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SUPREME COURT OF INDIA
Dhananjaya Y. Chandrachud, M.R. Shah, JJ.
ANSS RAJASHEKAR - Appellant
Vs.
AUGUSTUS JEBA ANANTH - Respondent
Criminal Appeal Nos.95-96 of 2019 (Arising out of Special Leave Petition(Crl.) Nos. 3737-3738 of 2016)
Decided On : 18-01-2019
(2010) 11 SCC 441 – Relied upon
Facts of the case:
on 09 March 2005, the appellant issued a cheque in the sum of Rs. 5 lakhs in his favour, towards discharge of a liability of Rs. 15 lakhs, in repayment of an amount which was borrowed in the month of February, 2004. According to the complainant, the amount was repayable within six months. When the complainant presented the cheque on 23 March 2005, it was returned by the bank for insufficiency of funds. The complainant presented the cheque again for realisation on 14 July, 2005 but it was returned with the same result. A notice of demand was issued by the complainant on 10 August, 2005. In response, the appellant-accused denied that there was a legally enforceable debt.
On remand, the Trial court convicted the appellant and sentenced him to undergo imprisonment of one year and to pay a fine of Rs. 7 lakhs out of which an amount of Rs. 6.75 lakhs was directed to be paid to the respondent by way of compensation. The appeal of the appellant was allowed and the First Appellate Court reversed the conviction and sentence recorded by the Trial court. The High Court, in criminal appeal reversed the judgment of acquittal, recording that while the notice of the appeal was served upon the appellant, he had remained absent.
Finding of the Court:
Impugned judgment cannot be sustained.
Result: Appeal allowed.
Key Points: - (!) The judgment discusses the presumption under Section 139 of the NI Act and how it is rebuttable; standard of proof for rebuttal is preponderance of probabilities as per Rangappa (supra) (!) (!) . - (!) The High Court reversal of the acquittal lacked appreciation of the first appellate court’s reasons and was found unsatisfactory; it should have considered the evidence and findings of the lower appellate court (!) . - (!) The appellant’s defence that there was no legally enforceable debt was considered probablised based on the record, and the first appellate court’s acquittal was justified (!) . - (!) The Supreme Court restored the order of acquittal and set aside the High Court’s conviction under Section 138, aligning with Rangappa’s framework (!) . - (!) The case involves analysis of whether the complainant established debt or whether the respondent’s defence created probable doubt about repayment (!) (!) . - (!) The remand by the first appellate court and the interplay of evidence, including cross-examination and documentary discrepancies, influenced the ultimate finding on debt existence (!) (!) . - (!) The overall holding emphasizes that a well-reasoned order cannot be set aside without appreciating evidence or referring to the lower court’s reasons (!) . - (!) It discusses the necessity of proportionality and the evidentiary burden when rebutting Section 139 presumption (!) . - (!) The outcome: appeals allowed; judgment of High Court set aside; acquittal restored. (!)
JUDGMENT :
Dhananjaya Y. Chandrachud, J.
Leave granted.
2. These appeals arise from the judgment and order of a learned Single Judge of the High Court of Karnataka dated 14 November 2014, reversing the judgment of the Lower Appellate Court acquitting the appellant of an offence under Section 138 of the Negotiable Instruments Act, 1881 ('the Act').
3. The case of the respondent-complainant is that on 09 March 2005, the appellant issued a cheque in the sum of Rs. 5 lakhs in his favour, towards discharge of a liability of Rs. 15 lakhs, in repayment of an amount which was borrowed in the month of February, 2004. According to the complainant, the amount was repayable within six months. When the complainant presented the cheque on 23 March 2005, it was returned by the bank for insufficiency of funds. The complainant presented the cheque again for realisation on 14 July, 2005 but it was returned with the same result. A notice of demand was issued by the complainant on 10 August, 2005. In response, the appellant-accused denied that there was a legally enforceable debt. In his reply, the appellant stated thus:
"4. My client and his wife and your client and his wife had purchased separate house sites in Survey No. 96/3 at Hoaramvuagrahara Village, Krishnarajapuram Hobli, Bangalore on 31.01.2001. All these sites situate adjacent to each other. Your client enticed my client and my client's wife to give power in his favour so that he could pursue the matter of getting housing loan from financial institutions at Bangalore. However your client prepared the power deed incorporating the clauses for sale also. When my client questioned about the inclusion of clauses for sale, your client had stated that it had inadvertently typed and the purpose of power deed is only for obtaining loan and so it need not be registered.
5. Besides this power deed your client also obtained from my client the original document being Document No. 10470/2001 and Khatha, Tax Receipts, Approved plan and also 4 blank cheques of U.T.I. Bank Ltd, Tuticorin including the cheque mentioned in your notice and Vysya Bank, Bangalore Cheque Book containing 10 leaves.
6. Your client obtained these cheques stating that the financial institutions will insist for the cheque leaves when the loan is sanctioned as to use these cheques for monthly repayment of loan amount. Your client has now misused the one such cheque as if it was issued by my client on 09.03.2005. Subsequently my client and his wife canceled the power deed and also requested your client to return the cheques and documents. However, your client is very particular to grab house sites along with half way constructed building for him and his father. An attempt was also made earlier in this regard. Your client's father colluding with your client sent a notice dated 09.05.05 containing false allegations to my client to execute the sale deed of said house site situate at the above mentioned survey number in favour of him. Since the attempt frizzled out, now the son, your client is trying in a different way, illegally using the mentioned cheque to harass my client to part with the said house site."
4. As the above reply indicates, the defence of the appellant was that the appellant and his wife and the complainant and his wife had purchased adjacent house sites. The complainant was alleged to have persuaded the appellant to execute a power of attorney in his favour for the purpose of obtaining a housing loan from the financial institutions in Bangalore. According to the appellant as many as four blank cheques of U.T.I Bank Ltd. and a Vysya Bank cheque Book containing ten leaves were obtained by the complainant from the appellant. One of the cheques which were handed over by the appellant to the respondent-complainant was alleged to have been misused.
5. The complainant lodged a complaint before the Additional Chief Metropolitan Magistrate at Bangalore being CC No. 26999 of 2006 under Section 138 of the Act on 9 September 2005.
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