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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S. RACHAIAH, J.
R. Pramod, S/o V.N. Ramakrishnaiah – Appellant
Versus
Gangadharaiah S/o Gangappa – Respondent
Criminal Appeal No. 2000 of 2022 (A)
Decided on : 09-11-2023
N.I. Act - Cheque Bounce - 138, 139, 118 - The court discussed the legal provisions of the Negotiable Instruments Act, particularly Sections 138, 139, and 118. It emphasized the presumption in favor of the holder of a cheque and the burden on the accused to raise a probable defense to rebut the presumption. The court highlighted the need for the accused to prove by cogent evidence that there was no debt or liability, and the significance of the accused's failure to provide a probable defense.
Fact of the Case:
The complainant lent a sum of Rs.20.00 lakhs to the accused, who issued two cheques for repayment. When the cheques were presented for encashment, they were returned due to 'funds insufficient'. The accused denied the transactions, leading to a legal dispute.
Finding of the Court:
The court found that the accused failed to raise a probable defense to rebut the presumption under Section 139 of the N.I. Act. The accused's denial regarding the existence of debt was not sufficient to serve any purpose. The court concluded that the presumption prevailed upon the failure of the defense and allowed the appeal, setting aside the judgment and order of acquittal.
Issues: The key issue revolved around the accused's failure to provide a probable defense to rebut the presumption under Section 139 of the N.I. Act, despite denying the transactions.
Ratio Decidendi: The court emphasized the importance of the accused raising a probable defense to create doubt regarding the existence of debt or liability, as required under Section 139 of the N.I. Act. It highlighted that mere denial regarding the existence of debt was not sufficient to serve any purpose.
Final Decision: The criminal appeal was allowed, the judgment and order of acquittal were set aside, and the judgment and order passed by the Trial Court were confirmed. The Trial Court was directed to take necessary steps to secure the presence of the accused to execute the sentence after the appeal period.
JUDGMENT :
1. This appeal is filed by the complainant being aggrieved by the judgment and order of acquittal dated 01.10.2022 in Criminal Appeal No.858/2019 on the file of LIX Additional City Civil and Sessions Judge (CCH60), Bengaluru.
2. The rank of the parties in the Trial Court henceforth will be considered accordingly for convenience.
Brief facts of the case:
3. It is the case of the complainant that the accused approached him for financial assistance on 14.09.2015 and requested him to make payment of Rs.20.00 lakhs for his domestic problems. The complainant and his family members considering the said need advanced the said amount in cash to the accused. The accused at the time of availing the said loan had agreed to repay the same within six months. In the first week of April 2016, the complainant demanded him to repay the said amount, at that time, the accused sought for two months time to repay the said amount. When the complainant demanded the accused to repay the said amount, the accused issued two cheques for a sum of Rs.10.00 lakhs each and instructed the complainant to present the cheques for encashment. When those cheques were presented for encashment, the cheques were returned with a shara as ‘funds insufficient’. Notice was issued and brought to the knowledge of the accused about dishonour of cheques on 13.07.2016. The notice was returned with a shara as “door lock, intimation delivered, not claimed”. Therefore, a complaint came to be lodged by the complainant before the jurisdictional Magistrate.
4. To prove the case of the complainant, the complainant examined himself as PW.1 and got marked 29 documents as Exs.P1 to P29. On the other hand, the accused examined himself as DW.1 and got marked Exs.D1 to D5. The Trial Court after appreciating the oral and documentary evidence on record, convicted the accused and sentenced him to pay fine amount of Rs.20.00 lakhs and in default of the same, he is ordered to undergo simple imprisonment for one year. In an appeal filed by the accused, the Appellate Court allowed the appeal and set aside the judgment of conviction and order of sentence passed by the Trial Court. Hence, this appeal.
5. Heard Sri.M.K.Sandeep, learned counsel appearing on behalf of Sri.B.Roopesh, learned counsel for the appellant and Sri.Suresh D.Deshpande, learned counsel for the respondent.
6. It is the submission of the learned counsel for the appellant that the Appellate Court failed to take note of the transaction and recorded the acquittal which is perverse and illegal and it is also against the evidence on record both oral and documentary. Hence, the same is liable to be set aside.
7. It is further submitted that the complainant had lent amount in the month of September, 2015 and the source of lending the said amount has also been explained in the evidence of the complainant. The mother of the complainant Smt.Sukanya had possessed site in Srigandadakaval and another site at Banashankari 6th Stage. A site at Srigandadakaval was sold on 03.07.2014 as per the sale deed which is marked as Ex.P8 and another site situated at Banashankari sold on 26.08.2015. The amount which generated through the sale deed executed in favour of two persons has lent to the accused. It is also further stated that the complainant was working as contractor by profession and the agreement of construction has been produced and marked as Ex.P12. The said agreement discloses that the amount of Rs.36,25,000/. Thereby the complainant establishes the financial capacity.
8. It is further submitted that once the execution of the cheques and the signatures are admitted, the presumption has to be raised in favour of the complainant that the said cheques were issued for consideration. The Appellate Court failed to take note of the transaction and recorded the acquittal which is perverse, illegal and the same is liable to be set aside.
9. It is further submitted that the accused had to rebut the presumption by leading cogent evidence. However, th
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