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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
G. Basavaraja, J.
Rammurthy R, S/O. Ramaiah - Appellant
Versus
Venkatesh Murthy S., S/O Siddappa M. – Respondent
Criminal Appeal No.525 of 2014
Decided On : 09-12-2025
Key Points: - The appellant challenged the trial court's acquittal in C.C No. 961/2012 under Section 138 of the NI Act due to alleged inconsistencies and failure to draw adverse inferences [1][3][6][7] - Complainant alleged Rs.4,00,000 hand loan in June 2011, cheque issued on 04.11.2011 dishonored for insufficient funds [3][12][18] - PW1 admitted in cross-examination that cheque was issued on 05.06.2011 (pre-dated) and prior remittances of Rs.60,000 by accused via Exs.D1-D8, contradicting no-transaction claim [13][19][20] - Trial court acquitted accused finding inconsistencies in PW1 evidence, lack of financial capacity of complainant, and rebuttal of Section 139 presumption via Ex.D9(a) showing blank cheque for Rs.40,000 [5][21][25] - Appellate court outlined principles for appeals against acquittal: interference only if perverse, ignores material evidence, or no reasonable view supports acquittal (!) (!) (!) (!) - Court re-appreciated evidence, found trial court's view possible due to PW1 contradictions and accused's documentary proof [19][20][21][24][25] - No reply to notice by accused does not override inconsistencies; financial capacity not sole basis for acquittal [7][9][22][24] - Appeal dismissed, upholding acquittal as trial court's findings not perverse or illegal (!) [25]
| Table of Content |
|---|
| 1. allegation of non-repayment of loan leading to cheque dishonor. (Para 3 , 4 , 6 , 18) |
| 2. trial court's examination of evidence regarding financial transactions. (Para 5 , 8 , 9 , 21) |
| 3. appellant's argument on the insufficiency of trial court's reasoning. (Para 7 , 10 , 25) |
| 4. the appellate court upholds the trial court's ruling on acquittal. (Para 24) |
JUDGMENT :
G Basavaraja, J.
The complainant/appellant has preferred this appeal against the judgment of acquittal passed by the XXI Addl. C.M.M, Bangalore in C.C No. 961/2012 dated 21.05.2014.
2. For the sake of convenience, the parties herein are referred to as per their status before the trial Court.
3. Brief facts leading to this appeal are that the complainant has filed a complaint under Section 200 of Cr.P.C for the offence punishable under Section 138 of NI Act. It is alleged in the complaint that the accused and complainant are family friends and they know to each other since several years. The accused has approached the complainant in the month of June-2011 for financial assistance of Rs.4,00,000/- for his family necessities and discharged his legal. The complainant has paid a sum of Rs.4,00,000/- to the accused by cash, as a hand loan. The accused agreed to repay the loan within 5-6 months with nominal interest. The accused has not kept his words, and has not paid the amount. The complainant approached the accused personally and demanded for repayment of hand loan with interest. The accused has issued a cheque bearing No.018322 dated 04.11.2011 drawn on Canara Bank, Hombegowda Nagar Branch, Bangalore for Rs.4,00,000/- . The cheque was presented for encashment through State Bank of Mysore, Vyalikaval Branch, Bengaluru on 04.11.2011 itself, but the cheque was returned with an endorsement “Funds Insufficient”. The bank has issued a memo dated 16.11.2011, it was returned to the accused, but he has not responded properly. Subsequently, complainant has issued another legal notice on 28.11.2011 by RPAD to his residential address as well as work place. The legal notice was served on the accused. The accused has not kept sufficient balance in his account, when the cheque was presented for encashment. Thus, the accused has committed the offence punishable under of N.I Act.
4. The Court has taken cognizance of the offence and summons was issued to the accused. In response to summons, the accused has appeared through his counsel and enlarged on bail. Substance of plea was recorded. Accused pleaded not guilty and claimed to be tried.
5. To prove the guilt of the accused, the complainant was examined as PW1 and produced 5 documents marked as Exhibits P1 to P5. On closure of prosecution side evidence, statement under Section 313 of Cr.P.C was recorded. Accused has totally denied the evidence of PW1. He has adduced evidence of two witnesses as DW1 and DW2 and produced 13 documents as Exhibits DW1 to DW13.
6. Having heard the arguments on both sides, the trial Court has acquitted the accused. Being aggrieved by this judgment of acquittal, the complainant has preferred this appeal.
7. The learned counsel for the appellant would submit that the judgment passed by the learned Magistrate acquitting the respondent is opposed to law and the same is contrary to the evidence on record. The learned Magistrate ought to have drawn adverse inference on the fact, that despite receipt of notice, the respondent has not replied. In fact, this crucial aspect does not find place in the discussion while arriving at conclusion. The trial Court has completely failed in appreciating the fact that documents produced by the respondent are irrelevant and the respondent deliberately created a story to deviate the attention of the Court. In the first place, respondent having failed to reply to the notice clearly shows that entire story is an afterthought. If the contention pleaded by the respondent is to be believed, the first question that arises for consideration is, why such a point was not raised by re
The appeal was dismissed as the trial court found inconsistencies in evidence and upheld the presumption of innocence in favor of the acquitted accused.
The presumption of the issuance of a cheque in discharge of a debt under Sections 138 and 139 of the NI Act must be upheld in the absence of substantial evidence to the contrary from the accused.
The burden of proof in Section 138 NI Act cases shifts to the complainant when the accused challenges their financial capacity, emphasizing that presumption of innocence protects the acquitted party.
Dishonour of cheque – When Complainant has not established his financial status, presumption is not available in his favour.
Presumption under Sections 118(a) and 139 of NI Act rebutted on preponderance of probabilities where cross-examination shows complainant's lack of financial capacity as housewife with unproven remitt....
Cheque for time-barred debt not liable under Section 138 NI Act; Sections 118/139 presumption rebutted by prior stop payment on lost cheque and lack of financial capacity proof; acquittal interferenc....
The burden of proof lies with the complainant to establish the existence of a legally enforceable debt and their financial capacity to advance the loan.
Point of Law : When the accused was under financial constraints, the loan was taken and not disputed the fact that the cheque was given in 2004. Though contended that date of cheque has not been ment....
The burden is on the complainant to prove financial capacity when questioned; a mere presumption does not suffice if evidence is lacking.
The presumption of innocence is reinforced in acquittal cases, with the burden of proof on the complainant to establish the enforceable debt and financial capacity.
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