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2023 Supreme(Kar) 1206
IN THE HIGH COURT OF KARNATAKA
J.M.Khazi, J.
Charles Harry – Appellant
Versus
Praveen Jain – Respondent
Criminal Appeal No. 862 of 2012
Decided On : 01-09-2023
V.Ganga Bai, Advocate, Raghavendra C., Advocate
The presumption under Sections 118 and 139 of the N.I. Act can be rebutted by the accused demonstrating the lack of a legally recoverable debt, shifting the burden back to the complainant to prove the legitimacy of the loan.
Headnote:
N.I. Act - Negotiable Instruments Act, 1881 - Sections 118, 139 - The court discussed the presumption of issuance of cheques under Sections 118 and 139 of the N.I. Act, which places the burden on the accused to rebut the presumption that the cheques were issued for a legally recoverable debt. The court found that the accused successfully rebutted this presumption by challenging the complainant's financial capacity and the legitimacy of the loan, leading to the acquittal of the accused.
Fact of the Case:
The complainant alleged that he lent Rs.6,80,000 to accused Praveen Jain, who issued cheques from himself and his family members for repayment. All cheques were dishonoured due to insufficient funds, prompting the complainant to file complaints under Sec. 138 of the N.I. Act.
Finding of the Court:
The trial court acquitted Priya Jain and Santosh Kumar Jain, while convicting Praveen Jain. However, the Sessions Court later acquitted Praveen Jain, leading to the complainant's appeal. The court found that the presumption under Sec. 118 and 139 of the N.I. Act was rebutted by the accused.
Issues: Whether the cheques were issued towards repayment of a legally recoverable debt and whether the presumption under Sec. 118 and 139 of the N.I. Act was effectively rebutted by the accused.
Ratio Decidendi: The court held that the burden of proof shifted to the complainant after the accused admitted the issuance of the cheques. The accused successfully demonstrated that the complainant lacked the financial capacity to lend the alleged amount, thus rebutting the presumption of the cheques being issued for a debt.
Final Decision: The appeals filed by the complainant were dismissed, and the acquittal of the accused by the trial and Sessions Courts was upheld.
JUDGMENT
1. In these appeals, complainant has challenged the acquittal of respondent/accused for the offence punishable under Sec. 138 of the Negotiable Instruments Act, 1881 (for short, 'N.I.Act').
2. In Crl.A.Nos.280/2012 and 281/2012, challenge is to the impugned judgment and order of the trial Court acquitting the respondent/accused, whereas in Crl.A.No.862/2012, challenge is to the order of the Sessions Court, which reversed the conviction of respondent/accused and acquitted him.
3. For the sake of convenience, in these appeals, the appellant is referred to as complainant and respondents are referred to by their names prefixed by the term accused.
4. The complainant prosecuted these accused in C.C.Nos.6595/2009, 6596/2009 and 6597/2009. Accused Priya Jain and accused-Santosh Kumar Jain are the wife and father of accused Praveen Jain.
5. Since complainant is common, the accused are related to each other and the cheques are allegedly issued by accused towards repayment of loan borrowed by accused-Praveen Jain and involve common discussions, these appeals are clubbed and disposal of by common order.
6. It is the case of the complainant that he and accused Praveen Jain are friends. During February 2006, for his financial needs i.e to meet his business exigency, accused Praveen Jain borrowed a sum of Rs.6, 80, 000.00 from the complainant, promising to repay the same with interest at 5% per month, within one year. However, he did not keep up his promise and on repeated request and demand, he got issued a cheque for Rs.2, 00, 000.00 from his wife i.e., accused-Priya Jain, a cheque for Rs.1, 10, 000.00 from his father i.e., accused-Santosh Kumar Jain and he also issued three separate cheques for Rs.2, 00, 000.00, Rs.20, 000.00 and Rs.1, 50, 000.00. When complainant presented them for realization, all the cheques were dishonoured for want of sufficient funds in the respective accounts. Therefore complainant got issued separate notices to all the accused. Instead of complying with the said notice, the accused have sent untenable reply. Therefore complainant has filed three separate complaints.
7. After due service of notice, accused have appeared through counsel and contested the cases. They have pleaded not guilty to the charges and claimed trial.
8. In order to prove the allegations against the accused, in all the complaints, complainant has examined himself as PW-1. In C.C.No.6595/2009 and C.C.No.6596/2009, he has relied upon Ex.P1 to 10 each. In C.C.No.6597/2009, he has relied upon Ex.P1 to 15.
9. During the course of their statements under Sec. 313 Cr.P.C., the accused have denied the incriminating evidence.
10. In all the three complaints, the accused have examined themselves as DW-1. In C.C.No.6597/2009, the accused has also examined income tax officer as DW2. He relied upon Ex.D1 to 14.
11. Vide the impugned judgment and orders, the trial Court acquitted accused Priya Jain and accusedSantosh Kumar Jain. However, the trial Court convicted Praveen Jain and sentenced him to pay a fine of Rs.5, 50, 000.00 in default to undergo simple imprisonment for six months.
12. Aggrieved by his conviction and sentence, Praveen Jain filed Crl.A.No.107/2012. Vide the impugned judgment and order, the Sessions Court allowed the appeal and acquitted him.
13. Aggrieved by the acquittal of all the accused, complainant is before this Court contending that in the light of the fact that accused admitted that the respective cheques were drawn by them on their account maintained with the banker, it was obligatory on the part of the Courts below to draw presumption under Sec. 118 and 139 of N.I. Act that the Cheques were issued towards repayment of any legally recoverable debt or liability and thereby placing the burden on the accused to rebut the same. In the present case, the accused have failed to rebut the presumption and this fact is not appreciated by the Courts below. The trial Court has also not appreciated the evidence of the income tax officer
