IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20 TH DAY OF JANUARY 2015 BEFORE THE HON'BLE MR. JUSTICE BUDIHAL R.B.

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1 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU BETWEEN: DATED THIS THE 20 TH DAY OF JANUARY 2015 BEFORE THE HON'BLE MR. JUSTICE BUDIHAL R.B. M/S Baba Corporate Services Private Limited No.186/1, J.C. Complex, Annex. Sirur Park Road Seshadripuram Bangalore Registered Office at No.70, Bamana Jalahalli East Vidyaranyapuram Post Bangalore CRIMINAL APPEAL No.348/2013 C/W CRIMINAL APPEAL No.349/2013 Represented by its Manager and Power Of Attorney Holder Sri. H Puttasome Gowda. (By Sri. R S Ravi, Adv.).. COMMON APPELLANT AND: 1. Sri V Narayana Murthy Major S/o Sri Venkataswamappa

2 2 2. Smt. Rukmini Murthy N Major W/o. Sri V Narayana Murthy Both are R/at No th Main B.S.K. 2 nd Stage Bangalore RESPONDENTS IN CRL.A.348/2013 AND: 1. Smt. Rukmini Murthy N Major W/o. Sri V Narayana Murthy 2. Sri V Narayana Murthy Major S/o Sri Venkataswamappa Both are R/at No th Main B.S.K. 2 nd Stage Bangalore (By Sri. S K Venkatareddy, Adv. For R1 and R2)..RESPONDENTS IN CRL.A.349/2013 Criminal Appeal No.348/2013 and Criminal Appeal No.349/2013 are filed under Section 378(4) Cr.P.C. praying to set aside the order dated passed by the XVIII ACMM and XX ASCJ, Bangalore in C.C.No.31742/2006 and C.C.No.31741/2006 respectively acquitting the respondent /accused for the offence punishable under Section 138 of The Negotiable Instruments Act, These appeals having been heard and reserved for orders, coming on for pronouncement of judgment, this day, the Court delivered the following:

3 3 JUDGMENT Since common questions of law and facts are involved in these appeals and since the parties in both the appeals are also one and the same, they have been taken together, heard and disposed of by this common judgment. 2. These two criminal appeals are preferred by appellant-complainant being aggrieved by the judgment and order of acquittal dated passed by the XVIII ACMM and XX ASCJ, Bengaluru City, in C.C. Nos.31742/2006 and 31741/2006 respectively. 3. The appellant was the complainant and the respondents were the accused before the trial court. For the sake of convenience, the parties are referred to by their ranking before the trial court.

4 4 4. The case of the prosecution in brief presented before the trial court is that the appellant-complainant is a Non-Banking Finance Limited Corporation, registered under the provisions of the Reserve Bank of India and it is engaged in business of advancing loans. Respondent Nos.1 and 2- accused, in both the appeals, being husband and wife, had approached the complainant for financial assistance and borrowed loan by executing necessary documents promising to repay the loan amount along with interest. As agreed, the accused failed to repay the amount with interest. It is also the further case of the prosecution that in respect of C.C. No.31742/2006, the accused issued cheques bearing No dated for Rs.20,00,000/- and No dated for Rs.21,72,665/-. In respect of the case in C.C. No.31741/2006, the accused issued cheques bearing No dated for Rs.4,20,135/- and No dated for Rs.10,00,000/- and the said cheques had been drawn on ING Vysya Bank Limited, Jayanagar Bank Branch,

5 5 Bengaluru, in favour of the complainant for discharge of the debt amount. The said cheques were presented to the bank on for encashment through the complainant s banker at Karnataka Bank Limited, Nehru Nagar, Seshadripuram, Bengaluru. But the cheques were returned unpaid with an endorsement dated as funds insufficient. Thereafter, the complainant issued legal notice to the accused calling upon them to pay the amount within 15 days after receipt of the notice. Though the notice was served, the accused neither paid the amount nor replied to the legal notice. Hence, the complainant lodged the complaint before the trial court under Section 200 of Cr.P.C. for the offence under Section 138 of the Negotiable Instruments Act (for short the Act ). The trial court has, after considering the merits in both cases, acquitted accused Nos.1 and 2 for the offence under Section 138 of the Act. Being aggrieved by the said judgment and order, these two appeals are preferred by the appellant-complainant on the following grounds:

6 6 That, at page No.19 of the judgment, the court proceeded on the basis that O.S. No.6783/2007 is a suit for specific performance and the written statement produced at Ex.P.33 has no relevance to the case. This is a total mistaken notion inasmuch as O.S. No.6783/2007 was for repayment of the money advanced and it was with respect to the same transaction that the cheques had been issued and as such, the statement made therein was totally relevant to the case on hand and the observation that the said documents have no bearing upon the case is totally in ignorance of the fact of the case. In the written statement at Ex.P.29, the case pleaded by the accused was that no loan was given, whereas the contention put forward was that loan was repaid totally, which is contrary to the contentions in the written statement. The trial court is erred in holding that the trial court need not look into the matter on which the money was mobilized for the repayment of Rs.1.50 Crores. It has mistaken the argument to be that the court should look into the mode of mobilization. It was not the

7 7 argument of the complainant that the court should look into the mode of mobilization. On the contrary, the argument was that the accused did not have capacity to mobilize, they have not mobilized, they did not have the money and as such, the court should not have accepted the contention that they have repaid the money. The trial court has erred in not giving required importance for non production of income tax returns of the accused and not drawn the adverse inference as against them. The trial court has also erred in not giving much importance for non production of bank pass book or account sheets of the accused and in not drawing the adverse inference. It was not right in holding that signatures were not forged. It has acted on conjectures and surmises in regard to capacity of the accused for repayment of loan amount. The trial court has further erred in noting that the seals found in Exs.D.3 to D.11 were identical to the seals found in Exs.P.1 and 17 where there were admitted seals. It is also an error by the trial court in holding that Exs.D.3 to D.11 were the genuine documents and based on that, it has

8 8 wrongly come to the conclusion that the accused have paid Rs.1,96,36,860/-. It has further erred in holding that excess amount of Rs.31,95,610/- has been repaid. The trial court has erred in not making reference to Ex.P.25, which was an admitted document and Ex.P.24 wherein the signature of Narayana Murthy had not been denied. It has further erred in not noting the fact of the accused having taken DDs. in favour of the complainant for Rs.1.00 crore after the alleged date of repayment of the entire amount would show that the repayment of entire loan amount cannot be believed. Hence, sought to allow the appeals and to set aside the judgment and orders under appeals. 5. Heard the arguments of learned Counsel appearing for the appellant-complainant in respect of both appeals and also the arguments of learned counsel appearing for the respondents-accused.

9 9 6. Learned counsel appearing for the appellant, during the course of arguments submitted, that the documents at Exs.D.3 to D.11 are disputed and they are the forged receipts. Payment made under Exs.D.1 and 2 is wrongly interpreted by the trial court. When the legal notice was issued to the respondents-accused, no reply was sent by them. The learned counsel submitted that when the matter was posted for cross examination of the complainant, the accused had not taken contention in the cross examination regarding the repayment of amount or the receipts and it was only after remand of the matter, they had come up with the new defence. The learned counsel drew attention of this Court to the written statement filed in O.S. No.6783/2007 dated and submitted that, at one stretch, the accused had denied the very receipt of the loan from the complainant, and at another stretch, they took up the contention that they had already repaid the loan, which contention was self contradictory and accused were not permitted to approbate and reprobate. The learned Counsel

10 10 further submitted that the trial court, taking the risk of comparing the signature on Exs.D.3 to D.11, has wrongly come to the conclusion that they were the signature of Sri. Narayana, the Managing Director of the appellant-company. The trial court ought to have referred the said receipts for opinion of the hand writing expert. Regarding the alleged payment under Exs.D.3 to D.11, the trial court has failed to take into account that the accused have not produced the income tax returns to show payment nor have they produced the bank pass books or the statement of account extract form the concerned bank. It is the further contention of the learned Counsel that even though the last payment was made on , but subsequent to that, it was the case of the accused that they purchased ten DDs, each for Rs lakh, totaling to Rs.1.00 crore, and wanted to give it to the Managing Director-Narayana. When according to accused, the entire payment was already made, what was the need for them to take the DDs for the sum of Rs.1.00 crore. Accused have not discharged their liability and these aspects were not

11 11 properly considered and appreciated by the trial court. The learned Counsel further submitted that when the accused have admitted borrowing of loan and issuance of the cheques, initial presumption under Sections 118(a) and 139 of the Act ought to have been raised in favour of the complainant. No specific suggestion was put to P.W.1 in the cross examination about the receipts Exs.D.3 to D.11 and even there is no finding of the trial court in this regard. So far as the interest and rate of interest to be charged, the restriction is made applicable only in civil cases and not in criminal cases filed under Section 138 of the Act. Hence, the learned counsel submitted that the judgment and orders of the trial court are illegal, perverse and capricious and same are to be set aside. In support of his contention, the learned counsel has relied upon the following decisions: 1. AIR 1979 SC 14 (The State (Delhi Administration) Vs. Pali Ram) 2. AIR 1996 SCW 685 (O. Bharathan Vs. K Sudhakaran)

12 12 3. AIR 1956 SC 593 (Nagubhai Ammal and others Vs. B. Shama Rao and others ) 4. AIR 2002 SC 3014 (I.C.D.S. Ltd. Vs. Beena Shabeer & Another.) 5. JT 2009 (13) SC 44 (Vishnu Dutt Sharma Vs. Daya Sapra(Smt) 6. AIR (36) 1949 Bombay 257 (Tarmahomed Haji Abdul Rehman Vs. Tyeb Ebrahim Bharamchari) 7. AIR 2002 SC 182 (M/s MMTC Ltd. And another Vs. M/s Medchl Chemicals and Pharma (P) Ltd. And another) 8. AIR 2001 SC 2895 (K N Beena Vs. Muniyappan and Another) 7. Per contra, learned counsel appearing for the respondents-accused submitted that there were three loan transactions, one for Rs lakh as per loan application- Ex.P.14, second loan was for Rs lakh and there is a confirmation letter by the accused to complainant as per Ex.P.15 in respect of the said loan. The third loan was for Rs lakh under the loan application-ex.p.17. He submitted that at the time of advancing the aforesaid loan, the complainant obtained a signed blank cheque as security.

13 13 Since the determination of amount of enforceable debt was not specifically pleaded in the complaint or in the notice, the complainant made a vague claim against the respondentsaccused. Until and unless, there is a specific determined recoverable debt made out by the complainant, it cannot be said that the complainant has proved its case. The learned Counsel further submitted that regarding the rate of interest, the complainant has charged the interest at 30% p.a., which is against the provisions of the Money Lending Act and also against the notification issued by the Government of Karnataka dated The permissible rate of interest is 14% p.a. in case of secured loan and 16% p.a. in case of unsecured loan. In the loan application, there is no mention about the rate of interest, in the mortgage deed at Ex.P.13, there is no mention about the rate of interest. It is only in the promissory note, the interest is mentioned as 30% p.a. The learned Counsel further submitted that the cheques were not issued in discharge of the determined recoverable debt. Regarding the contention of learned

14 14 counsel for the appellant that at the earlier stage when the accused was cross examined before the trial court, there was total denial of availing loan from the complainant, but at the subsequent stage that too when the matter was remanded back from this Court, totally a new case was set up that the loan has been paid as per the receipts at Exs.D.3 to D.11, the learned Counsel submitted that in the remand order passed by this Court dated in criminal revision petition No.948/2010, it is a specific contention of the accused-respondents herein that their counsel had not conducted the case properly nor put forth their defence and the same was accepted by this Court and therefore, this Court, remanded the matter for fresh disposal and hence, in view of the finding of this Court, the complainant cannot make much about the same. It is also the contention of the learned Counsel that the Managing Director of the complainant has not at all entered into the witness box and he has executed power of attorney in favour of P.W.1, who cannot depose about the acts, which were done by the

15 15 Managing Director-Narayana earlier to the execution of the power of attorney, and also about the facts which are within the knowledge of the Managing Director. This aspect has been completely ignored by the trial court while deciding the case. It is further submitted that when it is the case of the accused that they have made payment as per Exs.D.3 to D.11, the Managing Director-Narayana, ought to have personally appeared before the Court to say about the receipts whether they were issued by him or not. To be fair on their part, the accused filed an application before the trial court making request that the receipts at Exs.D.3 to D.11 be referred to the experts opinion, but the said application was rejected by the trial court. Comparing the signature on the receipts invoking Section 73 of the Evidence Act, the trial court, ultimately, came to the conclusion that the receipts were issued by the Managing Director-Narayana and held that the entire loan amount has been repaid. Hence, it is submitted that initial presumption in favour of the complainant has been rebutted by the accused by placing

16 16 cogent and acceptable materials. The contents of the complaint are not at all proved by the complainant. The learned counsel further submitted that the purchase of two DDs, subsequent to the payment of entire amount, under the receipts, was only on the safer side. Because of purchase of DDs subsequent to the payment, the entire defence of the accused cannot be rejected or brushed aside. The learned Counsel further submitted that though there is a specific contention raised by the respondents accused with regard to the charging of interest at 30% per annum, which is illegal, the trial court has not at all answered about the same in its judgment. The learned counsel lastly submitted that the complainant has utterly failed to prove its case with satisfactory materials and the trial court has rightly dismissed the complaint acquitting the respondentsaccused. There is no merit in the appeals and the same may be dismissed. In support of his contentions, the learned counsel has relied upon the following decisions:

17 17 1. (2005) 2 SCC 217 (Janki Vashdeo Bhojwani and another Vs. Indusind Bank Ltd. And Others) 2. (2013) 12 SCC 64 (S Kesari Hanuman Goud Vs. Anjum Jehan and Others) 3. (2014) Cri.L.J. 576 (A.C. Narayanan Vs. State of Maharashtra and another) 8. I have perused the pleadings of the parties presented before the trial court, oral and documentary evidence and perused the judgment and order dated passed by the trial court in both the criminal cases as also the decisions relied upon by the learned Counsel on both sides in the instant appeals. 9. The first and foremost contention of the respondents accused is that the Managing Director of the appellant company Sri. Nayaran, who entered into loan transaction, was knowing about the said transaction and he is having the personal knowledge about the same and P.W.1, the power of attorney holder, is not competent to give

18 18 evidence before the Court speaking about the loan transaction. It is the further contention of the respondents accused that P.W.1 is not having personal knowledge about the transaction between Narayan and the respondents accused. In this connection, before the trial court, the respondents herein relied upon the decision of the Hon ble Supreme Court in case of JANKI VASHDEO BHOJWANI VS. INDUSIND BANK LIMITED reported in (2005) 2 SCC 217 and the appellant herein relied upon the decision in case of A. SATHYANARAYANA VS. SELVAM reported in 2008 (5) KLJ 622. After assessing these two decisions, ultimately, the trial court came to the conclusion that there is no bar for P.W.1 filing a case on behalf of the appellant company and giving evidence in its favour. 10. Let me examine the evidence of P.W.1 deposed before the trial court to know whether he was having personal knowledge about the loan transaction between the Managing Director Sri. Narayan and the respondents. In the

19 19 cross examination, P.W.1 has deposed that the financial transaction and the accounts in respect of both transactions of the complainant, it is C.M. Narayan, who was looking after the same. The day-to-day computer entries used to be made by one Venkatesh. In the recovery of loan section, one Raghu and Raju were working. Up to Rs lakh loan transaction, the Managing Director C.M. Narayan, used to attend. If the loan amount is more than Rs lakh, all the Directors of the company and also the Company Secretary, after having the discussion, would take decision in the matter. He has further deposed that he is not participating in the said process. He has further deposed that he is not having knowledge that from which account to which account, the amount shown in Exs.D.1 to D.3 has been transferred. He has further deposed that he does not know about the transaction of these cases took place between the accused Narayana Murthy and the appellant company. Thus, this portion of oral evidence of P.W.1 makes

20 20 it clear that he was not having any knowledge about the transactions in question in respect of these two cases. 11. In the decision relied upon by learned counsel for the respondents in Janki Vashdeo Bhojwani s case, cited supra, their Lordships of the Hon ble Supreme Court have laid down the following proposition: A. Civil procedure Code, 1908 Or. 3 Rr.1 and 2, Or.18 Rr. 4 and 19, Or. 10 R.4, Or. 11 R. 1 and Or. 26 Power of power-of-attorney holder to act on behalf of principal Word acts in or. 3 Rr. 1 and 2 Scope Power to depose on behalf of principal Scope Power to depose in place of principal, held, extends only to depositions in respect of acts done by power-of-attorney holder in exercise of power granted by the instrument power-of-attorney holder in exercise of power granted by the instrument Term acts would not include deposing in place of and instead of the principal for acts done by principal and not by power-ofattorney holder Similarly power-of-attorney

21 21 holder cannot depose for principal in respect of matters of which only principal is liable to be cross-examined If principal is unable to appear in a court, a commission for recording his evidence may be issued Auction of attached property and recovery of debt Determination of concerned, extent of their share therein, independent source of income if any and that their share was purchased from such independent income placed on appellants on remand by Supreme Court in Janki Vashdeo Bhojwani ( I ). (2004) 3 SCC 584 Therefore, held, it was obligatory for them to have entered the witness box and discharged the burden by themselves Questions on remand above could only have been answered by appellants themselves and not by a mere holder of power of attorney from them Power of attorney does not have personal knowledge of these matters of the appellants and therefore he can neither depose on his personal knowledge nor can he be crossexamined on such facts Hence appellants failed to establish that they had any independent source of income and contributed therefrom for the purchase of their share in the

22 22 property This being the core question, appeal liable to be dismissed However, even on an appraisal of the documentary evidence on record by the Supreme Court, it is seen that there is no proof that the source of purchase of the purported is seen that there is no proof that ;the source of purchase of the purported share of the appellants in the property is from the independent income of the appellants Further held, appellants have not approached the Court with clean hands From the conduct of the parties it is apparent that the litigation has been a ploy to salvage the property from sale in execution of the decree Hence appeals dismissed with costs Civil Suit Conduct of parties Held, is material Supreme Court Rules, 1966 Or.41 R.1 Debt and Financial Laws Debt Recovery Tribunal Debt and Financial laws Recovery of Debts Due to Banks and Financial Institutions Act, Laws Recovery of Debts Due to Banks and Financial Institutions Act, 1993 S.25(a).

23 I have also perused the decision relied upon by the learned Counsel appearing for the appellant in A. Sathyanarayana s case, cited supra, wherein this Court has laid down the proposition as under: Section 142(a) of the Negotiable Instruments Act does not insist upon complaint being signed by the very complainant himself. There can be no bar for complaint being filed by power of attorney holder and to give evidence on behalf of the complainant. 13. As I have observed above, looking to the oral evidence of P.W.1, he was not having the personal knowledge about the loan transaction between the appellant company and the respondents-accused. When that is so, he cannot be the competent person to give evidence on behalf of the appellant company before the trial court. Even perusing the decision of the Hon ble Supreme Court, it clearly shows that the power of attorney holder can speak on behalf of his

24 24 principal, the executant of the power of attorney, about the acts done after the execution of the power of attorney but not about the acts, which took place earlier to the execution of power of attorney about which it is the executant who is having the personal knowledge can himself depose. Therefore, the view taken by the trial court, relying upon the decision of this Court that there is no bar for the power of attorney holder to give evidence on behalf of the complainant, is not correct. It is the case of the respondents accused that they have also made the cash payment to the tune of Rs.1,50,00,000/- to Narayan, the Managing Director of the appellant-company and that, the said Narayan issued the receipts as per Exs.D.3 to D.11. So even to speak with regard to the receipts at Exs.D.3 to D.11, it is Narayan, the Managing Director of the appellantcompany, is competent to speak about the receipts. Hence, the view taken by the trial court that P.W.1 is competent to give evidence on behalf of the complainant is not in accordance with law. It is no doubt true that under the

25 25 power of attorney, P.W.1 can sign the pleadings, file a complaint before the court. But so far as giving the evidence before the Court is concerned, P.W.1 cannot be considered to be the competent person. Hence, the view taken by the trial court and the interpretation of the decisions relied in the case is not proper and it is incorrect. 14. It is the contention of the respondents-accused that they have repaid the loan amount by issuing the cheques and also by making cash payment of Rs.1,50,00,000/- to Narayan, the Managing Director of the appellant company, and in turn, Narayan, putting his signature, issued the receipts at Exs.D.3 to D.11 acknowledging the receipt of the same. It is no doubt true that, to show their bona fide, the respondents-accused filed an application before the trial court for referring the case to the handwriting expert to compare the signatures on Exs.D.3 to D.11 with the admitted signatures of Narayan, which signatures were available on the other documents produced

26 26 in the case. But, the trial court, instead of referring the matter to the opinion of handwriting expert to ascertain the same, had itself taken initiative to compare the signatures on Exs.D.3 to D.11 with the other admitted signatures of Narayan invoking Section 73 of the Indian Evidence Act. 15. Section 73 of the Evidence Act reads as under: 73. Comparison of signature, writing or seal with others admitted or proved.-in order to ascertain whether a signature, writing or seal is that of the person by whom it purports to have been written or made, any signature, writing, or seal admitted or proved to the satisfaction of the Court to have been written or made by that person may be compared with the one which is to be proved, although that signature, writing, or seal has not been produced or proved for any other purpose. The Court may direct any person present in Court to write any words or figures for the purpose of enabling the Court to compare the words or figures so written with any words or figures alleged to have been written by such person.

27 27 {This Section applies also, with any necessary modifications, to finger-impressions.) According to Section 73, the Court can compare the signature, writing or seal with others admitted or proved. 16. Learned counsel appearing for the appellant herein relied upon the decision of the Hon ble Supreme Court rendered in Crl.A. No.336/1976 decided on in case of the State (Delhi Administration) Vs. Pali Ram. Para Nos.26, 27 and 30 of the said judgment reads as under: 26. Section 73 is therefore to be read as a whole, in the light of Section 45. Thus read, it is clear that a Court holding an inquiry under the CrPC in respect of an offence triable by itself or by the Court of Session, does not exceed its powers under Section 73 if, in the interests of justice, it directs an accused person appearing before it, to give his sample writing to enabling the same to be compared by a

28 28 handwriting expert chosen or approved by the Court, irrespective of whether his name was suggested by the prosecution or the defence, because even in adopting this compare the disputed writing with his (accused s) admitted writing, and to reach its own conclusion with the assistance of the expert. 27. In the instant case, the Magistrate, as the extract form his Order dated May 20, 1972, shows after considering the peculiar circumstances of the case, and recalling the observation of the Calcutta High Court in Him Lal Agarwalla vs. State (ibid) to the effect that Section 73 entitled the court to assist itself for a proper conclusion in the interest of justice, expressly applied this test to the present case. The peculiar circumstances which weighed with the Magistrate in directing the accused sample writing to be compared, in the first instance, by the Government Expert of Questioned Documents, included the contumacious conduct of the accused and the resiling of the material witness, Tek Chand, which, according to Mr. Marwah, was possibly due to his having been

29 29 suborned or won over by the accused. It was apparent from the record that the accused was playing hide and seek with the process of law and was avoiding to appear and give his sample writing to the police. The Magistrate therefore, had good reason to hold that the assistance of the Government Expert of Questioned Documents was essential in the interest of justice to enable the magistrate to compare the sample and the question writings with the expert assistance so obtained and then to reach a just and correct conclusion about their identity. Although the order of the Magistrate is somewhat inartistically worded, its substance was clear that although initially, the specimen writing sought from the accused was to be used for comparison by the Government expert, the ultimate purpose was to enable the Court to compare that specimen writing with the disputed one, Ex. PW. 21F, to reach a just decision. 30. The matter can be viewed from another angle, also. Although there is no legal bar to the Judge using his own eyes to compare

30 30 the disputed writing with the admitted writing, even without the aid of the evidence of any handwriting expert, the Judge should, as a matter of prudence and caution, hesitate to base his finding with regard to the identity of a handwriting which forms the sheet-anchor of the prosecution case against a person accused of an offence solely on comparison made by himself. It is, therefore, not advisable that a Judge should take upon himself the task of comparing the admitted writing with the disputed one to find out whether the two agree with each other; and the prudent course is to obtain the opinion and assistance of an expert. 17. Therefore, looking to the aforesaid decision of the Hon ble Supreme Court and as the guilt of the accused also depends on the proof of the receipts at Exs.D.3 to D.11, rejection of the application, for referring the matter to the handwriting expert to compare the signature, by the trial court was not correct and the trial court ought to have referred the receipts to the hand writing expert to obtain

31 31 report in that regard and if necessary, ought to have summoned the hand writing expert to give his evidence in the case, which course has not been adopted by the trial court in this case. 18. It is also the contention of the respondentsaccused that there is no determined recoverable debt. Neither in the complaint filed under Section 200 Cr.P.C. nor in the legal notice issued prior to the filing of the complaint before the magistrate court, there is no mention about the determined recoverable debt. Hence, it is their contention that if the recoverable debt is not determined, one cannot say that the accused have committed the offence under section 138 of the Act. Further, it is the contention of the respondents-accused that the appellant company was registered under the provisions of the Reserve Bank of India Act and in case of secured loan, it has to charge interest at the rate of 14% p.a. and in case of unsecured loan, it is at 16% p.a. The claim of the appellant company that

32 32 respondents accused had agreed to avail the loan amount at the rate of 30% p.a. is against the provisions of Sections 28 and 29 of the Karnataka Money Lenders Act so also to the provisions of RBI Act. The further contention of the respondents accused is that when they have made the payment by cheques and by cash, the appellant-company has to first appropriate the amount paid towards loan and calculate the interest thereon and find out as to what is the principal amount due and then only, it can ascertain as to what is the due amount determined to be recoverable from the respondents accused. I have perused the notification dated issued from the Government of Karnataka, wherein it is stated that in exercise of the powers conferred under Sub-section (1) of Section 28 of the Karnataka Money Lenders Act, 1961 (Karnataka Act No.12/1961) and in suppression, all previous orders or notifications in this regard, the Government of Karnataka hereby fixed the following maximum rates of interest in respect of the secured

33 33 and unsecured loans for all classes of business of money lending: (i) Secured loan 14% p.a. (ii) Unsecured loan 16% p.a. 19. Prima facie, the notification dated goes to show that the interest restriction is also not followed by the appellant company and there is no calculation sheet according to the said rates to know the recoverable debt amount due from the respondents-accused. The trial court has not made efforts to ascertain these things and without giving its finding on this aspect, has proceeded to dismiss the complaint and acquitted the respondents-accused from the case. 20. Since the money involved in the present cases is crores of rupees and when all the above legal and factual aspects have not been correctly appreciated by the trial court, to do substantial justice to the parties on both sides, I

34 34 feel that it is necessary to set aside the judgment and orders of the trial court and to remand the matters to it for fresh disposal. As observed above, the trial court has to refer the receipts at Exs.D.3 to D.11 for expert s opinion for comparison with the admitted seals and signatures of Narayan, the Managing Director of the appellant-company, on the documents produced before the court to get the report and if necessary, even to summon the expert to give his evidence before the court and then to decide the matter after giving opportunity to both sides to adduce their additional evidence if any. 21. Accordingly, both the appeals are allowed. The judgment and orders under appeals are set aside and the matters are remanded back to the trial court for disposal afresh in accordance with law. Cs/- Sd/- JUDGE