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IN THE HIGH COURT OF KARNATAKA
Rajendra Badamikar, J.
Prakash Shetty - Appellant
Versus
Venkatesha - Respondent
Criminal Appeal No. 1237/2018
Decided On : 08-02-2022
Sec. 138 of NI Act - Appeal against Acquittal - Sec. 378(4) of Cr.P.C. - [Sec. 138 of NI Act] - The court discussed the provisions of Sec. 138 of the Negotiable Instruments Act, 1881 and Sec. 378(4) of the Code of Criminal Procedure. The interpretation of Sec. 138 and the burden of proof on the complainant were key legal provisions influencing the court's decision. The court emphasized that the transaction between the parties was of a civil nature and the complainant's attempt to give a criminal color to the transaction was impermissible under the law.
Fact of the Case:
The complainant alleged that the accused failed to register sites in his favor after receiving an earnest amount and issued a cheque that bounced. The trial court acquitted the accused, leading to the appeal.
Finding of the Court:
The court found that the transaction between the parties was of a civil nature and the complainant's attempt to give a criminal color to the transaction was impermissible under the law. The court concluded that the complainant failed to prove the guilt of the accused beyond all reasonable doubt.
Issues: The issues revolved around the nature of the transaction, the validity of the cheque, and the burden of proof on the complainant.
Ratio Decidendi: The court emphasized that the transaction between the parties was of a civil nature and the complainant's attempt to give a criminal color to the transaction was impermissible under the law. The burden of proof was on the complainant to establish the guilt of the accused beyond all reasonable doubt.
Final Decision: The appeal was dismissed, and the judgment of acquittal passed by the trial court was confirmed.
JUDGMENT
1. This appeal is filed by the complainant/appellant under Sec. 378(4) of Cr.P.C. against the judgment and order of acquittal passed by the XXII ACMM, Bengaluru ('trial Court' for short) in C.C.No.9997/2017 dtd. 30/4/2018, whereby the sessions judge has acquitted the accused/respondent for the offence punishable under Sec. 138 of Negotiable Instruments Act, 1881 ('NI Act' for short).
2. For the sake of convenience parties herein are referred to their original ranks occupied by them before the trial Court.
3. The brief factual matrix leading to the case are as under:
That the complainant is running his own bakery in the name and style of Prakash Tea House(Bakery) and accused is doing real estate business. That in the first week of October 2015, the complainant has approached the accused with an intention to purchase the site and accused has agreed for the same. That in the second week of October, 2015, the accused has shown the complainant the sites bearing Nos.36, 37 and 38 in Dwarakanagar, Chikkabanavar, Bengaluru City and then the complainant had paid a sum of Rs.12,50,000.00 as an earnest amount. That the accused has failed to get register the sites in favour of the complainant inspite of persistent demands made by the complainant and on 5/12/2015 there was an agreement entered between the parties. Then accused has issued a cheque dtd. 5/12/2015 for a sum of Rs.12,50,000.00 after execution of the agreement and asked the complainant for presenting the cheque for encashment on 21/2/2017. The complainant has presented the said cheque on 21/2/2017 and same was returned with a shara as 'insufficient funds'. Then on 1/3/2017 the complainant had issued a legal notice to the accused. The accused did not repay the said amount nor replied to the notice and hence, the complainant has filed a complaint under Sec. 200 of Cr.P.C. alleging that accused has committed an offence under Sec. 138 of NI Act.
4. After submission of the complaint, the learned magistrate has recorded the sworn statement and after appreciating the material records he has taken cognizance and issued process against the accused. The accused has appeared through his counsel and was enlarged on bail. The plea was recorded and accused pleaded not guilty. Then the complainant got examined himself as PW.1 and also got examined one witness on his behalf as Pw.2. Further he placed reliance on 16 documents marked as Ex.P1 to Ex.P16.
5. After completion of evidence of complainant, the statement of accused under Sec. 313 of Cr.P.C. is recorded to enable the accused to explain the incriminating evidence appearing against him in the case of the prosecution. The case of the accused is of total denial. However, he did not lead any defence evidence.
6. Having heard the arguments and after appreciating the evidence on record, learned magistrate came to a conclusion that complainant has failed to prove that the accused has availed hand loan of Rs.12,50,000.00 from the complainant and in discharge of the same he has issued a cheque as per Ex.P1. Hence, he has acquitted the accused of the charge under Sec. 138 of NI Act.
7. Being aggrieved by this judgment of acquittal the complainant has filed this appeal.
8. Heard the arguments advanced by both the counsels and perused the records of the trial Court.
9. Learned counsel for the appellant would contend that the trial Court has committed an error in acquitting the accused. He would further contend that there is no challenge to the signature on the cheque and admittedly cheque belongs to the accused and the trial Court has committed an error in not drawing presumption in favour of the complainant under Sec. 139 of NI Act. He would further contend that the trial Court on presumptions and assumptions has misconceived the evidence and acquitted the accused which has resulted in miscarriage of justice. Hence, he would seek for setting aside the impugned judgment of acquittal by allowing the appeal and convicting the respondent-accuse
The burden of proof under Section 138 of the Negotiable Instruments Act lies on the accused to show that the cheque was not issued in discharge of any debt or liability.
The burden of proof to rebut the presumption of consideration under the N.I. Act lies with the accused, who must meet the standard of preponderance of probability.
Presumption under Sections 118(a)/139 NI Act rebutted by probable defence evidence that cheque was security for shop 'Pagri' payable only on possession delivery, which failed; unregistered long-term ....
A complainant must demonstrate ownership as the payee or holder in due course to maintain a complaint under Section 138 of the NI Act; failure to establish this results in dismissal.
Dishonour of cheque – It cannot be a probable defence that complainant has no capacity to pay money until and unless initial defence is set up by a reply notice or accused examines his witnesses and ....
In a case under Section 138 of the N.I. Act, the burden of proof shifts to the appellant once the respondent raises a probable defense.
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the onus is on the complainant to prove the offence beyond reasonable doubt.
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