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2020 Supreme(Kar) 1286
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
H.B. Prabhakara Sastry, J.
H.P. Shivananda - Appellant
Versus
Dinesh D Udyavar - Respondent
Criminal Appeal No. 96 of 2011
Decided On : 24-09-2020
G.L. Mohan Maiya, Advocate, A. Keshava Bhat, Advocate, K. Shrikrishna, Advocate, Jeevan K, Advocate
The main legal point established in the judgment is the presumption of a legally enforceable debt under Section 139 of the N.I. Act and the burden of proof on the accused to rebut this presumption.
Headnote:
N.I.Act - Dishonoured Cheque - Section 138 of N.I.Act - Summary of the acts and sections referenced and discussed by the court: The court discussed Section 138 of the Negotiable Instruments Act, 1881, which deals with the dishonour of cheques and the legal consequences. The court also referred to Section 139 of the N.I. Act, which deals with the presumption of existence of a legally enforceable debt arising in favor of the complainant. The court's decision was influenced by the interpretation of these provisions and their application to the facts of the case.
Fact of the Case:
The complainant filed a case against the accused for dishonour of a cheque issued as repayment of a loan. The Trial Court acquitted the accused, leading to the complainant's appeal.
Finding of the Court:
The court found that the accused's defense did not create a preponderance of probabilities in his favor, and the doubts raised by the Trial Court were self-created and unjustified. The court held that the dishonoured cheque proved the accused's guilt under Section 138 of the N.I. Act.
Issues: (i) Whether the accused committed an offence under Section 138 of the N.I. Act, and (ii) Whether the Trial Court's judgment deserved interference.
Ratio Decidendi: The court held that the presumption of a legally enforceable debt arose in favor of the complainant under Section 139 of the N.I. Act, and the accused's defense failed to rebut this presumption. The Trial Court's doubts were unjustified and led to an erroneous judgment of acquittal.
Final Decision: The appeal was allowed, the accused was convicted under Section 138 of the N.I. Act, and sentenced to pay a fine of Rs. 10,10,000 or undergo simple imprisonment for six months in case of default. The complainant was awarded compensation.
JUDGMENT
H.B.Prabhakara Sastry, J. - The present appellant was the complainant in the Court of the First Class Judicial Magistrate (V Court), Mangalore, Dakshina Kannada (hereinafter for brevity referred to as "Trial Court"), in C.C.No.219/2008, which case was filed against the present respondent arraigning him as accused, under Section 200 of Code of Criminal Procedure, 1973 (hereinafter for brevity referred to as "Cr.P.C."), for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as "N.I.Act").
2. The summary of the case of the complainant in the Trial Court is that, the respondent/accused had taken a hand loan of a sum of Rs. 11,00,000/- from the complainant. Towards its repayment, the accused had issued a cheque dated 15-10-2007 for a sum of Rs. 10,00,000/- bearing No.131570 drawn on Vijaya Bank, Talapady Branch, Mangalore, favouring the complainant. The said cheque, when presented for realisation, was returned with an endorsement of insufficiency of funds. Thereafter, the complainant got issued a legal notice on 17-10-2007 to the accused through Registered Post Acknowledgement Due (RPAD). The accused did not meet the demand made in the notice. This constrained the complainant to institute a criminal case against the accused for the offence punishable under Section 138 of the N.I. Act.
3. The respondent who was accused in the Trial Court appeared and contested the matter.
In order to prove his case, the complainant got himself examined as PW-1 and got marked documents from Exs.P-1 to P-5. The accused, on his behalf, examined one Sri.Praveen Uchil as DW-1 and got himself examined as DW-2 and got marked documents from Exhibits D-1 to D-3.
4. After hearing both side, the Trial Court by its impugned judgment dated 04-12-2010, acquitted the accused for the alleged offence punishable under Section 138 of N.I.Act. Being aggrieved by the said judgment of acquittal, the complainant has preferred this appeal.
5. The respondent/accused is being represented by his learned counsel.
6. The Trial Court records were called for and the same are placed before this Court.
7. Heard the arguments of learned counsel from both side. Perused the materials placed before this Court including the Trial Court records.
8. Learned counsel for the appellant in his argument submitted that the Trial Court committed an error in believing the defence of the accused that, a blank cheque was given to the complainant by the accused, while it ignored that, in practice, no seller of a property would give such kind of a blank cheque to a purchaser, much less as a security.
He also submitted that even though the accused has admitted the receipt of a sum of Rs. 11,00,000/- by the complainant, still, the Trial Court erred in observing that the complainant could not establish the existence of a legally enforceable debt.
Stating that the conduct of the accused in not filing any criminal case, seeking return of the alleged blank cheque said to have been given to the complainant, would also go to show that the defence of the accused was not tenable, the learned counsel prayed for allowing the appeal.
9. Learned counsel for the respondent/accused in his argument submitted that the accused though has admitted the signature in Ex.D-3, but by itself it cannot be concluded that he has admitted the execution of the said document.
He also submitted that the accused has established that, he has returned the entire loan of a sum of Rs. 10,00,000/- in cash. Apart from the same, the accused has also proved the preponderance of probability in his favour. Thus, the judgment of the Trial Court does not warrant any interference at the hands of this Court.
10. After hearing both side, the points that arise for my consideration in this appeal are :
(i) Whether the complainant has proved beyond reasonable doubt that the accused has committed an offence punishable under Section 138 of the Negotiable Instrument Act, 1881, as alle
