Bangalore District Court
M/S Akshatha Minerals Pvt Ltd vs M/S Gnanee Business Corporation on 2 August, 2025
1
Crl.A.No. 457/2021
KABC010021192023
IN THE COURT OF THE LII ADDL. CITY CIVIL & SESSIONS
JUDGE, BANGALORE (CCH-53)
Dated this the 02nd day of August, 2025
PRESENT
Sri.Gangappa Irappa Patil., B.A., LL.B(Spl).,
LII Addl. City Civil & Sessions Judge,
Bangalore.
Crl.A.No.457/2021
Appellant/ 1. M/s Akshatha Minerals
Accused: Pvt.Ltd., Akshatha, Arvinda Nagar,
Near Nethaji School,
Ballary Road, Hospet 583203.
Old address: No.507/A, 24th
Ward, Ballary Road,
Hospet 583203.
rep by S.G. Manjunath Bhat.
2. Sri.S.G.Manjunath Bhat,
S/o Sugur Gurunath, Major,
M.D. and Authorised Signatory of
M/s Akshatha Minerals Pvt.Ltd.,
"Akshatha",Arvinda Nagar,
Near Nethaji School, Mary Road,
Hospet 583203.
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Crl.A.No.457/2021
(By M/s Kamal and Co.)
-V/S-
Respondent/ M/S Gnanee Business Corporation,
Complainant a partnership firm having its office at
No.296, Neelasadhana, 1st Cross,
Ravindranagar, Shimoga,
and also having its Branch office at
No.26, Ground floor, Mahadi Mane,
12th main, Rajajinagar 1st block,
behind Nalapaka, Bengaluru.
Rep. By its partner
Sri.G.Shubha Kumar,
S/o M.S.Gnaneshwara,
Aged about 39 years.
2. Sri A.N.Srinivas
major,
RIA Rachan
opposite Arvind Nagar park,
Bellary road,
Hospet 563 203.
(By Sri GSB, Advocate)
JUDGMENT
This appeal is filed by the Appellant praying to set-aside the judgment of conviction dated 23.04.2021 passed by the XVI Addl. Judge and ACMM, SCCH 14, Bengaluru in CC No. 17996 of 2013 convicting the appellant to pay fine of Rs. 9,44,84,276/- and in default to undergo SI for 6 months.
3Crl.A.No.457/2021
2. The appellant of this appeal was the accused before the Trial Court. The respondent of this appeal was the complainant before the Trial court. The rank of the parties to this appeal will be hereinafter referred to with the same rank as assigned to them before the trial court for the sake of convenience.
3. The brief facts which leads to file this appeal in nutshell are as follows:
The 1st accused is a private ltd., company having its office in the above stated address and in the active business of Iron Ore and its related activities. 2 nd accused is the M.D. and signatory authority of the 1st accused and 3rd accused is the Director of the 1 st accused. The 2nd and 3rd accused are responsible for the day to day affairs of the 1 st accused and both accused are dealing in all business aspects of 1 st accused. Further the complainant submitted that in the month of June 2010, the 2 nd and 3rd accused came and approached the complainant for want of funds to the tune of Rs.10,00,00,000/, stating that they were desirous of acquiring all the rights, which Rajashree Minerals, Hospet is having and an agreement dated nil (on stamp paper dated 29.01.2007) entered by it with Srinidi Minerals Hospet through its sister concern Deviki Minerals. Further submitted that, the complainant has agreed to pay ten crores to the accused and further its agreed that in the initial stage in 4 Crl.A.No.457/2021 between June 2010 to January 2011 the complainant has to pay seven crores and as per the oral agreement the accused received Rs.7,00,00,000/. Accordingly in between June 2010 to January 2011 the accused received the seven crores in the following manner:
1. On 15.06.2010, one crore through RTGS from Axis Bank from A/c No.910020014756335.
2. On 10.07.2010, sixty lakhs through RTGS from Axis Bank from A/c No.910020014756335
3. On 12.07.2010, 1.40 crore through RTGS from Axis Bank from A/c No.910020014756335.
4. On 24.08.2010, 90 lakhs through RTGS from Axis Bank from A/c No.910020014756335.
5. On 26.08.2010, sixty lakhs through RTGS from Axis Bank from A/c No.910020014756335
6. On 28.08.2010, ninty lakhs through RTGS from Axis Bank from A/c No.910020014756335
7. On 29.12.2010, 1.5 crore through RTGS from Axis Bank from A/c No.910020014756335
8. On 03.01.2011, ten lakhs through RTGS from Axis Bank from A/c No.910020014756335.
4. The complainant submits that the MOU was entered between the parties, but within 45 days as mentioned in the M.O.U. the accused has not completed any formalities as agreed in the Memorandum of Understanding and further demanded three crores as mentioned in the agreement and 5 Crl.A.No.457/2021 the complainant again paid two crores through Omega Nature Resources Pvt.Ltd., and one crore from his account. Further submitted that, the accused have received totally ten crores, but after receiving the ten crores also the accused failed to fulfill the obligations mentioned in the Memorandum of Understanding dated 04.01.2011, and the complainant requested to return entire money for the non performance as per Memorandum of Understanding. After lots of request, and at the intervention of elders and well wishers the accused agreed to return the amount which is of Rs.9,44,84,276/ out of ten crores and further agreed that the remaining balance amount along with the interest to the entire amount will be settled later. Further submitted that, the accused has issued four cheques for Rs.9,44,84,276/ through the following manner to discharge of liability;
1. Cheque bearing No.447778 for Rs.2,50,00,000/ dated 15.12.2012
2. Cheque bearing No.447780 for Rs.2,44,84,276/ dated 15.12.2012
3. Cheque bearing No.447779 for Rs.2,50,00,000/ dated 15.12.2012
4. Cheque bearing No.447777 for Rs.2,00,00,000/ dated 15.12.2012 and all the above cheques have been drawn on state Bank of India, College Road, Hospet, and further accused promised 6 Crl.A.No.457/2021 that the above said cheques would be honoured on presentation and accused requested the complainant to present the above mentioned cheques in the second week of March. Further submitted that, as per his assurance and promise the complainant presented the above mentioned cheques through his banker, Indian Bank, Rajajinagar Branch, Bengaluru on 13.03.2013, 13.03.2013, 14.03.2013 and 14.03.2013 respectively. But for his utter shock and dismay he has received an endorsements stating that "Funds insufficient" in the account maintained by him and the same is received by the complainant on 18.03.2013 for all the above four cheques. The complainant immediately got issued a legal notice dated 12.04.2013 by registered post acknowledgement due, informing the accused about the bouncing of the cheque and calling upon the accused to pay the sum of Rs.9,44,84,276/- covered by the above said dishonoured cheque, within 15 days from the date of receipt of the notice. The accused received the notice on 15..04.2013, but failed to pay the amount covered under the cheques as per the demand made in the notice and neglected to reply. Thereby the accused has committed the alleged offence.
5. After perusal of the material available on record and on prima−facia material grounds, the trial Court took cognizance and thereafter sworn statement has been recorded and summons was issued to Accused. After service of summons, the Accused appeared through his counsel and got 7 Crl.A.No.457/2021 himself enlarged on bail and substance of accusation was recorded as to the alleged offence under Section138 of Negotiable Instrument Act. The Accused pleaded not guilty and claimed to be tried.
6. In order to prove their case, the complainant's partner has been examined as PW.1 and got marked documents as Ex.P.1 to Ex.P.23 and examined one witness as PW.2. On the other hand, the accused No.3 himself is examined as DW.1 and got marked documents as Ex.D.1 to D.7.
7. After completion of evidence of complainant's side, the statement of the Accused under Section 313 of Cr.P.C. was recorded, wherein the Accused denied all the incriminating evidence appearing against him. Therefore, case was posted for arguments.
8. The trial court, after hearing the arguments and after perusing the oral and documentary evidence available on record, passed the impugned judgment by convicting the accused for the offence punishable u/Sec.138 of N.I. Act. The accused being aggrieved by the said judgment of the trial court has preferred this appeal.
9. Grounds of appeal in nutshell as urged in the appeal memorandum are as follows:-
8Crl.A.No.457/2021
a) The judgment passed by the trial court is illegal, erroneous and it is not sustainable in the eye of law.
b) The Trial Court erred in appreciating the fact that the complainant failed to prove his case.
c) The appellant submits that the Trial Court ought to have appreciated the fact that the case of the complainant revolved around a MOU dated 04.01.2011 entered between the complainant and the accused where under the complainant made payment of Rs. 7 crore.
However the complainant failed to produce the said MOU which demolishes the very case of the complainant.
d) The appellant submits that Trial Court failed to appreciate Ex.D.1, D.2 and Ex.P.23 which clearly states that the amount of Rs. 7 crores were paid by the complainant towards purchase of iron ore.
e) The learned Magistrate ought to have appreciate the fact that there is no valid service of legal notice as the address at which the notice was issued `old address`, as per the complainant himself. The Trial Court has failed to consider all these facts and straightly convicted the appellant.
9Crl.A.No.457/2021
10. On these and other grounds as urged in the appeal memorandum, the appellant has prayed to allow the appeal and prayed to acquit him for the offence punishable u/s.138 of NI.Act.
11. After filing of the appeal, it is registered as Crl.A.No. 457/2021 and notice was issued to the respondent. After service of the notice, the respondent has appeared before the court through his counsel. Thereafter, the trial court record was called for. After securing the trial court record, the matter was posted for arguments.
12. Heard the arguments of learned counsel for the appellant and respondent. The learned counsel for the appellant filed the written argument. Perused the appeal memorandum, written argument, the trial court record and other materials on record.
13. The points that arise for consideration before this court are as under:
(1) Whether the judgment passed by the trial court is just and proper and in accordance with law?
(2) Whether the interference of this court is required in the impugned judgment of the trial court?
(3) What order?
14 .The findings on the above points are as under:
10Crl.A.No.457/2021 (1) Point No.1 ..
In the Negative (2) Point No.2 ..
In the Affirmative.
(3) Point No.3 ..
As per final order
for the following:
REASONS
15. Point No.1 and 2 :- These two points are interrelated to each other and as such, they are taken together for discussion to avoid repetition of facts.
16. The complainant had filed private complaint before the trial court u/Sec.200 of Cr.P.C. by alleging the commission of offence u/Sec.138 of N.I. Act by the accused.
To prove their case, the complainant's partner has been examined as PW.1 and got marked documents as Ex.P1 to Ex.P.23 and examined one witness as PW.2. On the other hand, the accused No.3 himself examined as DW.1 and got marked documents as Ex.D.1 to 7.
17. The learned counsel for the respondent argued and submitted that the judgment of the trial court is just and proper based on the principles of presumption and no interference is required by this court in the said judgment.
18. On the other hand the learned counsel for the appellant has filed the written argument and contended that the complainant/respondent is relying upon the MOU dated 04.01.2011 referred in the complaint , that has not been 11 Crl.A.No.457/2021 produced before the trial court. The said MOU is the foundation of the case. In view of non furnishing of the MOU dated 04.01.2011 an adverse inference has to be drawn against the respondent as mandated u/sec. 114 of Indian Evidence Act. Further he contended that the complainant/respondent was not prevented from adducing the secondary evidence with respect to that MOU dated 04.01.2011 and no attempt has been made by the respondent in this regard which raises doubt about the bonafide of the respondent. Therefore, the entire case of the respondent that it has intended to acquire the rights of Rajashree Minerals and for that purpose, it has paid a sum of Rs. 7 crore to the appellant and subsequently both the respondent and the appellant had entered into an MOU dated 04.01.2011, is completely disproved. Thereby prays to allow the appeal by setting aside the impugned judgment of the trial court.
19. On perusal of the contentions raised by the appellant and on perusal of the depositions and records placed before this court, it primafacie shows that he has taken the probable defense before the trial court with respect to the alleged MOU dated 04.01.2011, which is a material document to show the legally recoverable debt.
20. It is pertinent to note here that, as stated above one of the main contention taken by the appellant is that the 12 Crl.A.No.457/2021 respondent/complainant is relying the Memorandum of Understanding dated 04.01.2011. But the complainant has not produced the said Memorandum of Understanding dated 04.01.2011 in support of his case. The main defense of the appellant is that the Memorandum of Understanding dated 04.01.2011 is the main crux of the case and the case of the complainant revolved around the Memorandum of Understanding dated 04.01.2011. But surprisingly the complainant has not produced said Memorandum of Understanding dated 04.01.2011.
21.The Trial Court ought to have appreciate the fact that the Memorandum of Understanding dated 04.01.2011 is the material document to adjudicate the case. To arrive proper conclusion the Memorandum of Understanding dated 04.01.2011 is the important document. But the complainant has not produced the same.
22. In support of his contention the learned counsel for the appellant has relied on the following citations;
1. Basalingappa vs. Mudibasappa and APX Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers and others.
2. Narayan Menon, Rangappa Vs. Mohan,
3. 2001 SCC Online Mad 922, Angu Parameswari Textiles (P) Ltd and others vs. Sri Rajam and Co.
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4. Joseph Sartho vs. Gopinathan 2008(4) KHC 463 and same citation is referred in Shiju K. Vs. Nalini and another 2015 SCC Online Ker 36498.
This court has gone through these citations. The citations which are produced by the appellant are aptly applicable to the case on hand before this court.
23. In case of Basalingappa vs. Mudibasappa it is held that;
Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of "preponderance of probabilities". Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own."
14Crl.A.No.457/2021 The principle discussed in the above stated case is aptly applicable to the case on hand. The accused succeeded in rebutting the presumption available to the respondent u/sec. 139 of N.I. Act. Once the presumption is rebutted by the accused, the complainant has to prove his case beyond all reasonable doubt. But the complainant failed to prove his case. As stated above the non production of the MOU dated 04.01.2011 is fatal to the case of the complainant. In view of the principle discussed in the above stated case and in view of the aforesaid reasons, this court feels that the impugned judgment is required to be interfered. The Trial Court without considering these aspects has erroneously convicted the appellant and passed the impugned judgment. The same is liable to be interfered by this court by setting aside the impugned judgment. Accordingly , this court answers Point No.1 in the Negative and Point No.2 in the Affirmative.
24. Point No.3:- In view of the findings on point No.1 and 2, this court proceeds to pass the following:
ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby allowed.
The impugned judgment and order of conviction dated 23.04.2021 passed by the 15 Crl.A.No.457/2021 XVI Addl. Judge and ACMM, SCCH 14, Bengaluru in CC No. 17996 of 2013 convicting the appellant to pay Rs. 9,44,84,276/- is hereby set aside.
The Appellant/accused is hereby acquitted of the offence punishable u/sec. 138 of N.I Act.
The appellant is at liberty to get release the amount if any deposited before the Trial Court.
Bail bond if any executed by the appellant before the Trial Court stands cancelled.
Send back the Trial court records along with copy of this judgment.
(Dictated to the Sr. Shr/SG I on Computer, script thereof is corrected, ssigned and then pronounced by me in the open court on this the 02nd day of August, 2025.) GANGAPPA I Digitally signed by GANGAPPA I PATIL PATIL Date: 2025.08.07 17:29:28 +0530 (GANGAPPA IRAPPA PATIL ) LII Addl. City Civil & Sessions Judge, Bengaluru.16
Crl.A.No.457/2021 Judgment pronounced in the open court (vide separate Judgment ) ORDER The Appeal filed by the appellant u/s.374(3) of Cr.P.C., is hereby allowed.
The impugned judgment and order of conviction dated 23.04.2021 passed by the XVI Addl. Judge and ACMM, SCCH 14, Bengaluru in CC No. 17996 of 2013 convicting the appellant to pay Rs. 9,44,84,276/- is hereby set aside.
The Appellant/accused is hereby acquitted of the offence punishable u/sec. 138 of N.I Act.
The appellant is at liberty to get release the amount if any deposited before the Trial Court.
Bail bond if any executed by the appellant before the Trial Court stands cancelled.
Send back the Trial court records along with copy of this judgment.
GANGAPPA Digitally signed by
GANGAPPA I PATIL
I PATIL Date: 2025.08.07 17:29:41
+0530
LII Addl. City Civil & Sessions Judge, Bengaluru