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IN THE HIGH COURT OF KARNATAKA
S Rachaiah, J.
Mr. Mallikarjuna S.E. S/o. Mr. Eregowda – Appellant
Versus
Mr. Murali. M S/O. Sri. M. Mani – Respondent
Criminal Revision Petition No. 1020 of 2019
Decided On : 20-09-2023
NEGOTIABLE INSTRUMENTS - CRIMINAL REVISION PETITION - Section 138, Section 139 of the Negotiable Instruments Act, 1881 - The court discussed the presumption of liability under Section 139, which shifts the burden of proof to the accused to demonstrate that the cheque was not issued for a legally enforceable debt. The court emphasized that mere denial is insufficient to rebut this presumption, and the accused must provide cogent evidence to support their claims. The court found that the complainant failed to prove the existence of a debt, leading to the reversal of the conviction.
Fact of the Case:
The petitioner was convicted under Section 138 of the Negotiable Instruments Act for issuing a cheque that was dishonored due to insufficient funds. The complainant claimed that the petitioner owed him money related to a property transaction, while the petitioner contended that the cheque was misused and that no loan was taken from the complainant.
Finding of the Court:
The court found that the complainant did not provide sufficient evidence to establish that a legally enforceable debt existed. The petitioner successfully rebutted the presumption of liability by demonstrating that the cheque was issued under different circumstances and that the complainant's evidence was inadequate.
Issues: 1) Are the concurrent findings of conviction by the lower courts sustainable? 2) Did the petitioner provide sufficient grounds to interfere with the conviction?
Ratio Decidendi: The court reiterated that under Section 139 of the Negotiable Instruments Act, there is a presumption that a cheque was issued in discharge of a debt, which is rebuttable. The burden lies on the accused to prove the contrary with cogent evidence, and mere denial is insufficient.
Final Decision: The Criminal Revision Petition was allowed, the judgments of conviction and sentence were set aside, and the petitioner was acquitted of the charges under Section 138 of the Negotiable Instruments Act.
ORDER
1. This Criminal Revision Petition is filed by the petitioner, being aggrieved by the judgment of conviction and order of sentence dated 21.03.2017 in C.C.No.27012/2015 on the file of the Court of XXII Additional Chief Metropolitan Magistrate, Bangalore City and its confirmation judgment and order dated 20.07.2019 in Crl.A.No.538/2017 on the file of the Court of LX Additional City Civil and Sessions Judge, Bengaluru (CCH-61) has filed this revision petition seeking to set aside the concurrent findings recorded by the Courts below, wherein the petitioner / accused was convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N.I Act').
2. The petitioner is the accused before the Trial Court and the appellant before the Appellate Court.
Brief facts of the case are as under:
3. It is the case of the complainant that, the petitioner and the respondent were friends. The respondent along with one Sri.Kempegowda, Sri.Jaikar entered into an agreement of sale dated 01.03.2013 with one Sri.G.Srinivasa in respect of property Sy.No.9/2, Machohalli Village, Dasanapura Hobli, Bengaluru North Taluk (as per Ex.P6). It is further stated that the petitioner being one of the purchasers was short of funds, therefore, it is stated that the respondent stated to have funded an amount of Rs.15,00,000/- at the time of agreement of sale. It was agreed that the said amount would be repaid after the development and sale of the said property. The accused / petitioner stated to have issued a post-dated cheque dated 25.08.2015 to the complainant. It is stated that the said cheque was presented on 09.10.2015 for encashment, however, it was dishonoured for the reason 'funds insufficient'. After the issuance of the notice, a complaint came to be filed before the Magistrate having jurisdiction.
4. To prove the case of the complainant, the complainant examined himself as PW.1 and marked 26 documents as Exhibits P1 to P26 and also examined the other three witnesses as PWs.2 to 4. On the other hand, the petitioner examined himself as DW.1 and got marked 7 documents as Exs.D1 to D7. The Trial Court after appreciating the oral and documentary evidence on record convicted the petitioner for the offence stated supra. Being aggrieved by the same, the petitioner preferred an appeal before the Appellate Court, the Appellate Court allowed the appeal in part by confirming the judgment of conviction rendered by the Trial Court, however, the Appellate Court modified the order of sentence and sentenced the accused to pay a fine of Rs.15,05,000/-. Being aggrieved by the same, the petitioner has preferred this revision petition seeking to set aside the concurrent findings.
5. Heard Shri Prasanna D P, learned counsel for the petitioner, and Shri N Shivakumar, learned counsel for the respondent.
6. It is the submission of the learned counsel for the petitioner that, the Courts below failed to consider the contradiction and omission and passed the impugned judgments, which are opposed to the facts and evidence on record, hence the same is liable to be set aside.
7. It is the contention of the learned counsel for the petitioner that, the petitioner used to purchase cement and other items from one Sri.Prakash who was running a shop namely S.L.N.Traders situated at Srirampuram, Bengaluru -560 021. It is further stated that, after the petitioner came to know that, the said cheque was misused by the respondent, he immediately, sent a legal notice to said Prakash asking him to return the said cheque.
8. It is further contended that the petitioner has substantiated that, he has not borrowed a loan from the respondent as stated in the cheque and also the respondent has not proved that there is a legally enforceable debt or liability. In spite of not proving the case by the respondent, the Trial Court and the Appellate Court grossly erred in holding that, the petitioner found guilty of the offence under Section 138 of the NI Act is erroneous an
The presumption of liability under Section 139 of the N.I. Act is rebuttable, and the burden lies on the complainant to prove the existence of a legally enforceable debt beyond reasonable doubt.
The presumption of a legally enforceable debt under Sections 138 and 139 of the N.I. Act is strong and requires evidence to the contrary by the accused, which was not provided.
The main legal point established is the significance of the presumption under Sec. 139 of the N.I. Act and the accused's burden to raise a probable defence to rebut the presumption.
The main legal point established in the judgment is that the defense must raise a credible and sufficient rebuttal to the presumption of liability under Section 138 of the Negotiable Instruments Act ....
The presumption under Sec. 139 of the Negotiable Instruments Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
This Court has a very limited jurisdiction under Section 397 of the Cr.PC, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below.
The judgment established the importance of the accused's obligation to bring forth evidence to rebut the statutory presumption under Section 139 of the Negotiable Instruments Act and highlighted the ....
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