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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
S. RACHAIAH, J.
H.B. Bhagyalakshmi W/o Late D.N. Madappa – Appellant
Versus
Cheluvamma W/o Late Raje Gowda – Respondent
Criminal Appeal No. 2104 of 2018
Decided On : 15-12-2023
N.I. Act - Negotiable Instruments - Section 138 - 139 - 20 - 87 - Summary of the acts and sections referenced and discussed by the court: The court discussed the provisions of Section 138, 139, 20, and 87 of the Negotiable Instruments Act. It highlighted the rebuttable presumption under Section 139, the authority given to the holder of a blank instrument under Section 20, and the effect of material alteration under Section 87. The court emphasized the onus on the accused to raise a probable defense and the requirements for rebutting the presumption.
Fact of the Case:
The complainant lent money to the accused, who issued a cheque for repayment. The cheque was dishonored, and the accused was acquitted by the Trial Court. The appellant challenged the acquittal, alleging alteration of the cheque.
Finding of the Court:
The court found that the accused failed to prove material alteration of the cheque and set aside the acquittal. The accused was convicted under Section 138 of the N.I. Act and sentenced to pay a fine and compensation to the complainant.
Issues: The issues were whether the Trial Court's acquittal was justified and whether the appellant had grounds to interfere with the findings.
Ratio Decidendi: The court emphasized the rebuttable presumption under Section 139 and the authority given to the holder of a blank instrument under Section 20. It held that the accused failed to prove material alteration of the cheque, leading to the setting aside of the acquittal.
Final Decision: The Criminal Appeal was allowed, the acquittal was set aside, and the accused was convicted under Section 138 of the N.I. Act. The accused was sentenced to pay a fine and compensation to the complainant.
JUDGMENT :
S. RACHAIAH, J.
1. This appeal is filed by the complainant/appellant being aggrieved by the judgment and order of acquittal dated 26.10.2018 passed in C.C. No. 25323/2017 on the file of XII and XXXVII Additional Chief Metropolitan Magistrate (S.C.C.H-8), Bengaluru, wherein the Trial Court acquitted the accused/respondent for the offence punishable under Section 138 of the Negotiable Instruments Act (for short ‘N.I. Act’).
2. The rank of the parties in the Trial Court henceforth will be considered accordingly for convenience.
Brief facts of the case:
3. The complainant was working as a teacher and she knew the accused for several years. The accused in the month of July 2016 approached the complainant and requested the complainant to lend amount of Rs. 2,50,000/- for her granddaughter’s education and also for family necessities. The complainant agreed to pay the said amount. On 27.07.2016 and 08.11.2016, the complainant has paid Rs. 30,000/- twice in the name of the daughter of the accused through cheques. Again on 08.11.2016, the accused had requested to pay the amount of Rs. 1,90,000/- by way of cash. Considering her request, the complainant has paid the said amount in the presence of Smt. Parvathi, Smt. Salma and Sri. Bommanathappa. The accused had promised the complainant that she would repay the amount as early as possible. However, even after lapse of almost one year, the amount was not refunded. Therefore, the complainant insisted the accused to repay the said amount. Then, the accused in the month of June 2017 issued a cheque and asked the complainant to present the same for encashment. When the said cheque was presented for encashment, it came to be dishonoured as “could not be proceeded due to alteration.” The said endorsement has been received on 09.08.2017. The legal notice was issued on 05.09.2017 and the said notice came to be served on 08.09.2017. Inspite of notice having been served, the accused has not paid the amount nor replied to the said notice. Hence, it constrained the complainant to lodge a complaint against the accused before the Jurisdictional Magistrate.
4. To prove the case of the complainant, the complainant examined herself as PW-1 and also got examined PW-2 and further got marked 10 documents as Exs.P1 to P10. On the other hand, the accused examined herself as DW-1 and got marked 13 documents as Exs.D1 to D13. The Trial Court after appreciating the oral and documentary evidence on record of both the parties, recorded the acquittal.
5. Heard Sri. H.B. Rudresh and Sri. P.B. Ajit, learned counsels for the appellant and Sri. Amruthesh C. learned Amicus Curiae for the respondent.
6. It is the submission of the learned counsel for the appellant that the judgment and order of acquittal passed by the Trial Court is perverse and erroneous. Hence, the same is liable to be set aside.
7. It is further submitted that the Trial Court has come to the conclusion that cheque has been altered, however, Ex.P2 is an endorsement of the bank, in the said endorsement, there is no such averment. In the absence of such averment, the Trial Court recorded the acquittal on the same ground appears to be not proper and perverse.
8. It is further submitted that the amount of Rs. 30,000/- was paid twice to the daughter of the accused by way of cheques and the remaining balance amount was paid in cash in the presence of PW-2 and two others. The evidence of PW-2 though inspired the confidence of the Court, the Trial Court failed to take note of the same and recorded the acquittal which is opposed to the evidence on record. Therefore, the judgment of acquittal passed by the Trial Court which is appeared to be improper and illegal and therefore, the same is liable to be set aside. Making such submission, the learned counsel for the appellant prays to allow the appeal.
9. Per contra, the learned Amicus Curiae for the respondent/ accused vehemently justified the concurrent findings and submitted that the accused had borrowed a sum of R
The main legal point established in the judgment is the onus on the accused to raise a probable defense and the requirements for rebutting the presumption under Section 139 of the Negotiable Instrume....
The standard of proof required to rebut the statutory presumption under Sections 118(a) and 139 of the NI Act is preponderance of probabilities, and the accused is not required to prove his case beyo....
Material alteration of a negotiable instrument renders it void as per Sec. 87 of the N.I. Act.
The burden of proof, legal presumptions, and the accused's admission of debt in the issuance of the cheque are crucial in determining liability under the Negotiable Instrument Act.
Material alteration in cheque's payee account number without drawer's consent or authentication renders it void under Section 87 NI Act; complainant bears burden to explain; rebuts presumptions under....
The presumption of liability in dishonor of cheques under Section 139 of the NI Act is rebuttable, requiring the accused to provide credible evidence to challenge the presumption of a legally enforce....
A dishonored cheque primarily for insufficient funds establishes liability under Section 138, while secondary reasons like signature discrepancies are irrelevant unless intent to defraud is proven.
The presumption under Section 139 of the NI Act applies unless substantively rebutted, and any alteration in the cheque must be proven materially by the accused.
Material alterations to a negotiable instrument render it void unless consented by the parties; a court should not overturn an acquittal unless findings are unreasonable or perverse.
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