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IN THE HIGH COURT OF KARNATAKA
G.Basavaraja, J.
Yelahanka Merchants Finance Company – Appellant
Versus
Savitha – Respondent
Criminal Appeal No. 1342 of 2019 (A)
Decided On : 02-11-2023
CHEQUE DISHONOUR - NEGOTIABLE INSTRUMENTS ACT - Sec. 138, Sec. 139 of NI Act, Sec. 200, Sec. 391 of Cr.P.C. - The court discussed the provisions of Sec. 138 of the Negotiable Instruments Act, which penalizes dishonour of cheques, and Sec. 139, which creates a presumption in favour of the holder of the cheque regarding the existence of a debt. The court emphasized the necessity for the complainant to establish the existence of a legally recoverable debt, which was not sufficiently proven in the trial court. The court's decision to allow additional evidence under Sec. 391 of Cr.P.C. reflects the importance of ensuring that all relevant evidence is considered in determining the case.
Fact of the Case:
The Appellant/Complainant filed a complaint against the accused for dishonour of a cheque under Sec. 138 of the Negotiable Instruments Act. The trial court acquitted the accused, stating that the complainant failed to prove the existence of a loan and the amount due.
Finding of the Court:
The court found that the trial court had erred in its judgment by not considering all evidence and documents presented by the complainant. The court noted that the complainant had established the essential ingredients of Sec. 138 but lacked proof of the exact amount due and the loan's existence.
Issues: 1. Whether the Appellant/Complainant has made out a case to interfere with the impugned judgment? 2. Whether the application under Sec. 391 of Cr.P.C. for additional evidence should be allowed?
Ratio Decidendi: The court held that the complainant must prove the existence of a legally recoverable debt to invoke the presumption under Sec. 139 of the NI Act. The failure to produce sufficient evidence regarding the loan and the amount due negated the presumption, leading to the acquittal of the accused.
Final Decision: The appeal was allowed, the trial court's order was set aside, and the matter was remanded back to the trial court for the opportunity to adduce additional evidence.
JUDGMENT
1. Heard learned counsel for appellant.
2. This appeal is preferred by the Appellant/Complainant against the order dtd. 28/6/2019 passed by the XXV Addl. Chief Metropolitan Magistrate, Bengaluru in CC No.21929/2016.
3. Brief facts of the case : Appellant/Complainant had filed a complaint against the accused persons under Sec. 200 of Cr.P.C. for dishonour of cheque, which is punishable under Sec. 138 of Negotiable Instruments Act (for short hereinafter referred to as 'NI Act'). The trial Court has taken cognizance and a case came to be registered in CC No.21929/2016 on the file of XXV Addl. C.M.M., Bengaluru.
4. To substantiate his case the Appellant/Complainant examined himself as PW1 and got marked 23 documents marked as Ex.P1 to P23 and closed his side. Statement under Sec. 313 of Cr.P.C. was recorded and accused did not adduce any evidence on his behalf, but got marked one sale deed as Ex.D1.
5. On hearing both sides, the trial Court acquitted the accused for the offence punishable under Sec. 138 of NI Act. Being aggrieved by the judgment of acquittal passed by the trial Court Appellant/Complainant has preferred this appeal.
6. Learned counsel for Appellant/Complainant submitted that the Appellant/Complainant has proved the essential ingredients of Sec. 138 of NI Act by producing oral and documentary evidence. Accused has not adduced any evidence to rebut the statutory presumption under Sec. 139 of NI Act. However, the trial Court has observed in Page-12 to the effect that the Appellant/Complainant has not produced any documents to establish the fact that when exactly the accused has become defaulter and from what date the interest has been calculated. Further, the trial Court observed that the Complainant has failed to establish the fact of granting loan of Rs.65.00 lakhs and therefore, on all these grounds it is not possible to hold that the accused is guilty of the offence.
7. The Appellant/Complainant in this appeal has filed an application in IA No.2/2019 under the provisions of Sec. 391 of Cr.P.C. seeking the permission to lead additional evidence. Appellant/Complainant sought permission to adduce additional evidence to substantiate his case, if the matter is remanded back to the trial Court. Hence, he seeks to allow this appeal and remand the matter to the trial Court.
8. Though notice is served on the respondent, she remained unrepresented.
9. Having heard the learned counsel for Appellant/Complainant and on perusal of the records, the following points arise for my consideration:
(c) What order?
10. My answer to the aforesaid points are :
11. On perusal of the impugned judgment, it is clear that the accused has issued a cheque in favour of the Appellant/Complainant for a sum of Rs.37, 17, 100.00 dtd. 19/7/2016. The same on presentation for encashment, was dishonoured on 21/7/2016. The Appellant/Complainant has issued a legal notice dtd. 9/8/2016 to the accused calling upon her to make the payment as demanded. The same was served on the accused on 10/8/2016. But there was no reply to the notice issued by the Appellant/Complainant by the accused. Hence, the Appellant/Complainant filed a complaint under Sec. 200 Cr.P.C. against the accused on 15/9/2016. Accordingly, the Appellant/Complainant has proved the essential ingredients of Sec. 138 of NI Act except the Explanation of Sec. 138 of NI Act, as opined by the trial Court.
12. The trial Court in the impugned order at Para-12 and 13, has observed as follows:
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the accused must raise a probable defense to contest the existence of a legally enforceable debt.
The presumption of liability under Section 139 of the Negotiable Instruments Act is rebuttable, and the accused must provide evidence to counter it; failure to do so results in conviction.
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
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.
The main legal point established in the judgment is the rebuttable nature of the presumption in favor of the holder of a cheque under Sections 118 and 139 of the N.I. Act, emphasizing the burden of p....
Dishonour of cheque – As soon as complainant discharges burden to prove that instrument was issued by accused for discharge of debt, presumptive device under Section 139 of Act helps shifting burden ....
The presumptions under Sections 118 and 139 of the Negotiable Instruments Act are conditional upon the complainant first establishing the underlying transaction. A complainant lacking direct knowledg....
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