Bangalore District Court
P. Manjunath Reddy vs Sadashiva Reddy B N on 2 May, 2025
KABC010207762022
IN THE COURT OF THE LXIII ADDL.CITY CIVIL
& SESSIONS JUDGE (CCH-64) AT BENGALURU
Dated this the 2nd day of May, 2025
: PRESENT :
Sri. I. P. Naik
LXIII ADDL.CITY CIVIL & SESSIONS
JUDGE, BENGALURU CITY.
Crl.A.No.887/2022
APPELLANT: Manjunath Reddy,
S/o.Narayan Reddy,
Aged about 43 years,
R/at.No.537, 'B' Main Road,
Next to Rushan Fancy Store,
Near Dodda Banaswadi Bus Stand,
Bengaluru-560 043.
(By A.M. Adv)
-V/s-
RESPONDENT : Sadashiva Reddy.B.N
Crl.A.No.887/2022 C/W
2
Crl.Rev.P.No.507/2022
S/o.Narayan Reddy,
Aged about 64 years,
R/at.No.1,
Narayan Reddy Layout,
Behind New Baldwin School,
Bengaluru-560 043.
(By Sri.SKS- Adv)
*******
JUDGMENT
The appellant has preferred this appeal against the Judgment and order passed by the learned 8 th ASCJ and ACMM, Bengaluru in C.C.No.27538/2012 dated 29.06.2022. Hereinafter, their rank is referred as per the their rank before the Trial Court.
Crl.A.No.887/2022 C/W 3 Crl.Rev.P.No.507/2022 KABC010272772022 IN THE COURT OF THE LXIII ADDL.CITY CIVIL & SESSIONS JUDGE (CCH-64) AT BENGALURU Dated this the 2nd day of May, 2025 : PRESENT :
Sri. I. P. Naik LXIII ADDL.CITY CIVIL & SESSIONS JUDGE, BENGALURU CITY.
Crl.Rev.P.No.507/2022
PETITIONER: Sadashiva Reddy.B.N
S/o.Narayan Reddy,
Aged about 64 years,
R/at.No.1,
Narayan Reddy Layout,
Behind New Baldwin School,
Bengaluru-560 043.
(By Sri.SKS- Adv)
-V/s-
Crl.A.No.887/2022 C/W
4
Crl.Rev.P.No.507/2022
RESPONDENT :
Manjunath Reddy,
S/o.Narayan Reddy,
Aged about 43 years,
R/at.No.537, 'B' Main Road,
Next to Rushan Fancy Store,
Near Dodda Banaswadi Bus Stand,
Bengaluru-560 043.
(By A.M. Adv)
*******
JUDGMENT
The petitioner has filed this petition against the Judg-
ment and order passed by the learned 8th ASCJ and ACMM, Bengaluru in C.C.No.27538/2012 dated 29.06.2022. Hereinafter, their rank is referred as per the their rank before the Trial Court.
2. The factual matrix of case:-
Crl.A.No.887/2022 C/W 5 Crl.Rev.P.No.507/2022 The complainant and accused are well known to each other since long time. In the last week of July 2011 accused approached the complainant for financial assistance for his business to the tune of Rs.90,00,000/-. Accused received said total amount of Rs.90,00,000/- on various dates. Accused issued 12 cheques towards outstanding due amount and agreed to repay the said amount within 6 months. Out of that, cheque bg.No.320859 issued on 11.05.2012 for repay- ment of Rs 4,00,000/-, cheque bg.No.175607 issued on 12.05.2012 for repayment of Rs 10,00,000/- & cheque bg No 175606 issued onfor repayment Rs 5,00,000/-.
The complainant presented the said cheque through his banker for encashment. The said cheques for encash- ment through his banker, but these cheques were Crl.A.No.887/2022 C/W 6 Crl.Rev.P.No.507/2022 dishonoured as "Account Closed" and "funds insuffi- cient". Thereafter complainant got issued legal notice through counsel on 07.06.2012 through RPAD and speed post. Inspite of service of notice accused failed to repay the amount covered under the 3 cheques within stipulated time. After complying strict conditions of section 138 of N.I Act, the complainant presented pri- vate complaint before the Trial Court.
3. On registration of the PCR, the learned learned Trial Court took cognizance for alleged O/P/U/Sec 138 of N.I. Act. Thereafter, sworn statement of complainant is recorded. On considering materials available on record, learned Trial Court opined that, there is prima- facie case and sufficient materials to proceed against accused person. Accordingly, criminal case has been Crl.A.No.887/2022 C/W 7 Crl.Rev.P.No.507/2022 registered against accused person in Register-III and issued Summons against him.
4. In pursuant to the Summons, accused has appeared through his counsel before the Trial Court and got enlarged on regular bail. Thereafter, plea has been recorded and read over to them. Accused have pleaded not guilt and claims to be tried. Hence, case is posted for evidence.
5. The complainant has got examined two witnesses as PW.1 and PW.2 (including himself) and in support of oral evidence produced 32 documents which are marked at Ex.P.1 to Ex.P.32. Thereafter statement of the accused is recorded U/s.313 of Cr.P.C. accused Crl.A.No.887/2022 C/W 8 Crl.Rev.P.No.507/2022 has denied the incriminating evidence. Accused has not chosen to lead defence evidence and also got examined 3 witnesses as DW.1 to DW.3 (including himself) and 21 documents is got marked on his behalf as Ex.D.1 to Ex.D.21.
6. After considering the oral and documentary evidence and hearing of the parties, the learned Trial Court has convicted the accused and sentenced him to pay compensation. The accused dis-agreed and dis-satisfied with the said Judgment, preferred the appeal on the following grounds that, the impugned Judgment and order is illegal, unjust and arbitrary. There is no documents to show that the complainant lend an amount of Rs.90,00,000/- to the accused. The Crl.A.No.887/2022 C/W 9 Crl.Rev.P.No.507/2022 complainant failed to prove on each date how much amount was lend to the accused. This fact is not proved by the complainant. The Trial Court not considered the oral and documentary evidence and defence of the ac- cused. During cross-examination PW.1 stated that he has paid Rs.90,00,000/- to the accused from the com- pensation amount availed from the acquisition of the house for Metro. Further he stated that he has pur- chased agricultural land after getting compensation from the Metro. By considering the compensation amount obtained by the complainant, purchase of the lands of 57 acres of land, he is totally unable to pay the amount as claimed by him.
Crl.A.No.887/2022 C/W 10 Crl.Rev.P.No.507/2022
7. The accused specifically stated that he is not fi- nancially sound enough to pay the said huge amount to the complainant. Perused the material facts submitted before the Trial Court. Further, he has taken con- tention that he has taken advantage of the cheques is- sued for security purpose to Gokulam Chits on behalf of the complainant.
8. The accused has strongly, taken contention that the complainant and his daughter bid the chits in Gokulam Chits. At that time, they have taken documents and cheques from the accused for collateral purpose to their chits. In this regard, the accused lodged complaint be- fore the learned 4th ACMM, Bengaluru. The learned ju- risdictional Magistrate referred the case for investiga- tion. Accordingly, Banasawadi police have registered Crl.A.No.887/2022 C/W 11 Crl.Rev.P.No.507/2022 the case and conducted investigation against the complainant and accused. Further, they have filed charge sheet against them. The case is pending for adjudication. This fact is unequivocally admitted by the complainant in his evidence. Themselves have availed loan of ₹.50,00,000/-. Accused had stood as surety for the said amount. This fact is also admitted by the PW.1 in his cross-examination. This facts are not considered by the Trial Court. The complainant is not at all discharges his initial burden. The Trial Court has committed grave error in convicting accused person. Therefore, accused successfully rebutted the presumption available in favour of the complainant. By adducing cogent evidence and conducting cross-examination of all witness on behalf of the Crl.A.No.887/2022 C/W 12 Crl.Rev.P.No.507/2022 complainant. Hence, prays to allow the appeal and set aside the impugned Judgment and Order acquitted the accused.
9. The complainant is also disagree and dis-satisfied with the impugned Judgment and order passed by the Trial Court with respect imposing quantum of sentence and questioned the correctness and legality of the same in this Revision Petition on the ground that the learned trial Court has not properly appreciated the facts, mate- rials both oral and documentary evidence. The Trial Court not considered the ingredients of the offence pun- ishable U/s. 138 of the N.I Act. The learned Trial Court utterly failed to consider accused rebutted the manda- tory presumption arise in favour of the petitioner. The learned Trial Court punished the accused and sen-
Crl.A.No.887/2022 C/W 13 Crl.Rev.P.No.507/2022 tenced. The quantum of sentence is lesser one. The Trial Court not considered the principles laid down by Hon'ble Apex Court in Moinuddin Abdul Sattar Vs. Vi- jay D. Selvi's case {(2015) 9 SCC 622}. Sentence im- posed on the accused is inadequate and against law and probabilities. Hence, prays for allow the petition and convict the accused for alleged offence and impose fine of ₹.32,00,000/- in addition to imprisonment for a period of two years and also to pay compensation.
10. After registration of these petitions, issued notice to rival party. In pursuant of notice, rival party in these petitions appeared through their counsel.
11. Heard, both side.
Crl.A.No.887/2022 C/W 14 Crl.Rev.P.No.507/2022
12. The learned counsel or the accused submitted that in this case, accused successfully proved the defence by adducing oral and documentary evidence. The Trial Court has not considered the proved facts and defence of the accused. It is specific case of the accused that he had stood as surety for the chit amount received by the complainant and his daughter. This fact is unequivocally admitted by the complainant and his witnesses. Further accused has issued 12 cheques for collateral/security purpose. This aspect is not at all considered by the Trial Court. The complainant has misused the same. In this regard, the accused lodged private complaint before the jurisdictional magistrate. Based on the private complaint, the learned 4 th ACMM, Bengaluru has referred this face for investigation.
Crl.A.No.887/2022 C/W 15 Crl.Rev.P.No.507/2022 Accordingly, Banaswadi Police registered the case in Cr.No.499/2012 and conducted the investigation and found that the complainant and his daughter misused the cheques. Accordingly, they have filed charge sheet against them for the offence punishable U/s.420, 406, 120-B R/W. Sec. 34 of IPC. This fact is also admitted by the complainant in his evidence. This fact is not at all considered by the Trial Court.
13. The learned Trial Court has committed error on considering the financial capacity of the complainant. The complainant himself admitted that after receiving compensation amount from Bengaluru Metro Rail Cor- poration Limited (in short BMRCL) he had purchased 57 acres of land in and around Karnataka and Andhra Crl.A.No.887/2022 C/W 16 Crl.Rev.P.No.507/2022 State borders. The complainant has uppressed the true material fact before the Court and he has not discloses regarding how much amount was spent for purchase of 57 acres of land. This fact is totally silent. This aspect is unequivocally admitted by the complainant in his cross-examination. That fact is also not considered by the Trial Court. Further, the accused successfully proved that the complainant is not having financial ca- pacity to lend ₹.90,00,000/- to the accused This bur - den is not at all discharged by the complainant, By considering the entire evidence and defence taken by the accused he has successfully rebutted the presump- tion available infavour of the complainant.
14. The complainant has also filed Revision Petitioner before this Court for enhancement of the sentence on Crl.A.No.887/2022 C/W 17 Crl.Rev.P.No.507/2022 the ground as it is inadequate. In this case, the ac- cused has successfully rebutted the presumption. In such circumstances, the complaint is liable to be dis- missed as result of appeal, the revision petition filed by the appellant is liable to be rejected. Therefore, prays to allow the appeal as prayed for and reject the revision petition filed by the respondent.
15. As against this, the learned counsel for the com- plainant urged that, in this case, there is no dispute re- garding issuance of cheques in question and signature of the accused found on the said cheques. The accused is doing construction business and for his necessity availed loan on different dates. In order to repayment of the loan availed from the complainant accused issued Crl.A.No.887/2022 C/W 18 Crl.Rev.P.No.507/2022 12 cheques for repayment. Now in order to avoid and to escape from the liability, he launched criminal offence against complainant and his daughter. The com- plainant has not produced any material before the Court. The complainant placed all materials before the Trial Court. The Trial Court rightly convicted the ac- cused. There is no 2 nd view in this appeal. In this case, there is no dispute regarding service of notice. Further, there is no disputed regarding relationship of the complainant and accused. Therefore, the Trial Court has assigned proper reasons and has come to proper conclusion. Hence, prays to dismiss the appeal.
16. Further, the learned counsel for the complainant urged that the learned Trial Court has not considered the facts of the case while imposing sentence and fine.
Crl.A.No.887/2022 C/W 19 Crl.Rev.P.No.507/2022 The sentence imposed on accused is inadequate. The Trial Court ought to have followed the guidelines laid down by the Hon'ble Apex Court in Moinuddin Abdul Sattar's case. Hence, prays for allow the Revision Peti- tion and modify the sentence imposed by Trial Court.
17. On considering the grounds urged in the memo the following points arise for my consideration:
1. Whether the Trial court committed error in considering the defence of the accused while passing Impugned Judgment and Order.?
2. Whether Trial Court has imposed inadequate sentence and imposed fine of lesser side?
Crl.A.No.887/2022 C/W 20 Crl.Rev.P.No.507/2022
3. What order?
18. On considering the appeal memo presented in the Appeal memo, Revision Petition, complaint, oral and documentary evidence of both parties and on hearing of both the parties my answer to the above points are as under:
Point No.1: in the Negative, Point No.2: in the Negative, Point No.3: As per final order ...............for the following;
REASONS POINT No.1:
19. In order to prove the allegations made against the accused, the complainant himself stepped into the witness box and filed affidavit in lieu of examination in Crl.A.No.887/2022 C/W 21 Crl.Rev.P.No.507/2022 chief. In support of his contention he has produced documents i.e., cheques, bank endorsement, notice copy, sale deed, mutation extract, bank pass book and other documents related to acquisition of his property by the BMRCL. During cross-examination he stated that Banaswadi Police have registered case against himself and his daughter in Cr.No.499/2012. Further, he admitted that the criminal case bg. C.C.No.15661/2014 is pending for disposal against them before the 4th ACMM, Bengaluru. Further he stated that himself and his daughter have bid chit chit amount from the Gokulam Chits. Further, admitted that accused stood collateral surety for the bid amount by him. Further he admitted that the accused deposited his title deed on behalf of him in Gokulam Chits. The Crl.A.No.887/2022 C/W 22 Crl.Rev.P.No.507/2022 learned counsel for the accused stated he repaid the amount to Gokulam Chits. He stated that no document regarding payment loan by accused.
20. In the cross-examination PW.1 further stated that he has paid ₹.90,00,000/- to accused in July 2011. he has got compensation of ₹.1,70,00,000/- due to his house was acquired by the BMRCL. Further he admitted that he had purchased agricultural lands after getting compensation from the BMRCL. In this regard, he has produced the sale deed. The entire compensation amount deposited at Vijaya Bank account Dodda Banaswadi Branch.
Crl.A.No.887/2022 C/W 23 Crl.Rev.P.No.507/2022
21. The complainant stated that he has produced the documents pertaining to the 26 acres. He do not remember about remaining 31 acre of land purchased by him. PW.1 further stated in his cross-examination that he had bank account with Andhra Bank, Indian Overseas Bank, Vijaya Bank and State Bank of India Bank, Chikkaballapura Branch. He has produced the statement related to these accounts. Accused not executed any Pronote, cheques, I.D card, Address Proof, except property documents. PW.1 do not remember how many balance amount in his account other than account maintained in the Vijaya Bank.
22. On 03.12.2018, PW.1 further tendered for cross- examination after production of Ex.P.20 to Ex.P.32.
Crl.A.No.887/2022 C/W 24 Crl.Rev.P.No.507/2022 During cross-examination he was unable to say who much amount has been paid towards purchase of the lands.
23. The wife of the complainant is examined as PW.2. She stated regarding they have obtained compensation of ₹.1,70,00,000/- from BMRCL in the month of July 2011. Accused availed hand loan of ₹.90,00,000/- for financial assistance and for financial assistance purpose. Further, she stated that her husband purchase 54 acres of land in Karnataka and Andhra pradesh.
24. During her cross-examination PW.2 stated that here husband bid the chit in Gokularm Chits, at that Crl.A.No.887/2022 C/W 25 Crl.Rev.P.No.507/2022 time, accused has given surety. Further, he stated that accused stood is surety for ₹.20,00,000/-by mortgaging the documents. Further stated that, they have not produced any document to show that having ₹.90,00,000/- in their hands.
25. Further, the accused himself examined as DW.1 before this court. He has filed affidavit in lieu of examination in chief wherein he categorically stated that he has not received any amount from the complainant for his business purpose and also not issued any cheque in question for repayment of the debt as alleged by the complainant. Further, he categorically stated that he has stood as surety for the chit bid by the complainant and his daughter for Crl.A.No.887/2022 C/W 26 Crl.Rev.P.No.507/2022 ₹.50,00,000/-. Int his regard, he has deposited his title deed and also executed mortgage deed and also he has issued blank signed cheques for security purpose. The complainant himself used the said cheque and filed false complaint against him. He has not financially sound to lend such a huge amount to him.
26. The DW.1 further stated in his chief examination that his property was acquired by the BMRCL and he was granted compensation of ₹.1,70,00,000/-. Out of that, he has purchased the lands admeasured 57 acres. Further he has no documents to show bid amount has been repaid to him.
Crl.A.No.887/2022 C/W 27 Crl.Rev.P.No.507/2022
27. During couse of cross-examination he stated that cheques in question belongs to his bank account. He himself has written the amount in words and also figures and put his signature. He is aware that his account maintained in the Vijaya Bank is closed and also he had issued Stop Payment instructions to the Vijaya Bank.
28. Further he stated that he has not lodged any complaint before the police after receipt of the notice. Further he stated that no criminal case (counter case) is filed after filing of the criminal proceedings against him. He admitted that as on the date of he stood as surety he was not a member of the Gokulam Chits. Further he stated that he having 12 apartments and Crl.A.No.887/2022 C/W 28 Crl.Rev.P.No.507/2022 his is doing construction business. The learned counsel for the accused specifically suggested that ₹.90,00,000/- received from the complainant is used for completion of the Commercial Building. This suggestion is categorically denied. Further stated that one Srinivas was running private chit funds. Further, the learned counsel for the accused specifically stated that C.Srinivas is his close friend, therefore, you are mentioning his name. This suggestions is denied.
29. One Bank Manger by name Manjunatha Reddy is examined on his behalf of the accused as DW.2. He stated that he has produced the account opening form marked at Ex.D.14, account statements as per Ex.D.15 Crl.A.No.887/2022 C/W 29 Crl.Rev.P.No.507/2022 and Ex.D.16. Cheque book received by the accused in the year 2010.
30. In the cross-examination DW..2 stated that cheques are valid for a period of 3 months from the date of issue. They have issued endorsement for dishonour of the cheque due to Stop payment instructions.
31. Another witness one Vinodan who is Assistant Manager of the Gokulam Chits is examined as DW.3. He deposed that he knows the complainant and how both are members of their chits. The complainant and his wife and daughter have obtained chits from their chits funds. Accused has given collateral surety for chit amount received by the accused. Further stated that Crl.A.No.887/2022 C/W 30 Crl.Rev.P.No.507/2022 chit amount of ₹. 7,91,000/- is adjusted to the chit amount of the complainant. Further stated that they have received information on the basis of the complaint lodged against the accused by the complainant. Further stated that, they have taken mortgage deed for collateral purpose.
32. During cross-examination he stated that as per the instructions of the accused, they have adjusted the amount ₹.7,92,700/- to the account of the complainant. They have not collected the cheques for security purpose.
Crl.A.No.887/2022 C/W 31 Crl.Rev.P.No.507/2022
33. On considering entire deposition of PW.1, PW.2 and DW.1, The followings facts is undisputed and admitted by both complainant and accused. 33.1 The complainant and accused are hails from same village and both are good friends since 20 years. 33.2 The accused doing construction business. He having 12 apartments in property out that he having commercial building.
33.3 The complainant and his daughter are membe₹ of Gokulam Chits Jayanagar Branch, Bengaluru. The complainant was bidding chit for ₹ 25/- lakhs and his daughter was bidding chit for ₹ 15/- lakhs. In order to Crl.A.No.887/2022 C/W 32 Crl.Rev.P.No.507/2022 return the chit amount, accused obtained the amount of ₹ 13 lakhs and repaid to Gokulam chits. 33.4 Accused stood surety for chit amount bid total amount of ₹ 40/- lakhs by depositing his property titles documents for collateral purpose, this facts revels from deposition of DW.3 and documents produced by DW.3. 33.5 A house property of complainant has been acquired by BMRCL for construction of Metro Rail in Bengaluru and he got compensation amount of ₹ 1,70,00,000/- through cheque.
33.6 After getting compensation amount, the complainant has purchased the agriculture land of 57 Crl.A.No.887/2022 C/W 33 Crl.Rev.P.No.507/2022 acres vicinity of Karnataka and Andra state borders by using compensation amount.
33.7 The Banasawadi police have registered the case against complainant and his daughter in crime No 499/2012, after investigation said police submitted charge sheet against them before learned 4th ACMM Bengaluru. Further both are facing criminal charges. 33.8 The disputed 12 cheques are belongs to account of accused, they have bears signature of accused. The accused himself handed over 12 cheques to complainant.
Crl.A.No.887/2022 C/W 34 Crl.Rev.P.No.507/2022 33.9 Prior to filing private complaint, the complainant has complied all statutory restriction/condition contemplated U/Sec 138 of N.I.Act. i.e., i. Presentation of cheques for encashment within stipulated time.
ii. reasons for dishonour of said cheques.
iii. issuance of statutory notice to accused.
iv. a service of notice statutory notice on accused and reply of accused to statutory notice and v. filing of private complaint before learned Trial Court within stipulated time.
34. Based on aforesaid admitted/undisputed facts, before examination of oral and documentary evidence and analysis the same, this Court has relied on Judgment of Hon'ble Supreme Court regarding burden Crl.A.No.887/2022 C/W 35 Crl.Rev.P.No.507/2022 of proof and rebut of presumption available in favour of complainant U/Sec 118 and Sec 139 of N.I.Act as under;
AIR 2023 SC 5018 Rajesh Jain Vs Ajay Singh BURDEN OF PROOF AND PRESUMPTIONS: CONCEPTUAL UNDERPINNINGS
29. There are two senses in which the phrase 'burden of proof ' is used in the Indian Evidence Act, 1872 (Evidence Act, hereinafter). One is the burden of proof arising as a matter of pleading and the other is the one which deals with the question as to who has first to prove a particular fact. The former is called the 'legal burden' and it never shifts, the latter is called the 'evidential burden' and it shifts from one side to the other. [See Kundanlal v. Custodian Evacuee Property (AIR 1961 SC 1316)]
30. The legal burden is the burden of proof which remains constant throughout a trial. It is the burden of establishing the facts and contentions which will support a party's case. If, at the conclusion of the trial a party has failed to establish these to the appropriate standards, he would lose to stand. The incidence of the burden is usually clear from the pleadings and usually, it Crl.A.No.887/2022 C/W 36 Crl.Rev.P.No.507/2022 is incumbent on the plaintiff or complainant to prove what he pleaded or contends. On the other hand, the evidential burden may shift from one party to another as the trial progresses according to the balance of evidence given at any particular stage; the burden rests upon the party who would fail if no evidence at all, or no further evidence, as the case may be is adduced by either side (See Halsbury's Laws of England, 4th Edition para 13). While the former, the legal burden arising on the pleadings is mentioned in Section 101 of the Evidence Act, the latter, the evidential burden, is referred to in Section 102 thereof. [G.Vasu V. Syed Yaseen (AIR 1987 AP139) affirmed in Bharat Barrel Vs. Amin Chand [(1999) 3 SCC 35] ]
31. Presumption, on the other hand, literally means "taking as true without examination or proof". In Kumar Exports v. Sharma Exports [(2009) 2 SCC 51320] this Court referred to presumption as "devices by use of which courts are enabled and entitled to pronounce on an issue notwithstanding that there is no evidence or insufficient evidence."
32. Broadly speaking, presumptions are of two kinds, presumptions of fact and of law. Presumptions of fact are inferences logically drawn from one fact as to the existence of other facts. Presumptions of fact are rebuttable by evidence to the contrary. Presumptions of law may be either irrebuttable (conclusive presumptions), Crl.A.No.887/2022 C/W 37 Crl.Rev.P.No.507/2022 so that no evidence to the contrary may be given or rebuttable. A rebuttable presumption of law is a legal rule to be applied by the Court in the absence of conflicting evidence (Halsbury, 4th Edition paras 111, 112]. Among the class of rebuttable presumptions, a further distinction can be made between discretionary presumptions ('may presume') and compulsive or compulsory presumptions ('shall presume'). [G. Vasu V. Syed Yaseen (Supra)]
33. The Evidence Act provides for presumptions, which fit within one of three forms: 'may presume' (rebuttable presumptions of fact), 'shall presume' (rebuttable presumption of law) and conclusive presumptions (irrebuttable presumption of law). The distinction between 'may presume' and 'shall presume' clauses is that, as regards the former, the Court has an option to raise the presumption or not, but in the latter case, the Court must necessarily raise the presumption. If in a case the Court has an option to raise the presumption and raises the presumption, the distinction between the two categories of presumptions ceases and the fact is presumed, unless and until it is disproved, [G.Vasu V. Syed Yaseen (Supra)] Section 139 NI Act-Effect of Presumption and Shifting of Onus of Proof
34. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is Crl.A.No.887/2022 C/W 38 Crl.Rev.P.No.507/2022 proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that 'unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability'. It will be seen that the 'presumed fact' directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138.
35. Section 139 of the NI Act, which takes the form of a 'shall presume' clause is illustrative of a presumption of law. Because Section 139 requires that the Court 'shall presume' the fact stated therein, it is obligatory on the Court to raise this presumption in every case where the factual basis for the raising of the presumption had been established. But this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary as is clear from the use of the phrase 'unless the contrary is proved'.
36. The Court will necessarily presume that the cheque had been issued towards discharge of a legally enforceable debt/liability in two circumstances. Firstly, when the drawer of the cheque admits issuance/execution of the cheque and secondly, in the event where the complainant proves that cheque was issued/executed in his favour by the drawer. The circumstances set out above form the fact(s) which bring Crl.A.No.887/2022 C/W 39 Crl.Rev.P.No.507/2022 about the activation of the presumptive clause. [Bharat Barrel Vs. Amin Chand] [(1999) 3 SCC 35]
37. Recently, this Court has gone to the extent of holding that presumption takes effect even in a situation where the accused contends that 'a blank cheque leaf was voluntarily signed and handed over by him to the complainant. [Bir Singh v. Mukesh Kumar {(2019) 4 SCC 19723}]. Therefore, mere admission of the drawer's signature, without admitting the execution of the entire contents in the cheque, is now sufficient to trigger the presumption.
38. As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Act helps shifting the burden on the accused. The effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further.
39. John Henry Wigmore (Rules of Evidence- The Hidden Origin of Modern Law )on Evidence states as follows:
Crl.A.No.887/2022 C/W 40 Crl.Rev.P.No.507/2022 "The peculiar effect of the presumption of law is merely to invoke a rule of law compelling the Jury to reach the conclusion in the absence of evidence to the contrary from the opponent but if the opponent does offer evidence to the contrary (sufficient to satisfy the Judge's requirement of some evidence), the presumption 'disappears as a rule of law and the case is in the Jury's hands free from any rule." (underline by me, for emphases)
40. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the non- existence of the presumed fact beyond reasonable doubt. The accused must meet the standard of 'preponderance of probabilities', similar to a defendant in a civil proceeding. [Rangappa vs. Mohan (AIR 2010 SC 1898)]
41. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words 'until the contrary is proved' occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist.[Basalingappa Vs. Crl.A.No.887/2022 C/W 41 Crl.Rev.P.No.507/2022 Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513]25
42. In other words, the accused is left with two options. The fi₹t option-of proving that the debt/liability does not exist-is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty one to forty nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his 313 statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was 'no debt/liability'. [Kumar Exports and Sharma Carpets, (2009) 2 SCC 513]
43. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact. (underline by me, for emphases) Crl.A.No.887/2022 C/W 42 Crl.Rev.P.No.507/2022
44. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. The burden of proof may shift by presumptions of law or fact. In Kundanlal's case- (supra) when the creditor had failed to produce his account books, this Court raised a presumption of fact under Section 114, that the evidence, if produced would have shown the non- existence of consideration. Though, in that case, this Court was dealing with the presumptive clause in Section 118 NI Act, since the nature of the presumptive clauses in Section 118 and 139 is the same, the analogy can be extended and applied in the context of Section 139 as well.
45. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit- evidence, the burden shifts to the complainant and Crl.A.No.887/2022 C/W 43 Crl.Rev.P.No.507/2022 the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Sri Mohan (2010) 11 SCC 441] (underline by me, for emphases)
35. By following and keeping in mind the above principles laid down by their lordship, I have examined the oral testimony of witness examined on behalf of the complainant as well as accused and also perused the documents. Already this Court noticed that there is no disputed regarding the complainant and his daughter bid the total amount of ₹.50,00,000/- from Gokulam Chits. The accused stood as surety for the chit amount Crl.A.No.887/2022 C/W 44 Crl.Rev.P.No.507/2022 received by the complainant and his daughter by executing/depositing of title deed. These facts are admitted one.
36. In this case, the accused himself unequivocally admitted that himself has handed over the 12 cheques to the complainant and further he has also stated that himself has written the amount in words and figures and also put his signatures. Therefore, heavy burden lies on accused to disprove the complainant's contention and rebut the presumption based on doctrine of reverse burden as law settled by Hon'ble Supreme Court in Rangappa Vs Mohan's case (AIR 2010 SC 1898).
Crl.A.No.887/2022 C/W 45 Crl.Rev.P.No.507/2022
37. Immediately, after dishonour of the cheque complainant got issued notice, the said notice is duly served on the accused and replied him by put forth his defence that he has not received amount from the complainant as alleged for construction of the Commercial building. His specific stand is that the said cheques are issued for collateral purpose for the chit amount received by the complainant. In this case, the evidence of DW.3 is very important one. In his cross- examination he has stated that they have not issued cheque for security purpose. Hence, heavy burden lies on the accused to prove that, he has not issued cheque for repayment of the loan as alleged by the complainant. In this case, accused has taken specific contention that the complainant has not independent Crl.A.No.887/2022 C/W 46 Crl.Rev.P.No.507/2022 income to lend such huge amount. The complainant himself stated that his house was acquired by the BMRCL for construction of the Metro. Further he has taken contention that he has got compensation amount of ₹.1,70,00,000/-. Further the matter is that by using the compensation amount he has purchased 57 acres of land out of that one land situated at CMH Road, Bengaluru. In this regard, he has produced the released deed, sale deed pertaining to 21 acres of land. He has no hurdles produced document pertaining to 31 acres of land. These documents is not produced by him. In this regard, the learned counsel for the accused extracted from the mouth of PW.1 same is reiterated for better appreciation of evidence.
"ನಾನು ಸತ್ಯ ವನ್ನು ಮರೆಮಾಚುವ ಉದ್ದೇಶದಿಂದ ನಾನು ನ್ಯಾಯಲಯಕ್ಕೆ ಕೇವಲ 2 ಎಕರೆ, 2 ಎಕರೆ 32 ಗುಂಟೆ Crl.A.No.887/2022 C/W 47 Crl.Rev.P.No.507/2022 ಮತ್ತು 69, 69, ಸೆಂಟ್ಸ್ ಸಂಬಂಧ ಪಟ್ಟ ದಾಖಲೆಗಳನ್ನು ಮಾತ್ರ ಹಾಜರು ಪಡಿಸಿದ್ದೆನೆ ಎಂದರೆ ಸರಿ. ನಾನು ಒಟ್ಟು ಎಷ್ಟು ಎಕರೆ ಜಮೀನನ್ನು ಖರೀದಿ ಮಾಡಿದ್ದೇನೆ ಎಂದು ಸರಿಯಾಗಿ ನೆನಪಿಲ್ಲ ."
38. In view of this admission on the part of the complainant, it clearly discloses that he has with hold the true material facts before the Court and hidden the same, the best reasons know to him. Therefore, this Court has relied on Judgment of Supreme Court is as under;
(1994) 1 SCC 1 S.P. Chengalvaraya Naidu v. Jagannath & O₹.
"5. The High Court, in our view, fell into patent error. The short question before the High Court was whether in the facts and circumstances of this case, Jagannath obtained the preliminary decree by playing fraud on the court. The High Court, however, went haywire and made observations which are wholly perverse. We do not agree with the High Court that "there is no legal duty cast Crl.A.No.887/2022 C/W 48 Crl.Rev.P.No.507/2022 upon the plaintiff to come to court with a true case and prove it by true evidence". The principle of "finality of litigation" cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The courts of law are meant for imparting justice between the parties. One who comes to the court, must come with clean hands. We are constrained to say that more often than not, process of the court is being abused. Property-grabbers, taxevaders, bank-loan- dodgers and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal gains indefinitely. We have no hesitation to say that a person, who's case is based on falsehood, has no right to approach the court. He can be summarily thrown out at any stage of the litigation."
(underline by, for emphasis)
39. In this case, the accused successfully proved the financial condition of the complainant. There is no dispute regarding himself and his daughter bid the amount of ₹.35,00,000/- and ₹.15,00,000/- from Gokulam Chits they have received total amount of ₹.50,00,000/-. There is no documents to show that Crl.A.No.887/2022 C/W 49 Crl.Rev.P.No.507/2022 they have repaid the said amount after or before lending of the amount to the accused and after receiving compensation amount from BMRCL.
40. There is no disputed regarding when he has purchased 57 acres of land. The learned counsel for the accused urged that, out of the compensation amount, of ₹.90,00,000/- received from the BMRCL he has purchased 57 acres of land for market value of ₹.1,14,00,000/-.
41. It is specific case of the complainant that he has paid ₹.90,00,000/- to the accused in the last week of July 2011. In complaint he has stated that on different dates the accused has received amount from the Crl.A.No.887/2022 C/W 50 Crl.Rev.P.No.507/2022 complainant totally an amount of ₹.90,00,000/- is paid. In his oral evidence, he has stated that he has paid ₹.90,00,00/- installments to the accused. In this case, accused has to prove that the complainant is able to lend ₹.90,00,000/- to him. Further complainant has not produced any document to show that, whether he has repaid chits amount, after getting compensation amount. By considering all these aspects, the Court can presume cheque issued cheques to discharge of debt and no presumption regarding existence of legal enforceable debt or other liability. In this case, accused has successfully proved that, financial status of complainant. The complainant has received compensation amount of ₹ 1,70,00,000/-. By using this amount he has purchased 57 acres land. The Crl.A.No.887/2022 C/W 51 Crl.Rev.P.No.507/2022 complainant has not disclosed how much amount retained with him after payment of sale consideration. Further, the complainant has not disclosed that whether he has repaid the chits amount. This burden of onus is not discharged by the complainant. Therefore, it is held that, he has not proved by cogent and revelant evidence regarding existence of debt. By looking into the evidence of complainant, it proves that there is no chance that he can lend huge amount like ₹.90,00,000/- to the accused. The best reasons know to complainant why he withhold the important documents in support of this his claim. Hon'ble Supreme Court recently held in Rekha Sharad Ushir Vs. Saptashrungi Mahila Nagari Sahkari Patsansta Ltd [Crl Appeal No. 724/2025, Dtd 26.3.2025] that if Crl.A.No.887/2022 C/W 52 Crl.Rev.P.No.507/2022 complainant has suppressed the true materials facts in complaint, such complaints requires to quashed. There is no legally enforceable debt towards the complainant. Accordingly, Point No.1 is answered in the Negative.
42. Point No.2 :-
For the forgoing it is held that the complainant has not discharged his burden and not proved the existence of loan. The complainant has not got financial capacity to lend huge amount of ₹.90,00,000/- to the accused. Ac -
cordingly, it is held that the accused is entitled for ac-
quittal for the offence punishable U/s.138 of N.I Act. In the result, appeal preferred by the accused is allowed and the revision petition filed by the complainant is not Crl.A.No.887/2022 C/W 53 Crl.Rev.P.No.507/2022 maintainable. Therefore, Point No.2 is answered in the Negative.
43. Point No.3 :-For the forgoing reasons, I proceed to pass the following:
ORDER The Appeal filed by the Appellant/ accused U/s.374(3)(a) of Cr.P.C. is hereby allowed.
Further, the Judgment and order passed by the learned 8th ASCJ and CMM, Bengaluru in C.C.No.27536/2012 dated 29.06.2022 is hereby set-aside.
Accused is hereby acquitted for the alleged offence punishable U/s.138 of N.I Act.
Crl.A.No.887/2022 C/W 54 Crl.Rev.P.No.507/2022 Bail bond executed by the accused and his surety stands cancelled. Surety is discharged.
The Trial Court is hereby directed to released the fine amount in favour of the accused if deposited.
The complainant shall repaid the compensation amount to accused, if received from him with interest as per the rate fixed by the RBI in the month of May 2025 within 30 days from the date of this order.
The Revision Petition filed by the complainant is hereby dismissed. Office is directed to keep the original
judgment in this appeal and its kept in Crl Rev P.No.505/2022.
Crl.A.No.887/2022 C/W 55 Crl.Rev.P.No.507/2022 Office is directed to sent the TCR along with the copy of this order forthwith.
(Dictated to Stenographer, typed by her, taken out print corrected by me and then pronounced in the Open-Court on this the 2nd day of May, 2025) Digitally signed irappanna by irappanna (Sri. I. P. Naik) LXIII Addl. City CivilPavadi Naik and Sessions PavadiJudge (CCH-64), Bengaluru Date: City.
Naik 2025.05.02
17:24:22 +0530
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Crl.Rev.P.No.507/2022
(Order typed vide separate sheet)
ORDER
The Appeal filed by the
Appellant/accused U/s.374(3)
(a) of Cr.P.C. is hereby
allowed.
Further, the Judgment
and order passed by the
learned 8th ASCJ and CMM,
Bengaluru in
C.C.No.27536/2012 dated
29.06.2022 is hereby set-
aside.
Accused is hereby
acquitted for the alleged
offence punishable U/s.138 of
N.I Act.
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Bail bond executed by
the accused and his surety
stands cancelled. Surety is
discharged.
The Trial Court is hereby
directed to released the fine
amount in favour of the
accused if deposited.
The complainant shall
repaid the compensation
amount to accused, if received
from him with interest as per
the rate fixed by the RBI in
the month of May 2025 within
30 days from the date of this
order.
The Revision Petition
filed by the complainant is
hereby dismissed.
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58
Crl.Rev.P.No.507/2022
Office is directed to keep
the original judgment in this
appeal and its kept in Crl Rev
P.No.505/2022.
Office is directed to sent
the TCR along with the copy
of this order forthwith.
LXIII ACC & SJ(CCH-64),
Bengaluru City
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