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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 16TH DAY OF MARCH, 2018

BEFORE

THE HON’BLE MR.JUSTICE K.SOMASHEKAR

CRIMINAL APPEAL NO. 302 OF 2010

BETWEEN

K.N. RAJU,
S/O NANJAREDDY,
AGED ABOUT 51 YEARS,
RESIDING AT NO. 1462,
SOUTH END A CROSS,
JAYANAGAR 9TH BLOCK,
BENGALURU – 560 069.
... APPELLANT

(BY SRI. K.H. RAMESH, ADVOCATE (ABSENT))

AND

MANJUNATH T.V.,
S/O VEERANNA,
AGED ABOUT 51 YEARS,
NO. 48, BANGARAPPA LAYOUT,
SUBRAMANYAPURAM POST,
UTTARAHALLI HOBLI,
BENGALURU – 560 061.
... RESPONDENT

(BY SRI. K.G. SUDHAKAR, ADVOCATE)

THIS CRL.A. IS FILED UNDER SECTION 378(4)

CR.P.C PRAYING TO SET ASIDE THE JUDGMENT OF
ACQUITTAL DATED 17.12.2009 PASSED BY THE
LEARNED 16TH ADDITIONAL CHIEF METROPOLITAN
MAGISTRATE BENGALURU IN C.C.NO. 23063/2008 –
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ACQUITTING THE RESPONDENT/ACCUSED FOR THE

OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.
ACT AND CONSEQUENTLY CONVICTING THE
RESPONDENT/ACCUSED.

THIS CRIMINAL APPEAL HAVING BEEN HEARD AND

RESERVED FOR JUDGMENT ON 13.03.2018 COMING ON
FOR PRONOUNCEMENT THIS DAY, THE COURT
DELIVERED THE FOLLOWING:

JUDGMENT

This appeal is directed against the judgment of

acquittal dated 17.12.2009 passed by the XVI Addl. Chief

Metropolitan Magistrate, Bangalore City in

C.C.No.23063/2008 acquitting the accused for the offence

punishable under Section 138 of the Negotiable

Instruments Act, 1881 (hereinafter referred to as ‘the NI

Act’, for brevity). The same is challenged in this appeal

urging various grounds.

2. Heard the arguments advanced by the learned

counsel for the respondent/accused in this appeal.

Learned counsel for the appellant has not advanced any

arguments and he was not present though the case was

called several times.

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3. The factual matrix of the appeal are as under:

The complainant is known to the accused as a family

friend. The accused is running a travel agency business in

Gandhinagar area and in the month of October 2004 the

accused has approached the complainant and requested

him to give hand loan of Rs.70,000/- to meet his domestic

problems and family commitments and also to invest some

amount in the business. The complainant on considering

the request of the accused, gave an amount of Rs.70,000/-

by way of cash to the accused on 29.10.2004. While

receiving the said loan amount, the accused has also

executed Loan agreement and he did give three cheques in

favour of the complainant. The accused also promised the

complainant that he would return the loan amount during

the month of April 2008. As per the request made by the

accused, the complainant presented the cheques for

encashment. But the cheques in question were

dishonoured with an endorsement Drawee signature

differs/incomplete and insufficient funds. Subsequently,

the complainant got issued a legal notice to the accused

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both under RPAD and under UCP. The notice sent to the

accused by RPAD returned with an postal acknowledgment

“No such person in the address”. But however, the notice

sent through UCP was served on the accused. Despite

receipt of legal notice, the accused neither replied nor paid

any amount towards the amount mentioned in the

aforesaid cheques in question. Hence, the complainant

filed the complaint before the court below alleging that the

accused has committed the offence punishable under

Section 138 of the NI Act and to prosecute the case against

the accused.

4. Upon initiation of proceedings, the Trial Court

took cognizance of the offence under Section 190 of Cr.P.C.

and summons was issued to the accused. On service of

summons the accused had put his appearance before the

Trial Court through his counsel and participated in the

proceedings. The copies of the prosecution papers were

furnished to the accused and plea was recorded. The

accusation was read over to the accused, to which he

pleaded not guilty and claimed to be tried.

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5. Subsequently, in order to substantiate his

contentions, the complainant examined himself as PW.1

and got marked 13 documents as per Ex.p1 to p13. Even

Ex.P2(a), p3(a) and p4(a) were marked. On the defense

part, the accused had examined himself as DW.1 and did

not produce any documentary evidence. The statement

under of the accused under Section 313 of Cr.P.C. was

recorded. Subsequently, the Trial Court, on hearing the

arguments advanced by the learned counsel for both the

parties, had framed the points that arose for its

consideration and answered point No.1 in the negative and

point No.2 as per the final order and thereby acquitted the

accused. It is this acquittal judgment which is called in

question in the present appeal.

6. Heard the learned counsel for the

respondent/accused.

7. Ex.P1 is the original complaint. Ex.P2 is the

cheque bearing No.644021 dated 28.5.2008 for a sum of

Rs.20,000/-. Ex.P3 is the cheque bearing No.644026

dated 28.5.2008 for a sum of Rs.20,000/-. Ex.P4 is

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cheque bearing No.644027 dated 28.5.2008 for a sum of

Rs.20,000/-. Ex.P2 to P4 are drawn on Sree

Subramanyeswara Co-operative Bank Ltd., Rajatha

Bhavana, Padmanabhanagar Branch, Bangalore.

Complainant states that Ex.P2(a), P3(a) and P4(a) are the

signature of the accused. ExP2 to P4 supports the stand

taken by the complainant. Ex.P5 to P7 are the

endorsements issued by the banker showing that the

aforesaid three cheques were dishonoured on 29.8.2008

with an endorsement “Drawers signature

differs/incomplete and insufficient funds.

8. It is relevant to note that as per the provisions of

NI Act, the complainant was required to make a demand

for repayment of the loan amount within 30 days from the

date of receipt of cheque as unpaid. Ex.P8 to P10 show

that complainant has made a demand in writing, calling

upon the accused to make repayment of the said loan

amount by issuing notice dated 26.9.2008 which was

within 30 days from the date of receipt of cheque as

unpaid. Learned counsel for the respondent/accused

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vehemently contended that complainant had to file this

complaint on or after 15.10.2008 and on or before

15.11.2008. But the complaint was filed on 30.10.2008

and of course, the complaint was well within time.

9. Ex.P12 is loan agreement. It contains the

information that the accused and his wife and his son have

jointly borrowed Rs.70,000/- from the complainant and

inturn the accused and his family members issued the

above referred cheques in favour of the complainant. But

the amount mentioned in the aforesaid cheques, in all,

comes to Rs.60,000/-. Therefore, the cumulative effect of

these facts is that on the date of issuance of the cheques in

question there was legally recoverable debt, in fact, in

existence. Admittedly, Ex.P12 was executed on 29.10.2004

and the cheques in question bear the dates as 28.5.2008.

Learned counsel for the respondent/accused pointed out

that as on the date mentioned in the cheque the amount

alleged to have been borrowed by the accused under

Ex.P12 had already become time barred debt and hence, it

cannot be said that as on the date the cheque bear, there

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was a legally enforceable debt was in existence and hence,

the complaint filed by the complainant needs to be

dismissed.

10. On perusal of Ex.P12 it could be noticed that

Ex.P12 stipulates 11 months for recovery of loan amounts.

Considering the 11 months time as well as the assurance

given by the accused in May 2008, the transaction was

legal and there existed a recoverable debt. Therefore, the

contention of the accused that the claim of the

complainant is the time barred debt cannot be accepted.

Hence, the Trial court observed that in Ex.P12 it is recited

or stipulated that 11 months time has been given to the

accused to pay the said amount.

11. Article 21 of the Indian Limitation Act, the

period of limitation for recovery of loan amount starts from

the date on which the amount has been paid. Further, as

per Section 18 of the Limitation Act, a fresh period of

limitation shall be computed if any acknowledgement of

debt has been executed by the borrower within the

prescribed period of limitation i.e., within three years from

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the date of borrowing of the loan. Further Section 19 of

the Limitation Act makes it clear that a fresh period of

limitation shall be computed from the date of payment of

some money towards the loan in question. Therefore, it is

relevant to extract Sections 18 and 19 of the Limitation Act

for the purpose of deciding the issues under Section 138 of

N.I. Act.

Section 18

18. Effect of acknowledgment in writing.—

(1) Where, before the expiration of the prescribed
period for a suit of application in respect of any
property or right, an acknowledgment of liability in
respect of such property or right has been made in
writing signed by the party against whom such
property or right is claimed, or by any person
through whom he derives his title or liability, a fresh
period of limitation shall be computed from the time
when the acknowledgment was so signed.
(2) Where the writing containing the
acknowledgment is undated, oral evidence may be
given of the time when it was signed; but subject to
the provisions of the Indian Evidence Act, 1872 (1 of
1872), oral evidence of its contents shall not be
received.
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Explanation.—For the purposes of this section,—

(a) an acknowledgment may be sufficient though it
omits to specify the exact nature of the property or
right, or avers that the time for payment, delivery,
performance or enjoyment has not yet come or is
accompanied by a refusal to pay, deliver, perform or
permit to enjoy, or is coupled with a claim to set-off,
or is addressed to a person other than a person
entitled to the property or right;
(b) the word “signed” means signed either
personally or by an agent duly authorised in this
behalf; and
(c) an application for the execution of a decree or
order shall not be deemed to be an application in
respect of any property or right.

Section 19

19. Effect of payment on account of debt or of

interest on legacy.—Where payment on account of a
debt or of interest on a legacy is made before the
expiration of the prescribed period by the person
liable to pay the debt or legacy or by his agent duly
authorised in this behalf, a fresh period of limitation
shall be computed from the time when the payment
was made:
Provided that, save in the case of payment of
interest made before the 1st day of January, 1928,
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an acknowledgment of the payment appears in the

handwriting of, or in a writing signed by, the person
making the payment.
" Explanation.—For the purposes of this
section,— "
(a) where mortgaged land is in the possession of the
mortgagee, the receipt of the rent or produce of such
land shall be deemed to be a payment;
(b) “debt” does not include money payable under a
decree or order of a court."

12. In the context of limitation point the Trial Court

observed in the impugned judgment that it is not the case

of the complainant that the accused has paid some

amount towards the repayment of the amount mentioned

in the cheques in question. In that view it was held that

the loan in question cannot be considered as a time barred

debt.

13. In so far as bouncing of cheques relating to

initiation of the proceedings as under Section 200 Cr.P.C.

punishable under Section 138 of NI Act that the limitation

point is to be taken into consideration and so also the

contention urged by the complainant. In the instant case,

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it should be noted that the complainant who examined

himself as PW.1 specifically and categorically has admitted

himself in his cross examination that the accused had

given the undated cheques, and the validity of the loan

agreement entered into between complainant and accused

had lapsed which was for a period of three years. The

complainant has categorically admitted that after the

expiry of the loan agreement, he had presented the

cheques mentioning the dates and upon bouncing of them

had initiated the proceedings against the accused under

Section 138 of NI Act. Therefore, on a careful reading of the

said admission of PW.1 it makes it clear that when the

cheques in question were issued by the accused the

cheques were undated. Further according to the complaint

himself the cheques in question have been issued to him

on the date of execution of the agreement as per Ex.P12.

Even this fact is mentioned in Ex.P12 which was executed

on 29.10.2004. Therefore, these facts make it clear that

the cheques in question have been presented for

encashment after three years ten months from the date of

issuance. Therefore, the question would be whether the

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facts and circumstances of this case fall within the ambit

of Section 138 of NI Act. The Trial Court in this regard

cited a decision reported in ILR 2007 Karnataka 1708

between Vishnudas Vs. Vijaya Mahantesh wherein this

Court has held as under:

“NI Act 1881 Section 138 – Offence under –

Acquittal – Appealed against the issue of cheque
without mentioning the date-Admission of Pw.1 in
the cross examination that there was no debt as on
the date of issue of cheque. On facts, held that on
the date of handing over the cheque, there was no
debt due to be paid by the respondent and wherefore
the cheque was not issued towards discharge of any
debt. The facts elicited in the cross examination of
Pw.1 that the cheque was undated on the date of its
issue and the same was presented for payment after
6 months from the date of issue. The order of
acquittal is justified.”

The ratio laid down in the said decision squarely

applies to the facts and circumstances of the present case

and so also the initiation of the proceedings for the offence

punishable under Section 138 of the NI Act against the

accused.
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14. Whereas in this appeal, though several

opportunities were provided to the appellant, he has not

come forward to address the arguments. Therefore having

regard to the facts and circumstances contained in this

appeal which is filed against the impugned judgment of

acquittal passed by the Trial Court in C.C.No.23063/2008

it is relevant to note the admission made by the Pw.1 in his

cross-examination who specifically and categorically

admits that when the cheques in question were issued by

the accused, the cheques were undated and he further

admits that the cheques in question have been issued to

him on the date of execution of the loan agreement as per

Ex.P12 i.e., on 29.10.2004. Further the cheques in

question have been presented for encashment on

29.8.2008. Therefore, these facts make it clear that

cheques in question have been presented for encashment

after three years ten months from the date of issuance of

the same. Therefore, the Trial Court has rightly held that

the materials made available on record are not sufficient to

conclude that the accused has committed the offence

punishable under Section 138 of the NI Act.

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15. The facts and circumstances of this case are

identical to the decision stated supra and it is squarely

applicable to the case on hand. In the aforesaid decision it

was held that when the cheque was undated on the date of

its issue and the same was presented for payment after 6

months from the date of issue then the Court had no other

option but to acquit the accused. Keeping in view that

position of law, the Trial Court rightly held that the

complainant himself had admitted that the cheques in

question were issued on 29.10.2004 and at the time of

issuance the cheques were undated and the complainant

had presented the said cheques for encashment in the year

2008. The said finding of the Trial court in the facts and

circumstances of this case is just and proper and there is

no need for this court to interfere with the said finding.

16. For the above reasons, I find that there is no

infirmity in the judgment of acquittal rendered by the Trial

Court. Hence, I am of the opinion that there is no

necessity to revisit the impugned judgment. As the appeal

is devoid of merits, the same is dismissed. As a

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consequence, the judgment of acquittal dated 17.12.2009

passed by the XVI Addl. Chief Metropolitan Magistrate,

Bangalore City in C.C.No.23063/2008 acquitting the

respondent/accused for the offence punishable under

Section 138 of N.I. Act, is hereby confirmed.

Sd/-
JUDGE

DKB