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IN THE HIGH COURT OF KARNATAKA
S.Rachaiah, J.
G.V. Shashikala – Appellant
Versus
Giriyappa – Respondent
Criminal Appeal No. 648 of 2017 (A)
Decided On : 02-11-2023
NEGOTIABLE INSTRUMENTS ACT - CHEQUE DISHONOUR - Sections 138, 139 - The court discussed the provisions of Sections 138 and 139 of the Negotiable Instruments Act, emphasizing that once the execution of a cheque is admitted, a presumption arises that it was issued for a legally enforceable debt. The court highlighted that this presumption is rebuttable and the burden lies on the accused to provide evidence to counter it. The failure of the accused to provide sufficient evidence led to the court's decision to uphold the trial court's conviction.
Fact of the Case:
The complainant lent Rs. 2,50,000 to the accused, who issued a cheque as security. The cheque was dishonoured due to insufficient funds. Despite multiple presentations and a legal notice, the accused did not repay the amount, leading to a complaint under Section 138 of the Negotiable Instruments Act.
Finding of the Court:
The appellate court's acquittal was found to be erroneous as it failed to acknowledge the presumption under Section 139 of the N.I. Act. The trial court's conviction was upheld based on the evidence that the cheque was issued for a legally enforceable debt.
Issues: Whether the presumption under Section 139 of the N.I. Act was properly applied and whether the accused provided sufficient evidence to rebut this presumption.
Ratio Decidendi: The court reiterated that the presumption of a cheque being issued for a legally enforceable debt arises once the execution is admitted. The accused must provide cogent evidence to rebut this presumption, which was not done in this case.
Final Decision: The criminal appeal was allowed, the appellate court's judgment was set aside, and the trial court's conviction was confirmed.
JUDGMENT
1. This appeal is filed by the appellant / complainant being aggrieved by the judgment and order of acquittal dtd. 3/2/2017 in Crl.A.No.1248/2016 on the file of LXVII Additional City Civil and Sessions Judge at Bengaluru.
2. The rank of the parties in the Trial Court henceforth will be considered accordingly for convenience. Brief facts of the case are as under:-
3. The accused was introduced to the complainant through her brother Sri G.V.Jagadish and one of her family members namely Sri.Seetharam. It is stated that, the accused had borrowed Rs.2, 50, 000.00 from the complainant and agreed to repay the said amount within one month and issued a cheque dtd. 10/6/2013 as a security. When the stipulated time was over, the complainant informed the accused and demanded the amount. However, the accused instructed the complainant to present the said cheque for encashment in the third week of August, 2013. Considering the request, the cheque was presented on 22/8/2013. However, the said cheque was dishonoured with a shara as 'Funds insufficient'. Immediately, the fact was made known to the accused. Again the accused requested the complainant to present it again. Accordingly, the cheque was presented on 6/9/2013. However, the said cheque was dishonoured with the same shara as it was received earlier. A notice was issued to the accused on 17/9/2013. Notice was served to the accused on 17/10/2013. Thereafter, the accused requested the complainant and issued fresh cheque dtd. 21/9/2013 for the said amount. Again, the second cheque was presented for encashment on the same day, however, it was also dishonoured with a shara 'funds insufficient' and the complainant has received Bank Memo on 23/9/2013. Hence, notice was issued on 5/10/2013 and it was served on 17/10/2013. In spite of receipt of legal notice, the accused did not reply or comply the notice. Hence, complaint has been lodged before the jurisdictional Magistrate for the offence under Sec. 138 of the Negotiable Instruments Act (for short 'N.I. Act'). The jurisdictional Magistrate took cognizance of the offence and proceeded with the case.
4. To prove the case of the complainant, the complainant examined himself as PW.1 and got marked 8 documents as Exs.P1 to P8. On the other hand, the respondent examined himself as DW.1 and got marked 12 documents as Ex.D1 to D12. The Trial Court after considering oral and documentary evidence on record, recorded the conviction. However, in the appeal, the judgment of conviction was set aside.
5. Heard Sri.M.K.Venkatramana, learned counsel for the appellant and Sri.C.N.Naganna, learned counsel for respondent.
6. It is submission of learned counsel for the appellant that the findings of the Appellate Court in recording the acquittal is against the evidence and law, therefore, the same is liable to be set aside.
7. It is further submitted that the findings of the Appellate Court in recording the acquittal are not acceptable for the reason that, the issuance of the cheque and signature both have been admitted by the accused. The accused has not led any rebuttable evidence to rebut the presumption. The contention of the accused is that, he was working as Secretary at Mantapa Gram Panchayath, Anekal Taluk and his wife was running business in the name and style as M/s Shambhavi Home Products. In addition to the work as a Secretary, he stated to have running Diary Farm and also having 15 acres of land at Gubbi Taluk. The Trial Court after considering the evidence of DW.1 and opined that even though, the accused is having sufficient means, the issuance of the cheque to the complainant other than the legally enforceable debt or liability has not been proved. However, the Appellate Court failed to take note of the same and recorded the acquittal which is erroneous and perverse and therefore, the same is liable to be set aside.
8. It is further submitted that the Trial Court has failed to raise a presumption which is envisaged under Sec. 139 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 for a legally enforceable debt, and the burden to rebut t....
The main legal point established in the judgment is the significance of the accused raising a probable defense to rebut the presumption under Section 139 of the N.I. Act, and the requirement for the ....
The presumption of issuance for repayment under Section 139 of the N.I. Act can be rebutted by the accused with sufficient evidence.
The accused can rebut the presumption in favor of the complainant by raising a probable defense, and the burden of proof shifts to the complainant in such cases.
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 appellant must establish the monetary transaction and discharge the initial burden to raise the presumption under sec. 139 of N.I. Act to succeed in a case under sec. 138 of N.I. Act.
The accused can rebut the presumptions under the NI Act by providing a satisfactory explanation and pointing towards his innocence by the standard of preponderance of probabilities.
The presumption under Section 139 of the NI Act is rebuttable, transferring the burden to the complainant if sufficient evidence creates doubt in the case.
Presumption of legally enforceable debt arises upon admission of cheque by the accused; failure to rebut results in liability for cheque dishonor.
The main legal point established in the judgment is the presumption under Section 139 of the NI Act, the burden of proof on the accused to rebut the presumption, and the requirement for the accused t....
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