failed to prove the

case against the respondent-accused. Being aggrieved by

the same, the appellant-complainant has preferred the

preset appeal on the grounds that the trial court has not

applied its mind properly while passing the impugned

judgment and order. It has failed to take note of the

documents furnished by the appellant-complainant at the

time of evidence which clearly indicates the deliberate

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intention of the respondent-accused in issuing the cheque

and committing a crime as per Section 138 and 142 of the

Negotiable Instruments Act, (for short ‘the Act’) beyond any

reasonable doubt. The reasons adopted by the trial court for

acquitting the respondent-accused are erroneous. The trial

court has ignored that the respondent-accused has utterly

failed to rebut the presumption raised under Section 139 of

the Act. The trial court has also neglected to consider

several judgments of the Hon’ble Supreme Court and of this

Court while passing the judgment. The judgment is based

on conjectures and surmises and it needs perusal of the

entire case records to set aside the judgment and to convict

the respondent-accused. Hence, the appellant-complainant

sought to allow the appeal.

3. Learned counsel appearing for the appellant-

complainant, during the course of the arguments, made

submission that issuance of the cheque and the signature on

the cheque has been admitted by the respondent-accused

and hence, there is initial presumption as per Sections

118(a) and 139 of the Act in favour of the complainant and

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this aspect has been totally misconstrued by the trial court.

It is also his submission that unless and until, the accused

has rebutted the said presumption with cogent and

satisfactory materials, the complainant is not suppose to

explain the sources of income and his financial capacity to

advance loan of Rs.3.00 lakh to the accused. Even then, the

complainant, in his evidence before the trial court, has

stated on oath that the amount reserved for complainant’s

daughter’s marriage was given to the accused. It is also

submission of the learned Counsel that merely, the ground

that the complainant has failed to pay the installments to

the bank to repay the loan amount borrowed from the bank

itself is not sufficient to come to the conclusion that he was

not having financial capacity to advance loan of Rs.3.00 lakh

to the respondent-accused. The learned Counsel submitted

that even though notice was served, the respondent-accused

has not sent any reply to the said notice. The evidence on

record were wrongly interpreted and wrongly appreciated by

the trial court. Hence, submitted that the judgment and

order under appeal is illegal. The learned Counsel further

submitted that there was no property dispute between the

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accused and the complainant’s side and otherwise, the

accused could have filed a suit. The bank statement relied

upon by the accused is helpful to the complainant himself.

Hence, submitted to allow the appeal and set aside the

judgment and order. In support of his contention, learned

counsel for the appellant has relied upon the following

decisions filed along with memo dated 14.1.2015.

1. 2007 Vol.5.S.C 264 (Kamal S Vs. Vidhyadharn M J)

2. ILR 2008 KAR 643 (M/s Q-Soft System & Solutions

(P) Limited Vs. H.N. Giridhar

3. ILR 2006 KAR 4672 (J. Ramaraj Vs. Hiyaz Khan)

4. JT 2002 Vol.6 S.C 119 (I.C.D.S. Ltd. Vs. Beena

Shabeer and Anr.)

5. ILR 2000 KAR 2855 (B. Harikrishna Vs. Macro

Links Private Limited and Another)

6. CRL. APPL. NO. 1349/2010 (H.C) (Shashikala T Vs.

Usha S Prabhakar)

7. CRL.APPL.NO.518/2006(S.C) (Krishna Janardhan

Bhat Vs. Dattatraya G Hegde)

8. (2000) 7 Kant.L.J.185 (Devi Tyres, Bangalore Vs.

Nawab Jan)
9. 2004(3) KCCR SN 200 Cr.P.C. (Ghaziahad
Development Authority Vs. Balbir Singh)
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10. 2002(3) KCCR 2008 (Smt. Bhavani Vs. D.C.

Doddarangaiah and Another

4. Per contra, it is the contention of learned counsel

appearing for the respondent-accused that the evidence of

P.W.2, during the course of cross examination, shows that

her daughter’s age was 18 years and when the alleged

transaction took place, her daughter was aged 17 years.

Hence, he submitted that, this itself improbablise the

contention of the appellant-complainant that he was having

Rs.3.00 lakh for the marriage of his daughter. The learned

counsel also submitted the financial capacity of the

appellant-complainant has been properly appreciated by the

trial court and there is material on record that the

complainant himself is a defaulter in making the regular

payment of installment to the bank wherein he borrowed the

loan. Hence, he submitted that the trial court has rightly

appreciated the evidence, both oral and documentary, and

rightly acquitted the respondent accused. There is no

illegality in the case. Hence, submitted to dismiss the appeal.

In support of his contention learned counsel appearing for

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the respondent-accused has relied upon the following

decisions filed along with the memo dated 14.1.2015:

1. Crl.Apl. No.2402/2014 (SC) (K Subramani Vs. K

Damodara Naidu)

2. 2014 AIR SCW 2158 (John K Abraham Vs. Simon C

Abraham and another)

3. 2014 (3) Crimes 291 SC (Sanghian Pandian

Rajkumar Vsl. Central Bureau of Investigation and
another with Balkrishan Rajendraprasad Chaubey
Vs. Central Bureau of Investigation and another.)

4. (2010) 11 SCC 441 (Rangappa Vs. Sri Mohan)

5. I have perused pleadings of the parties, oral

evidence of P.Ws.1 and 2 and D.W.1 and also the documents

produced in the case by both sides. I have also perused the

decisions relied upon by counsel on both sides which are

referred above.

6. Let me refer to the relevant portion in the oral

evidence of the witnesses. P.W.1 is the appellant-

complainant. In his affidavit, by way of examination of chief,

P.W.1 has reiterated the averments made in the complaint

filed under Section 200 of Cr.P.C. before the Magistrate

Court. In the evidence, he has stated that accused, who is

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his brother-in-law, had approached him for financial

assistance of Rs.3.00 lakh during the 2nd week of October

2008 to meet his urgent needs and as such, he paid the

same as hand loan. The accused assured him to repay the

same within six months and after the lapse of six months,

the accused did not turn up to pay back the amount. On the

persistent demand and request made by the complainant,

the accused issued a cheque bearing No.077696 dated

14.3.2009 for Rs.3.00 lakh drawn on Syndicate Bank,

Gandhinagar Branch, Bengaluru towards discharge of the

legally liable debt. The complainant presented the cheque

through his banker State Bank of Mysuru, Mysuru Road

Branch, Bengaluru. But the same was returned unpaid with

shara ‘funds insufficient’ on 16.4.2009. Then, he issued

legal notice through RPAD and UCP. The registered notice

sent to the residential address returned unserved with a

shara ‘intimation delivered returned to sender’ on 22.5.2009

and the notice sent by RPAD to the bank address, for which

the complainant had not received the acknowledgement.

Then, he made the complaint to the concerned post office on

22.6.2009 and the postal authority gave an endorsement

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that the said notice has been served on the accused on

16.5.2009. The notice sent under UCP has been

acknowledged by the accused between 15.5.2009 and

20.5.2009. Even after receipt of the notice, the accused

neither paid money nor replied. P.W.1 has produced the

cheque as per Ex.P.1 and identified the signature of accused

as Ex.P.1(a). He has also identified the bank endorsement

Ex.P.2, office copy of the legal notice Ex.P.3, postal receipts

at Exs.P.4 and 5, the returned cover and the notice in the

said cover at Ex.P.6 and envelope at Ex.P.6(a) and UCP

receipt Ex.P.7, the letter addressed to the postal authority at

Ex.P.8, reply by postal authority at Ex.P.9 and another letter

from the postal authority at Ex.P.10.

7. In the cross examination, P.W.1 has deposed that

the accused is his brother in law. P.W.1 married Shobha,

the sister of accused. He has deposed that he was running

Raghavendra Refreshment at Mysuru Road in the year 2008.

But for the last one year, he has closed it. To purchase the

said building, he borrowed loan of Rs.12.00 lakh from

Syndicate Bank, Shivajinagar Branch. Ex.D.1 is the account

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extract in respect of the said loan. He has not yet completely

discharged the said loan. He has admitted as true that as he

has not paid the loan installments regularly and number of

times, the bank imposed penalty on interest. When he was

asked as to whether he was having Rs.3.00 lakh in the year

2008 and whether he will produce the documents in that

regard, he answered that he has to see. However, he has

voluntarily deposed that the amount of Rs.3.00 lakh, which

was kept in his house for the purpose of his daughter’s

marriage, was given to accused. He has admitted as true

that he was not regularly paying the installment amount to

the Syndicate Bank. But he had offered explanation that as

he was receiving the rent amount lately, he was not regular

in payment of installment amount. The installment amount

was Rs.11,000/- per month. He denied the suggestion that

when he was running the Raghavendra Refreshment, he had

also borrowed loan from private persons apart from the bank

loan to discharge the same. He denied the suggestion that

he obtained the blank signed cheques from the accused in

order to repay the loan borrowed for himself. He admitted

that he has filed the complaint after the death of his mother-
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in-law. He denied the suggestion that after the death of his

mother-in-law, as there was difference of opinion arose

between the respondent-accused and his sister

(complainant’s wife), taking undue advantage of the cheque,

he filed the present case. He admitted as true that in the

said cheque, the contents were written in different ink. He

denied the suggestion that as the accused gave the signed

blank cheque, he himself has filled it and on the basis of the

same, he filed the present case. When he gave the amount

of Rs.3.00 lakh to the accused, he has not received any

document from him so also he cannot say on what date, he

gave the amount of Rs.3.00 lakh to the accused and on what

date, the accused gave the cheque to him.

8. The wife of the complainant is also examined in

this case as P.W.2. In her affidavit by way of examination in

chief, P.W.2 has reiterated the averments made in the

complaint. When she was cross examined, P.W.2 has

deposed that her husband filed complaint after the demise of

her mother. There is a building at Rajajinagar belonging to

her mother. But she has denied the suggestion that she has
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filed litigation claiming share in the said property. Her

daughter’s age is 18 years. She is studying in II PU. She

has further deposed that she is not having the document to

show that she was having Rs.3.00 lakh in the house. She

has also deposed that she does not know on what date the

accused gave the cheque to her husband. They have not yet

discharged the loan at Syndicate Bank. They have not

obtained the documents on the day when they gave money to

the accused. She has denied the suggestion that herself and

her husband were not having financial capacity to advance

Rs.3.00 lakh. She denied the further suggestion that for

running the hotel business, herself and her husband have

borrowed loan from some private companies. She has also

denied the suggestion that as the accused is her brother and

to obtain loan from private persons, they obtained signed

blank cheques as security. She denied further suggestion

that they have not advanced Rs.3.00 lakh to the accused

and in turn, the accused has not issued cheques in their

favour.
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9. The accused was also examined before the Court as

D.W.1. In the affidavit, by way of examination in chief,

D.W.1 has contended that he has not borrowed any amount

form the complainant and he has not issued the disputed

cheques to discharge any legally enforceable liability. In the

year 2008, the complainant started hotel Raghavendra

Refreshment and at that time, the complainant was in need

of finance from banks as well as private financiers. The

complainant has taken finance of Rs.12.00 lakh from

Syndicate Bank, Bengaluru and also raised financial

assistance of Rs.3.00 lakh from the private financiers. At

the time of raising loan from the private financiers, the

complainant told him that the said financiers were

demanding a signed blank cheque of a government servant

as security. The complainant requested him to give two

signed blank cheques in order to give the same to the private

financiers from whom he has taken the loan. As the

complainant was his brother in law, in order to help him, he

gave two signed blank cheques bearing Nos.077696 and

077697 drawn on Syndicate Bank, Gandhi Nagar, Bengaluru

and bonds. The complainant assured that the cheques

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would be returned back after he clears the loan amount

taken by him. D.W.1 has also contended that his mother

expired in the year 2008 and there was difference between

himself and his sister i.e., wife of the complainant regarding

share of the property of his mother. For this reason, the

complainant filled up the cheques and presented the same

without his knowledge. The contents of the disputes

cheques were not written by him. In the cross examination,

D.W.1 has deposed that about four years back, the

complainant purchased the property at Mysuru Road and

from 19.9.1996, the complainant is running the hotel in the

said building. He has further deposed that as he is working

in a bank, he knew not to give the signed blank cheques. At

the time of giving those two cheques, he had not enquired

the complainant as to from whom the complainant was

borrowing loan. Ex.D.1 is obtained from the bank. He

admitted as true that the complainant has let out the first

floor of the building for residential purpose and even he has

let out three shops on rental basis. He denied that from the

said let outs, the complainant is getting Rs.35,000/- -

Rs.40,000/- per month. He denied the suggestion that in

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order to cheat the complainant, he has taken the false

contention. He has also denied that he issued the cheques

for discharge of the debt amount to the complainant. He has

further stated that there are eight children to his mother and

they have not filed civil suit claiming share in the property of

his mother. In connection with the family property, there is

difference between himself and his sister. He denied the

suggestion that in order to discharge the loan amount, he

had obtained Rs.3.00 lakh loan amount from the

complainant. He received the legal notice, but he has not

replied the same. The signatures on the disputed cheques

are his signatures.

10. Perused the oral evidence of the parties and also

the materials in the case. D.W.1-accused, in his evidence,

has admitted that signatures, on the cheques, he issued, are

his signatures and that, he has handed over those cheques

to the complainant. But, according to D.W.1, since the

complainant obtained loan of Rs.3.00 lakh from the private

financiers, on the request of the complainant, he gave those

two cheques to complainant as security for the loan. In view

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of these facts and circumstances of the case, initial

presumption under Sections 118(a) and 139 of the

Negotiable instruments Act would arise in favour of the

complainant that the said instruments were issued by the

accused for consideration to discharge legally enforceable

debts. This presumption is rebuttable presumption. So,

D.W.1-accused by placing the cogent and acceptable

materials can rebut the said presumption. In this

connection, it is not only sufficient for the accused to offer

some explanation by way of defence, but he has to prove it.

The standard of proof is preponderance of probabilities and

absolute proof beyond all reasonable doubt is not required.

It is the contention of the accused that the complainant had

borrowed loan of Rs.12.00 lakh from the bank to purchase

the Raghavenfra Refreshment building and he was paying

installments on the said loan and monthly installment was

Rs.11,000/-. It has also come on record, during the course

of cross examination of P.W.1-complainant that as the

complainant was not regular in making the payment of

installments as per the time schedule, the bank imposed

penalty interest on him. It has further come on record that

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in the year 2008, the complainant paid the installment

amount only to the extent of 8,948/- p.m. This material

prima facie goes to show about the financial capacity of the

complainant. When that is so, the complainant has to show

that he was having amount of Rs.3.00 lakh in the year 2008

so as to give the same to the accused by way of loan. When

a person is not able to pay the bank installments regularly,

in spite of imposing penalty interest, naturally, it goes to

show that he was not having sufficient amount with him.

The complainant, in his evidence, has voluntarily stated that

he was having Rs.3.00 lakh in his house to perform the

marriage of his daughter and the said amount was given to

the accused. But when P.W.2-wife of the complainant was

tested in the cross examination, which was recorded in the

year 2009, she has deposed that her daughter was studying

in PUC and she was aged 18 years. So it goes to show that

when the alleged transaction of advancing loan and receiving

the cheques took place, the daughter of the complainant was

aged 17 years. This material also probabilise the defence of

the accused.
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11. Regarding the contention that the amount of

Rs.3.00 lakh was kept in the house of the complainant, for

the first time, that too voluntarily, P.W.1 in his evidence has

deposed that he kept the said amount in his house. But, he

had not mentioned the said fact specifically either in the

legal notice or in the complaint filed before the magistrate

court. The relationship of the complainant and the accused

is admitted. It is also an admitted fact that the own sister of

the accused was given in marriage to the complainant. So

naturally, there would be trust and confidence between the

parties. It is true that the accused admitted his signatures

on the two cheques but he has disputed borrowing of

Rs.3.00 lakh and issue of the cheques in discharge of the

said amount. During the course of evidence, it has come on

record that the other writings in the cheques are in different

ink. Considering all these materials on record, the trial

court has rightly come to the conclusion that the

complainant was not at all having financial capacity to

advance Rs.3.00 lakh to the accused and ultimately,

acquitted by the accused by dismissing the complaint.

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12. In view of these facts and circumstances and also the

evidence produced by both sides during the course of trial

and also by way of pleadings, the decisions relied upon by

learned counsel for the appellant-complainant will not come

to the aid and assistance of this case. The materials would

show that the accused has rebutted the presumption by way

of preponderance of probabilities. Therefore, the contention

of the appellant-complainant that he had advanced Rs.3.00

lakh to the respondent-accused and in discharge of the said

loan, the accused had issued two cheques cannot be

accepted. I do not find any illegality in the judgment and

order of the trial court and there are no valid and justifiable

grounds to interfere with the same. No merits in the appeal

and it is accordingly dismissed. The judgment and order

judgment and order dated 30.6.2010 passed by the XV Addl.

CMM Court, Bengaluru City in C.C. No.16364/2009 is

hereby confirmed.

Sd/-
JUDGE

Cs/-