A cheque issued as security for a loan can still be presented for recovery if the loan is not repaid, as per recent Supreme Court judgments.

JUDGMENT

K. Natarajan, J. - This appeal is filed by the complainant under Section 378 (4) of Cr.P.C for setting aside the judgment of acquittal passed by the additional City Civil and Sessions Judge in Criminal appeal No.136/2015 dated 30.01.2016 and to confirm the judgment of the Trial Court for having convicted the respondent in CC.No.3753/2013 dated 05.01.2014.

2. Heard the arguments of learned counsel for the appellant as well as learned counsel for respondent.

3. The ranks of the parties are retained for the purpose of convenience.

4. The case of the complainant is that the accused said to be running traveling business and for improvement of his business and also for construction of his house he had borrowed a sum of Rs.7,00,000/-from the complainant on 4.5.2012 and promised to repay within 5 months and also had issued a post dated cheque drawn on Central Bank of India Ramamurthy Nagar, Bangalore and on the same day the wife of the accused executed a loan agreement. accordingly, when the cheque was presented for encashment it had become dis-honoured for "funds insufficient", hence after issuing notice complaint came to be filed. after taking cognizance the accused appeared before court and he was recorded, then evidence of the accused denied the charges. The complainant examined as PW1 and got marked 9 documents and accused himself examined as DW1, but no documents were marked. after arguments the trial court found him guilty and convicted and sentenced to pay Rs.7,25,000/- and in default he shall undergo imprisonment for one year which was challenged by the accused by filing appeal before the Sessions court in Crl.a.No.136/2015 and the same was allowed by the Sessions Judge and acquitted the accused which is under challenge before this court.

5. The learned counsel for the appellant contended that the judgment of the appellate court is not sustainable under the law where the contention of the respondent accused was believed as the appellant had no capacity and the cheque was issued for security purpose which is not correct. The wife of the accused also executed agreement where it is clearly revealed that the cheque issued by the accused, the said document has been marked by the appellant as per Ex.P9 and the complainant is running traveling agency having 9 cars including 4 Innova cars and disbelieving the evidence of the complainant and presumption available in favour of the complainant has not been rebutted by the accused, therefore, prayed for setting aside the judgment of the first appellate court and to confirm the order of conviction of the order of trial court. In support of his argument the learned Counsel for the appellant relied upon judgment of the Madras High Court and judgment of this Court reported in ILR 2005 Karnataka 3167 and judgment as below:

1. Hiten P.Dalal vs. Bratindranath Banerjee 2001 SCC (2001) 6 SCC 16,

2. ICDS Ltds., V/s Beena Shabeer and anr reported in (2002) 6 SCC 426.

3. Sail Vs Jaggu reported in (2019) 7 SCC 658

6. Per contra the learned counsel for the respondent has supported the judgment of the first appellate court and contended that as per the agreement of the appellant in Ex.P9 the wife of the accused agreed to repay amount as she had borrowed the loan where the accused is not a signatory and it is clearly admitted by the complainant, in his evidence that cheque was given for security. The admission was not acceptable by the trial court, whereas the first appellate court has considered and when the complainant himself accepted and admitted the cheque was issued for the purpose of security he has no legally liable to pay any debt to the complainant. The complaint has no capacity to pay Rs.7,00,000/-and he has no record to show he is having so much amount. Therefore, the appeal required to be dismissed. Hence, prayed for dismissal of the appeal.

7. In support of his contention the respondent counsel relied upon the judgments of Hon'ble Supreme Court as under:

a) M.S. Naryana Menon Vs State of Ker