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IN THE HIGH COURT OF KARNATAKA
Rajendra Badamikar, J.
K. Damodaran S/O Krishnan – Appellant
Versus
M. Shivaramareddy – Respondent
Criminal Revision Petition No. 234 of 2015
Decided On : 22-08-2023
REVISION PETITION - NEGOTIABLE INSTRUMENTS ACT - Section 138, Section 139, Code of Criminal Procedure, 1973 - Section 397, Section 401 - The court discussed the provisions of Section 138 of the Negotiable Instruments Act, which penalizes dishonor of cheques for insufficiency of funds, and Section 139, which creates a presumption in favor of the holder of the cheque regarding the existence of a legally enforceable debt. The court interpreted these sections in light of the evidence presented, concluding that the complainant failed to establish the debt and the authenticity of the signature on the cheque, leading to the reversal of the conviction.
Fact of the Case:
The accused borrowed Rs.1,75,000 from the complainant and issued a cheque in discharge of this debt. The cheque was dishonored due to a signature mismatch. The complainant filed a complaint after the accused refused to acknowledge a legal notice. The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, which was upheld by the appellate court.
Finding of the Court:
The court found that the complainant did not provide sufficient evidence to prove the existence of a legally enforceable debt or the authenticity of the signature on the cheque. The evidence presented was inconsistent, and the financial capacity of the complainant was questionable.
Issues: Whether the judgment of conviction and order of sentence passed by the trial court and confirmed by the appellate court were perverse, arbitrary, or illegal.
Ratio Decidendi: The court held that the burden of proof lies with the complainant to establish the existence of a legally enforceable debt and the authenticity of the cheque. The failure to provide adequate evidence led to the conclusion that the conviction was unjustified.
Final Decision: The revision petition was allowed, the conviction and sentence were set aside, and the accused was acquitted of the charges under Section 138 of the Negotiable Instruments Act.
Key Points:- The complainant must prove the existence of a legally enforceable debt beyond reasonable doubt; signature authenticity also must be proven where denied by the accused (!) (!) .- If the accused denies the signature on the cheque, the presumption under Section 139 does not apply (!) .- The revision petition results in acquittal of the accused and setting aside of conviction and sentence under Section 138; bail bond canceled; any deposited amount to be refunded (!) (!) (!) (!) .- The trial court’s conviction under Section 138 was reversed due to insufficient evidence of debt and signature authenticity (!) (!) (!) .- The complainant’s financial capacity and corroboration of the debt are relevant to proving enforceability (!) (!) .- The absence of expert testimony on signature reduces certainty of signature authenticity (!) .- The evidence of PW2 and PW3 regarding signature differences does not definitively establish enforceable debt (!) (!) .- The accused’s defense of theft of the cheque was not supported by complaint or action, but this defense does not create presumption in complainant’s favor without proof of debt and signature (!) (!) .- The final order acquits the accused and sets aside the conviction and sentence; refunds of deposits where applicable (!) (!) (!) (!) .
ORDER
1. This revision petition is filed by the accused under Section 397 read with Section 401 of Code of Criminal Procedure, 1973 challenging the judgment of conviction and order of sentence passed by Senior Civil Judge and Principal JMFC, KGF in C.C.No.260/04 and confirmed by Principal Sessions Judge, Kolar, in Crl.A.No.7/12 vide judgment dated 31.01.2015.
2. For the sake of convenience, the parties herein are referred to the original ranking occupied by them before the trial court.
3. The factual matrix leading to filing of the case are that the accused has approached the complainant on 05.05.2003 and availed a loan amount of Rs.1,75,000/-for payment of his personal debt. He has also issued a cheque dated 05.05.2003 drawn on Syndicate Bank, Robertsonpet, KGF in discharge of the said debt. The complainant has presented the said cheque on 16.06.2003 and the said cheque returned with an endorsement that 'signature differs from specimen signature available in the office'. The complainant has got issued a legal notice under registered post and accused has refused the same and hence, a complaint was lodged by the complainant. On the basis of this complaint, the learned Magistrate has taken cognizance and issued process against the accused. The accused has appeared through his counsel and he was enlarged on bail. He has also denied the accusation.
4. The complainant was got examined himself as PW1 and he placed reliance on the evidence of two witnesses who were examined as PW2 and PW3. Further complainant has also placed reliance on 7 documents marked at Ex.P1 to Ex.P7.
5. After conclusion of the evidence of the complainant, the statement of the accused under Section 313 of Code of Criminal Procedure is recorded to enable him to explain the incriminating evidence appearing against him in the case of the complainant. The case of the accused is of total denial and he himself got examined as DW1 and further examined one witness as DW2 on his behalf. He has further placed reliance on one document marked at Ex.D1.
6. After having heard the arguments and after appreciating the oral as well as documentary evidence, the learned Magistrate has convicted the accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act' for short) and sentenced him to undergo Simple Imprisonment for a period of one year with fine of Rs.5,000/- and also awarded a compensation of Rs.1,75,000/- to the complainant.
7. Being aggrieved by this judgment of conviction and order of sentence, the accused has approached the learned Principal Sessions Judge, Kolar in Crl.A.No.7/2012. The learned Sessions Judge after re appreciating the oral and documentary evidence, dismissed the appeal by confirming the judgment of conviction and order of sentence passed by the learned Magistrate. Being aggrieved by these concurrent findings of both the courts below, the accused is before this court by way of this revision.
8. Heard the arguments advanced by the learned counsel for revision petitioner and learned counsel for respondent. Perused the records.
9. The learned counsel for revision petitioner would contend that though the cheque belonged to the accused, he has not admitted his signature on the cheque and the complainant has also failed to establish his financial status. He would further assert that the evidence of PW1 and PW3 in this regard is inconsistent and contrary and hence, he would contend that the presumption under Section 139 of the Act is not available to the complainant. He would contend that the cheque leaf was stolen from his house and his signature has been forged. He would further assert that both the courts below have failed to appreciate these aspects and hence, he would contend that the judgment of conviction and order of sentence passed by both the courts below are perverse and arbitrary. Hence, he would seek for interference by this court.
10. Per contra, learned counsel for respondent would support
The presumption under Section 139 of the Negotiable Instruments Act does not apply if the accused denies the signature on the cheque, and the complainant must prove the existence of a legally enforce....
The validity of a cheque dishonor complaint under Section 138 depends on demonstrating a legally enforceable debt, which the complainant failed to establish.
Criminal Law - Dishonoured of Cheque - Appeal against conviction - Petitioner in this case, did not raise any probable defence which would create doubts in mind of Court. Court find no reason to inte....
To convict under Section 138 of the NI Act, it is essential to establish the signature and due execution of the cheque, with the burden resting on the accused to disprove after admission.
The judgment emphasizes the importance of proving the loan transaction, the service of legal notice, and the failure to establish valid defenses in cases of cheque bounce under Section 138 of the N.I....
The presumption under Section 139 of the Negotiable Instruments Act mandates that once a cheque's execution is admitted, it is presumed to be issued for discharging a debt, which the accused must reb....
Once execution of a cheque is admitted, the presumption under Section 139 of the Negotiable Instruments Act arises, and the burden shifts to the accused to rebut the existence of a legally enforceabl....
A cheque issued for repayment establishes liability under Section 138 of the N.I. Act; the burden to rebut the presumption of liability lies with the accused, who failed to provide sufficient evidenc....
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