Sri Sunil Kumar vs Sri Nandala Balaiah And Anr on 24 January, 2025

Telangana High Court

Sri Sunil Kumar vs Sri Nandala Balaiah And Anr on 24 January, 2025

         THE HONOURABLE SRI JUSTICE K.SURENDER
              CRIMINAL APPEAL No.1069 OF 2012
JUDGMENT:

The appellant/complainant preferred this appeal aggrieved by

the acquittal recorded by the Sessions Judge, Nizamabad, in

Crl.A.No.96 of 2011, dated 16.05.2012 under Section 138 of the

Negotiable Instruments Act, 1881.

2. The case of the complainant/PW.1 is that he is well acquainted

with the accused/DW.1, who borrowed Rs 7,00,000 on 21.7.2002,

agreeing to repay the amount with an interest of 18% per annum

within one year. Upon demand for repayment of the loan, accused

issued Ex.P1-cheque bearing no. 466563 for Rs 10,15,000, drawn on

Corporation Bank, Nizamabad, dated 24.1.2005, in favor of

complainant to discharge his liability. On 27.1.2005, complainant

presented the cheque for encashment through Sree Rama Grameena

Bank, but it was dishonoured with the endorsement “insufficient

funds” in accused’s account, as indicated in the cheque return memo

by Corporation Bank, Nizamabad. Complainant issued a legal notice

(Ex.P3) to the accused on 23.2.2005, demanding repayment of the

cheque amount. Accused replied to the notice on 12.3.2005, denying
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the liability (Ex.P5). PW2, Manager of Corporation Bank, testified

that Ex.P1 cheque was issued from his bank and was returned due

to insufficient funds, as evidenced by Ex.P2. PW3, Manager of

Deccan Grameena Bank, stated that complainant is an employee of

his bank and confirmed that Ex.P1 was returned by Corporation

Bank due to insufficient funds. He also acknowledged the difference

in the ink and pen used for the signature and for filling in the other

particulars of Ex.P1.

3. According to accused, he neither received any amount from

complainant nor issued any cheque to him to discharge any debt or

legally enforceable liability. Accused claimed that complainant, a

close relative of Girish Kumar, borrowed Rs 7,00,000 from him on

20.9.2000 and executed a demand promissory note (Ex.D1) on the

same date in the presence of witnesses DW.2 (A. Rajaram) and K.

Prakash. Despite repeated requests, complainant failed to return the

loan amount. Complainant, along with Girish Kumar, executed an

acknowledgment of debt cum undertaking on 21.7.2002 (Ex.D.4),

agreeing to repay the said amount with interest. When they failed to

do so, accused issued them a legal notice dated 12.3.2005 (Ex.D2),

but the amount and interest remained unpaid. Girish Kumar issued
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a cheque dated 15.7.2005 for Rs 7,00,000 (Ex.D6). When accused

presented the cheque for encashment on 10.1.2006, it was returned

due to insufficient funds in Girish Kumar’s account. Accused

subsequently filed a complaint under Negotiable Instruments Act

against Girish Kumar, which is pending before the mobile court.

Ex.D10 is the CC of the complaint. Accused further alleged that he

had monetary transactions with complainant’s father-in-law,

Raghunatha Rao, who took two blank signed cheques from accused

and failed to return them. Accused claimed that complainant took

one of these blank signed cheques from his father-in-law, filled in the

details, and filed a false case against him.

4. Learned Special Magistrate having considered the evidence

placed on record by both the complainant and accused, convicted

the accused and the findings of the learned Magistrate are;

i) The accused did not initially examine DW.3-Raghunatha Rao or

any other witness to substantiate the monetary transaction between

them. Ex.D9, a receipt showing Raghunatha Rao received Rs.

1,10,000 from the accused, remained unproved as it was

unstamped, and Raghunatha Rao was not examined to confirm the

receipt’s authenticity or signature. Additionally, complainant denied
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any monetary dealings between the accused and Raghunatha Rao.

The accused later filed a petition to summon Raghunatha Rao as a

court witness to prove the genuineness of Ex.D9. Upon examination

as DW3, Raghunatha Rao denied lending any loan to the accused or

taking two blank cheques, including Ex.P1, as security. He also

denied that Ex.D9 bore his handwriting or signature. Handwriting

samples of DW3 were taken by defence counsel for comparison with

Ex.D9, but they did not match. The accused took no steps to send

the receipt for forensic examination. The learned Magistrate also

observed that the accused did not issue any notice to Raghunatha

Rao for the cheque’s return or address any communication to the

bank authorities to stop the cheque from being honoured.

ii) The learned Magistrate observed that if the accused had indeed

lost his cheque, he should have notified the bank authorities, which

he failed to do. Moreover, no suggestion was made to PW.2, the

Corporation Bank Manager, regarding the alleged misplacement of

the cheque. The learned Magistrate concluded that the conflicting

versions presented by the accused indicate that his story was

fabricated to rebut the statutory presumption in favor of the

complainant.

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iii) The learned Magistrate observed that the accused, in response

to complainant’s legal notice under Ex.P3, issued Ex.P5 reply notice

and Ex.D2 notice to complainant on 12.3.2005, alleging the loan.

However, the learned Magistrate remarked that the accused’s silence

until receiving Ex.P3 was questionable. Furthermore, complainant

denied his signatures on Ex.D1 and Ex.D4, and the accused did not

take steps to send these disputed signatures for forensic

examination. The accused also failed to examine Girish Kumar.

Learned Magistrate further observed that, given the ongoing legal

battle between complainant and the accused, the claim that Girish

Kumar issued a cheque to the accused on behalf of complainant

under Ex.D6 does not arise and is doubtful. Regarding DW.2’s

testimony, the learned trial judge noted that while DW.2 stated

complainant borrowed Rs. 7,00,000 under Ex.D1, his evidence was

unreliable as it emerged that he frequently borrowed money from the

accused. Additionally, DW2’s ignorance of whether complainant lent

Rs. 7,00,000 to the accused rendered his testimony unhelpful.

iv) The learned Magistrate concluded that Ex.D1, Ex.D4, and

Ex.D6 were not connected to the present case, and the accused

failed to rebut the presumption against him. It is also observed by
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the trial Court that it was undisputed that no document was

executed by complainant when lending the loan. However, the trial

Court considered complainant’s testimony that he had known the

accused for 15 years, they were both devotees of RK Rao, and he

gave the loan in good faith. In contrast, the trial Court noted the

accused’s statement that he had known complainant for only 5 to 6

years. The trial Judge remarked that if the accused claimed to have

lent complainant a loan in the year 2000, it was unclear how their

acquaintance spanned only 5 to 6 years.

v) It was further observed that there is no prohibition on lending

a loan without obtaining a security document. Finally, the learned

Magistrate concluded that in the absence of cogent and convincing

evidence to rebut the presumption under Section 118 read with

Section 139 of the Negotiable Instruments Act, the accused’s claim

that complainant advanced such a large amount to him could not be

accepted.

vi) The learned Magistrate judge observed that the accused (DW1)

admitted he did not know how to read or write English, making it

unlikely that he filled out the cheque himself. Instead, he must have
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had someone else fill in the contents. It was also noted that

complainant never claimed the accused filled out the cheque and

signed it in his presence.

vii) The learned Magistrate acknowledged that PWs. 1 and 3

admitted to a difference in the ink used for the signature and the

contents of the cheque. However, nothing was elicited from

complainant about the circumstances under which Ex.P1 was filled

in different inks. Moreover, it was not the accused’s case that

complainant himself filled out the cheque. It is further noted that the

accused failed to prove that Ex.P1 was issued blank to complainant’s

father-in-law, Raghunatha Rao, and subsequently misused by

complainant to file the complaint.

viii) The learned Magistrate acknowledged this inconsistency in

complainant’s cross-examination as to whether he lent Rs.7 lakhs in

lumpsum or on two occasions and noted that complainant clarified

that 21.7.2002 was the date on which he paid the balance amount of

Rs. 7,00,000 as a loan to the accused. It is observed that no further

suggestions were made to complainant denying this clarification and

found no inconsistency regarding the total amount borrowed by the
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accused. The omission of details in the complaint and legal notice

was deemed not material enough to constitute a contradiction.

ix) The learned Magistrate considered that during the cross-

examination of accused on 7.12.2010 and two other occasions, the

accused sought time to compromise the matter. The trial Court

remarked that if the accused had not issued Ex.P1-cheque towards a

legally enforceable debt, he would not have sought a compromise

with complainant.

x) Finally, it was concluded that the accused failed to discharge

his burden, even based on the preponderance of probabilities.

5. Learned Counsel appearing for the appellant/complainant

would submit that the learned appellate Court Judge had reversed

the well reasoned Judgment of the trial Court convicting the

accused. Contradictory defence was taken by the appellant. Once the

signatures on the cheque were admitted, the burden shifts on to the

accused, which was not discharged as rightly held by the Trial Court.

The contradiction in the defence was regarding the issuance of

cheque. In Ex.P5-reply notice, the accused stated that the cheque

was missing. Whereas, a totally different version was given during
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the course of trial by stating that the cheque in question was given to

the father-in-law of the appellant/complainant.

6. Learned Counsel relied on the Judgments rendered by the

Honourable Supreme Court in;

i) Sumeti Vij v. Paramount Tech Fab Industries (2022) 15 SCC

689

ii) Kalamani Tex and others v. P.Balasubramanian (2021) 5 SCC

283

iii) Rohitbhai Jivanlal Patel v. State of Gujarat and others

(2019) 18 SCC 106

iv) Bir Singh v. Mukesh Kumar (2019) 4 SCC 197

v) R.Vijayan v. Baby and others (2012) 1 SCC 260

vi) Rangappa v. Mohan (2010) 11 SCC 441

vii) ICDS Ltd. v. Beena Shabeer and others (2002) 6 SCC 426

viii) Dalmia Cement Ltd. v. Galaxy Traders (2001) 6 SCC 463

7. In Ravi Sharma v. State (Government of NCT of Delhi) and

another 1, the Hon’ble Supreme Court held that while dealing with an

appeal against acquittal, the appellate court has to consider whether

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(2022) 8 Supreme Court Cases 536
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the trial Court’s view can be termed as a possible one, particularly

when evidence on record has been analysed. The reason is that an

order of acquittal adds up to the presumption of innocence in favour

of the accused. Thus, the appellate court has to be relatively slow in

reversing the order of the trial court rendering acquittal.

8. In Ghurey Lal v. State of Uttar Pradesh 2 the Hon’ble

Supreme Court after referring to several Judgments regarding the

settled principles of law and the powers of appellate Court in

reversing the order of acquittal, held at para 70, as follows:

“70. In the light of the above, the High Court and other appellate
Courts should follow the well-settled principles crystallized by number of
Judgments if it is going to overrule or otherwise disturb the trial court’s
acquittal:

1. The appellate court may only overrule or otherwise disturb the
trial court’s acquittal if it has “very substantial and compelling reasons”

for doing so.

A number of instances arise in which the appellate court would
have “very substantial and compelling reasons” to discard the trial
court’s decision. “Very substantial and compelling reasons” exist when:

i) The trial court’s conclusion with regard to the facts is palpably
wrong:

ii) The trial court’s decision was based on an erroneous view of
law;

iii) The trial court’s judgment is likely to result in “grave miscarriage
of justice”;

iv) The entire approach of the trial court in dealing with the evidence
was patently illegal;

v) The trial court’s judgment was manifestly unjust and
unreasonable;

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(2008) 10 Supreme Court Cases 450
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vi) The trial court has ignored the evidence or misread the material
evidence or has ignored material documents like dying
declarations/report of the ballistic Ex.Pert, etc.

vii) This list is intended to be illustrative, not exhaustive.

2. The appellate court must always give proper weight and
consideration o the findings of the trial court.

3. If two reasonable views can be reached__ one that leads to
acquittal, the other to conviction __the High Courts/appellate courts must
rule in favour of the accused.”

9. Having gone through the record, the defence of the accused

initially, as mentioned in notice is that cheques were missing.

Accused also denied signature on the cheque in the legal notice

Ex.P5. However, during the course of trial, defence taken was totally

contrary to the earlier version. During trial accused’s defence was

that the cheque was given to Raghunath Rao (D.W.3), who is the

father-in-law of the complainant and the same was misused by the

complainant. The accused filed a petition to summon Raghunath Rao

for the purpose of proving his hand writing in the documents filed

under Ex.D9 to show that the amount was received from D.W.3.

D.W.3 in his examination in chief after being summoned by the

accused stated that he did not sign on Ex.D9 and denied that loan

was given by him to the accused, for which reason, cheque in

question was taken as security cheque. Though the defence taken by

the accused in the trial was negatived by the evidence of D.W.3, who
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was summoned at the instance of the accused, however, D.W.3 was

not declared hostile nor cross-examined by the accused.

10. Admittedly, when it was the case of the accused that the

signatures on the cheques were not that of his as claimed in the

reply notice and that Ex.D9 was executed by D.W.3, steps should

have been taken by the accused to send the documents for the

purpose of hand writing examination. The version given by D.W.3

falsifies the defence of the accused.

11. Learned Sessions Judge committed an error in not considering

the said facts and recording acquittal on the basis of the evidence of

P.W.1 that he did not file the income tax returns and that P.W.1 gave

two versions regarding handing over the money. P.W.1 stated that

the amount was given at once in complaint and legal notice and

during cross-examination he stated that he had given in two

installments. The said discrepancy is inconsequential and will not

demolish the case of complainant. The entire facts of case have to be

taken into consideration by the Court and cannot selectively ignore

crucial facts. The findings of the learned Sessions Judge are not

based on totality of the circumstances. No reasons are given by the

Sessions Judge to disregard the evidence of DW.3 or the
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contradictory defence taken. The defence of theft denying the

signatures was initial defence. Later accused admitted the signatures

on the cheque but stated that it was given to DW.3 which was not

proved.

12. In view of the above discussion, the appeal deserves to be

allowed. The order of the learned Sessions Judge acquitting the

accused is hereby set aside. The accused is convicted under Section

138 of the Negotiable Instruments Act and directed to pay fine of

Rs.8.00 lakhs which shall be given to the complainant as

compensation. The said amount shall be deposited before the trial

Court within a period of eight weeks from the date of receipt of this

order. Failure to deposit the amount within the time stipulated, the

accused shall undergo default sentence of six months simple

imprisonment.

13. Accordingly, Criminal Appeal is allowed.

___________________
K.SURENDER, J
Date: 24.01.2025
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THE HONOURABLE SRI JUSTICE K.SURENDER

CRIMINAL APPEAL No.1069 OF 2012
Date: 24.01.2025

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