2010 Supreme(Kar) 961

2011 (3) KCCR 1825
KARNATAKA HIGH COURT
B.V. Nagarathna, J
M/s. United Distributors, Mangalore – Appellant
Versus
Smt. Geetha K. Rai – Respondent
Criminal Appeal No. 1136 of 2004
Decided on : 20.10.2010

Headnote:NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138, Proviso: [B.V.Nagarathna, J] Held, Allegation against the accused-respondent, in respect of commission of offence punishable, under Section 138 of Negotiable Instruments Act, 1881, cannot be sustained, who is rightly acquitted by the Trial Court, as the amount of Rs.88,030/-, due to the appellant-firm, was paid by the accused-respondent vide five cheques, which were encashed by the appellant-firm, in the month of August, 2000, though the accused-respondent had issued in June, 2000, which were presented for encashment by the appellant-firm, after realization of the amount, and after stop-payment instructions was issued by the accused-respondent, in this regard.

       NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138: [B.V.Nagarathna, J] Whether liability for commission of offence under Section 138, can be converted into civil suit for recovery? - Held, Once the liability for commission of offence under Section 138, stands discharged, it cannot be converted into civil suit for recovery.

       NEGOTIABLE INSTRUMENTS ACT, 1881 - Section 138 & 139: [B.V.Nagarathna, J] Degree of Proof - Degree of, - Whether an accused in an offence punishable under Section 138, is expected to prove his defence beyond reasonable doubt? - Held, An accused in an offence punishable under Section 138, is not expected to prove his defence beyond reasonable doubt, as is expected by the complainant in criminal trial.

       NEGOTIABLE INSTRUMENTS ACT, 1881 - Sections 138 & 139: [B.V. Nagarathna, J] Dishonour of cheque - Acquittal - There was a business transaction between the parties. A current account was being maintained in respect of the purchase made by the accused from the complainant. There was outstanding dues of Rs.2,58,763/- at the relevant point of time, in respect of which the accused had issued four post dated cheques and on the request of the accused for postponing the presentation of cheques, they were not presented and only on 13/12/2000 presented cheques for realization but the same were dishonoured. Five cheques issued in the month of August 2000 and cash payment of Rs.10,380/- made by the accused amounting to Rs.88,030/- which was the amount due under the five cheques in questions. Though the accused may have been liable to the complainant in respect of the amount over and above what is due under four cheques which are dishonoured and not any other legal liability. Infact, the debt or other liability referred to under Section 138 of the Act has to be read in the context of the amount that arises or is claimed in respect of the four cheques initially issued by the accused and which were returned by the bank dishonoured, either due to insufficiency of funds or due to stop payment instructions in which case, the offence could be said to have been committed. Therefore, the contention of the appellant that despite the payment of Rs.88,030/- by the accused in the month of August 2000 through cheques and by cash, there was still outstanding liability on account of the business transaction in respect of which, the dishonour of the four cheques in question has to be considered cannot be accepted. Section 139 of the Act deals with presumption in favour of holder of cheques. However, the said presumption is a rebuttable presumption and contrary material can be produced by the accused in order to dislodge the case of the complainant. In the instant case, in the reply statement itself the accused has stated that the five cheques were issued and cash payment of Rs.10,380/- was made which was also acknowledged and that these five cheques were duly honoured and amounted to Rs. 80,030/- which figure tallies with the amount mentioned in the four cheques in question and it is under these circumstances that stop payment instructions were issued on 4/9/2000. Subsequently, in December 2000, cheques were presented just prior to their expiry date with intention to receive the double payment. The evidence let in by the accused in support of the said defence clearly rebuts the case of the complainant. Under the circumstances, initially the presumption raised in favour of the complaint would no longer survive. Accordingly, the contention of the appellant that the outstanding dues of the accused were over and above what the sum total of the amount mentioned was the four cheques in question and therefore, the dishonour of the said four cheques would amount to an offence punishable under Section 138 of the Act, has to be rejected.