IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25^TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH CRIMINAL APPEAL NO.1909/2019 BETWEEN:

THE VENKATARAMAN CREDIT CO-OPERATIVE SOCIETY (R), SULLIA BRANCH AT PADMA COMPLEX, OPP : INDIANA HOSPITAL, PUMPWELL, MANGALURU, D.K. DISTRICT-575 001.

REPRESENTED BY ITS BRANCH MANAGER, SRI. VIMALAKSHA P., AGED ABOUT 43 YEARS. … APPELLANT (BY SRI. BALAKRISHNA M.R., ADVOCATE)

AND:

SRI. GOWTAM S/O. LATE GOPALAKRISHNA, AGED ABOUT 33 YEARS, R/AT NO.7-27, NEAR LAKSHMI VENKATESHWARA TEMPLE, TENKULIPADY VILLAGE, POST MALALI, MANGALURU TALUK, D.K. DISTRICT-574 165. … RESPONDENT (BY SRI. J. SATHISH KUMAR, ADVOCATE)

THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4)

OF CR.P.C. PRAYING TO SET ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 06.09.2019 PASSED BY THE JMFC (V COURT), MANGALURU, D.K. DISTRICT IN C.C.NO.1273/2017 - ACQUITTING THE RESPONDENT/ACCUSED FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF NEGOTIABLE INSTRUMENTS ACT AND ETC.

THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 18.07.2025 THIS DAY, THE COURT PRONOUNCED THE FOLLOWING:

CORAM: HON'BLE MR. JUSTICE H.P.SANDESH

CAV JUDGMENT

Heard the learned Counsel for the appellant and the learned Counsel for the respondent.

2. This criminal appeal is filed praying this Court to set aside the judgment and order dated 06.09.2019 passed in C.C.No.1273/2017 on the file of JMFC (V Court), Mangaluru for the offence punishable under Section 138 of N.I. Act.

3. The factual matrix of the case of the complainant/appellant before the Trial Court is that the complainant is a registered Credit Co-operative Society. That the accused has approached the complainant on 21.05.2016 with a request for grant of loan of Rs.26,60,000/- for purchase of Ashok Leyland Tipper. Hence, the complainant has sanctioned a loan of Rs.26,50,000/- to the accused as per its resolution No.59/2 dated 09.06.2016 and the accused has executed a bond in favour of the complainant on 24.06.2016 along with two sureties and also executed letter of guarantee in favour of complainant and also executed a Deed of Hypothecation by hypothecating the Ashok Leyland Tipper bearing Reg. No.KA19- AB-6150 and also executed a promissory note in favour of complainant along with two sureties. The amount was paid by way of Cheque. As per the terms and condition of the loan, the accused has agreed to repay the loan by 60 monthly installments. The accused was very irregular in payment of the loan installments and hence, the complainant repeatedly requested the accused to pay the loan installments. But he has not paid the overdue loan amount. Hence, the complainant seized the hypothecated tipper and issued a notice to the accused to settle the loan amount but, the accused has not responded to the said notice. Hence, the officer of the complainant personally visited the accused residence and advised him to repay the loan amount or otherwise, the complainant society will proceed to sell the hypothecated tipper. Then, the accused issued a Cheque for Rs.27,94,502/- but the said Cheque was dishonoured and thereafter, the complainant society again issued a notice to the accused but the accused has not paid the amount as mentioned in the Cheque. Hence, the complainant instead of taking legal action against the accused, proceeded to auction the tipper by issuing publication and sold the hypothecated vehicle on 19.04.2017 in a public auction to the highest bidder for Rs.19,50,000/- and adjusted the said amount towards the accused loan account and after adjusting also, the accused is liable to pay a sum of Rs.10,32,977/-. On demand, the accused again issued a Cheque for Rs.10,32,977/- to the complainant and the said Cheque was also returned with an endorsement ‘insufficient funds’. Thereafter, the complainant had issued a legal notice dated 23.05.2017 calling upon the accused to pay the amount covered under the dishonoured Cheque through registered post and when acknowledgment was not received