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IN THE HIGH COURT OF KARNATAKA
Anil B.Katti, J.
Ismail Mudushedde – Appellant
Versus
Ireen Diana Desa – Respondent
Criminal Revision Petition No. 412 of 2015
Decided On : 10-11-2023
NEGOTIABLE INSTRUMENTS ACT - CHEQUE DISHONOUR - Sections 138, 139, 118, 142 of the Negotiable Instruments Act, 1881 - The court discussed the legal provisions regarding the dishonour of cheques under the Negotiable Instruments Act, emphasizing the statutory presumptions in favor of the complainant when the issuance and signature of the cheque are admitted. The court highlighted that the burden of proof shifts to the accused to rebut the presumption of a legally enforceable debt. The interpretations of the relevant sections established that the complainant had fulfilled all legal requirements, leading to the conclusion that the accused was guilty of the offence.
Fact of the Case:
The accused borrowed Rs. 2,00,000 from the complainant, issuing a cheque for the amount which was later dishonoured due to insufficient funds. The complainant followed legal procedures by sending a demand notice, which the accused did not respond to. The complainant filed a case under Section 138 of the Negotiable Instruments Act after the cheque was dishonoured.
Finding of the Court:
The court found that the complainant had complied with all necessary legal requirements under the Negotiable Instruments Act. The evidence presented supported the claim that the cheque was issued for a legally enforceable debt, and the accused failed to provide sufficient rebuttal evidence to displace the statutory presumption in favor of the complainant.
Issues: Whether the judgments of the lower courts were perverse and whether the accused provided adequate rebuttal evidence against the presumption of a legally enforceable debt.
Ratio Decidendi: The court reiterated that once the issuance and signature of the cheque are admitted, a statutory presumption arises in favor of the complainant regarding the existence of a legally enforceable debt. The burden then shifts to the accused to prove otherwise, which requires a preponderance of probabilities.
Final Decision: The revision petition was dismissed, affirming the lower courts' decisions and the sentence imposed on the accused, which included a fine and compensation to the complainant.
JUDGMENT
1. Revision Petitioner/accused feeling aggrieved by the judgment of First Appellate Court on the file of IV Additional District and Sessions Judge, D.K.Mangaluru, in Crl.A.No.270/2013, dtd. 24/3/2015, confirming the judgment of Trial Court on the file of JMFC-V Court, Mangaluru in C.C.No.1849/2010, dtd. 22/7/2013 preferred this Revision Petition.
2. Parties to the Revision Petition are referred with their ranks as assigned in the Trial Court for the sake of convenience.
3. Heard the arguments of both sides.
4. After hearing both the sides and on perusal of Trial Court Records with judgment of both the Courts below the following points arise for consideration: 1) Whether the impugned judgment under revision petition which confirmed the judgment of the Trial Court is perverse capricious and legally not sustainable and call for any interference by this Court?
5. On careful perusal of the oral and documentary evidence placed on record, it would go to show that complainant and accused are known to each other since several years. Accused demanded hand loan of Rs.2, 00, 000.00 from the complainant on 11/1/2010 with an assurance to repay the same within short span of time. Accused in order to discharge legally enforceable debt issued the cheque bearing No.648977 for Rs.2, 00, 000.00 dtd. 10/8/2010 drawn on Amanath co-operative Bank Ltd. Mangaluru where the accused is maintaining the account. Complainant presented the said cheque for collection through her banker and the same was dishonoured for want of "sufficient fund" in the account of accused in view of Bank endorsement dtd. 11/8/2010 vide Ex.P.2 which was intimated to the complainant by bank vide letter dtd. 12/8/2010 Ex.P.3. Complainant issued demand notice through RPAD dtd. 13/8/2010 Ex.P.4 duly served to the accused vide acknowledgement card Ex.P.5. The demand notice sent to another address of accused returned as not claimed Ex.P.6 and the demand notice taken out from the returned RPAD marked as Ex.P.6(a). Accused on the date of accepting the hand loan dtd. 11/1/2010 executed receipt Ex.P.7. If the above referred documents are perused and appreciated with the oral testimony of PW.1 then it would go to show that complainant has complied all the necessary legal requirement in terms of Sec. 138 (a) to (c) of Negotiable Instruments Act, 1881 (herein after for brevity referred to as "N.I.Act".) and complaint is filed within a period of one month the terms of Sec. 142 of N.I.Act. Complainant out of the above referred evidence on record has proved about issuance of cheque by accused for lawful discharge of debt, the said cheque on its presentation was dishonoured for want of sufficient fund in the account of accused, the demand notice issued by the complainant though served to accused has not replied to the demand notice. Therefore, under these circumstances when the complainant has complied necessary legal requirements in terms of Sec. 138 (a) to (c), then statutory presumption in terms of Ss. 118 and 139 of N.I.Act will have to be drawn.
6. In this context of the matter, it is useful to refer the judgment of Hon'blel Apex Court in APS Forex Services Pvt. Ltd. Vs. Shakti International Fashion Linkers and others reported in AIR 2020 SC 945, wherein it has been observed and held that once the issuance and signature on cheque is admitted, there is always a presumption in favour of complainant that there exist legally enforceable debt or liability. Plea by accused that cheque was given by view of security and same has been misused by complainant is not tenable.
7. It also profitable to refer another judgment of Hon'ble Apex Court in P. Rasiya vs. Abdul Nazer and another reported in 2022 SCC OnLine SC 1131, wherein it has been observed and held that:-
The statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act places the burden on the accused to rebut the presumption of a legally enforceable debt once the issuance and si....
The statutory presumption of a legally enforceable debt under Sections 118 and 139 of the N.I. Act is a critical aspect of cases involving dishonoured cheques, placing the burden on the accused to di....
The statutory presumptions under Sections 118 and 139 of the N.I. Act favor the complainant once the issuance of the cheque is established, placing the burden on the accused to provide credible evide....
The statutory presumption of liability under the Negotiable Instruments Act remains unless the accused provides adequate rebuttal evidence, which was not done in this case.
A signed blank cheque, validly handed over by the accused, attracts the presumption under Section 139 of the Negotiable Instruments Act, unless the accused provides evidence to the contrary. The burd....
The presumption under Section 139 of the Negotiable Instruments Act requires the accused to rebut the existence of a legally enforceable liability for the cheque issued.
The presumption of issuance under Section 139 of the Negotiable Instruments Act requires the accused to prove the contrary if the cheque's signature is admitted, which was not done in this case.
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