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IN THE HIGH COURT OF KARNATAKA
H.B. Prabhakara Sastry , J.
Smt.Jalaja @ Jalajakshi – Appellant
Versus
Smt. G.venkta Durga Sarojini – Respondent
Criminal Revision Petition No. 849 of 2018
Decided On : 07-11-2022
Negotiable Instruments Act - Financial Transaction - Section 138 of N.I.Act - The court discussed the provisions of Section 138 of the Negotiable Instruments Act, 1881, which deals with the dishonor of cheques due to insufficiency of funds. The court also considered the evidence presented under Section 139 of the N.I.Act, which provides for a presumption in favor of the holder of the cheque in case of dishonor. The interpretation of these provisions influenced the court's decision to acquit the accused.
Fact of the Case:
The accused was convicted for dishonor of cheques under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused failed to repay a loan and issued dishonored cheques. The accused denied the existence of a legally enforceable debt and presented evidence to rebut the complainant's claims.
Finding of the Court:
The court found that the accused successfully rebutted the presumption of a legally enforceable debt by presenting evidence that raised doubts about the complainant's financial capacity to lend the amount and the purpose of the transactions. The court concluded that the judgments of the lower courts were erroneous and acquitted the accused.
Issues: The main issue was whether the accused's actions constituted an offense under Section 138 of the N.I.Act. The court also considered the credibility of the complainant's claims and the evidence presented by the accused to rebut the presumption of a legally enforceable debt.
Ratio Decidendi: The court held that the accused successfully raised doubts about the complainant's claims and rebutted the presumption of a legally enforceable debt. The court found that the lower courts failed to appreciate the evidence presented by the accused, leading to erroneous judgments.
Final Decision: The court allowed the Criminal Revision Petition, set aside the judgments of the lower courts, and acquitted the accused of the offense punishable under Section 138 of the Negotiable Instruments Act, 1881.
ORDER
1. The present petitioner was accused in C.C.No.50961/2014, in the Court of the learned XIV Addl.Chief Metropolitan Magistrate, Bengaluru, (hereinafter for brevity referred to as the 'trial Court'). By its judgment dated 26.02.2016, the trial Court convicted the accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as 'N.I.Act') and was sentenced accordingly.
2. The summary of the case of the complainant in the trial Court was that the complainant and the accused and one Suresh, son of accused, were known to each other for the past ten years. The accused and his son approached the complainant for financial assistance of Rs. 5 lakhs for construction of the third floor in their building and also for alteration of the ground to second floor. As the amount was huge, the complainant sought three months time to arrange for the funds. In the first week of January 2009, the complainant managed to arrange the loan and has paid a total sum of Rs. 4,75,000/-. The amount was paid by the complainant from the compensation amount received by her in MVC.No.3237/2001 and MVC.No.3238/2001. The complainant had the LIC policy in her name and she surrendered and got back Rs. 18,853/-. The accused assured the complainant that she would repay the loan amount after the completion of construction and the property given on lease or within a period of one year whichever is earlier. The complainant had stated that the loan amount was given to the accused on several dates by cheque dated 22.06.2010 bearing No.156428 for a sum of Rs. 85,000/-, cheque dated 03.12.2009 bearing No.156422 for a sum of Rs. 65,000/-, cheque dated 19.01.2010 bearing No.156424, for a sum of Rs. 7,000/- and cheque dated 31.03.2010 bearing No.156426, for a sum of Rs. 10,000/-and the remaining amount was paid in cash, for which the complainant has received the acknowledgement dated 13.08.2010 and 15.08.2010 from the accused. The complainant had also received the post-dated cheques duly signed by the accused and her son. After the completion of the stipulated period, the accused and her son did not repay the amount. Finally, to discharge the outstanding liability, the accused has issued five cheques in question, bearing No.531765, for a sum of Rs. 25,000/-, No.964188, for a sum of Rs. 10,000/-, No.964200, for a sum of Rs. 10,000/-, No.964181, for a sum of Rs. 5,000/- and No.531764, for a sum of Rs. 25,000/-, all dated 27.07.2013, drawn on Indian Bank, Cantonment Branch, Bengaluru. One cheque bearing No.162284, dated 27.07.2013, for a sum of Rs. 4,00,000/- was issued by the accused's son drawn on Vijaya Bank, HBR Layout Branch, Bengaluru. When the said cheques were presented for encashment, the same were returned on 29.07.2013 with an endorsement ' funds insufficient'. The complainant got issued the notice to accused on 24.08.2013 informing them about the dishonour of the cheques and calling upon them to make payment within fifteen days from the date of receipt of the notice. The accused has not repaid the same, which constrained the complainant to institute a criminal case against the accused in the trial Court for the offence punishable under Section 138 of N.I.Act.
3. Since the accused pleaded not guilty, charges were framed against the accused for the alleged offences.
4. The complainant in order to prove her case, got herself examined as PW-1 and got marked twenty six documents from Exs.P-1 to P-26. On behalf of the accused, the accused got herself examined as DW-1 and got marked eight documents from Exs.D-1 to D-8.
5. After hearing both side, the trial Court by its impugned judgment dated 26.02.2016, convicted the accused for the offence punishable under Section 138 of N.I.Act and sentenced her accordingly.
6. Challenging the said order, the accused has preferred an appeal in Criminal Appeal No.25018/2016, before the learned XXVIII Addl.City Civil & Sessions Judge, Mayohall Unit, Bengaluru, (hereinafter for b
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