IMPORTANT POINT
Section 139 raises initial presumption about legally enforceable debt or liability in favour of complainant. The burden to rebut the same then shifts to the accused.

JUDGMENT

Pinaki Chandra Ghose, J.

1. Leave granted.

2. This appeal, by special leave, arises from the judgment and order dated 22-07-2011 passed by the High Court of Karnataka in Criminal Revision Petition No.263/2011 by which the High Court set aside the judgments of the two Courts below and acquitted the respondent herein.

3. The genesis of the litigation in the present case is that a complaint under Section 138 of the Negotiable Instruments Act, 1881 was filed by the complainant before the XII Magistrate, Bangalore. The learned Magistrate had, after trial, found the defendant guilty and sentenced her to pay Rs.5,55,000/-and in default of payment of the said amount, to undergo simple imprisonment for a period of five months. This order of the learned Magistrate was challenged in the appeal before the Fast Track Court, Bangalore, but the same was dismissed by the Fast Track Court. The defendant preferred a revision of the Fast Track Court's order before the High Court, being Criminal Revision Petition No.263/2011.

4. The case of the complainant is that he is the owner of the Ullas Theatre situated at Yashwantpur, Bangalore, while the defendant is the distributor of films. The two parties had a business relationship whereunder the defendant provided movies to the complainant for screening at his Theatre. In May 2006, the defendant sought a loan of Rupees Five Lakhs from the complainant for supporting the making of a Tamil movie “Pokari”. The said loan was advanced by the complainant on 20-05-2006. The defendant had promised to repay the loan on release of the said movie. However, the defendant failed to repay the said loan. On repeated requests made by the complainant, the defendant on 16-01-2007, gave a cheque for Rs.5 lakhs, bearing No.822408, drawn on State Bank of Mysore, Vyalikaval Branch, Bangalore. This cheque was presented by the complainant on the same day through his banker Vijaya Bank, Yeshwantpur Branch, Bangalore. But the cheque was returned on 18-01-2007 by the Bank with the remarks: “Stop Payment”. Thereafter, the complainant issued a legal notice to the defendant on 27-01-2007, at the office address as well as residential address of the defendant. The notice sent at the residential address through RPAD was duly received, while the one sent at the office address of the defendant was returned with the report: “Absent -Information delivered”. Even after the notice was served, the defendant neither made the payment nor responded to the same.

5. The defendant's case is that she is only the name lender to the business of films distribution run in the name of Vijayakumari Films which is actually controlled and managed by her husband Kuppuswamy. She has disputed taking any loan from the complainant as claimed by him. According to her, she never visited the place of complainant and never borrowed any money. The defendant has claimed that Vijayakumari Films had differences with the complainant in the year 2006, over release of the film “Pokari”. The defendant's husband had denied to release the film in the complainant's theatre on the ground that at the time of the release of the said movie, another Kannada movie was being shown there and it could have been a sensitive matter. The defendant's case is that the alleged cheque was given to the complainant in the year 1999 as security against loan of Rs.5 lakhs taken then. After the defendant paid the loan, the complainant did not return the said cheque saying that he had misplaced it. The defendant alleges that the complainant, due to ill will in release of the movie “Pokari”, used this old cheque to take revenge against the defendant firm.

6. The Trial Court found the defendant guilty under Section 138 of Negotiable Instruments Act and sentenced her to pay a fine of Rs.5,55,000/-, in default of payment, she was to undergo simple imprisonment for five months. The first appellate Court found that although the defendant disputed the transaction, they did not dispute the cheque or