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IN THE HIGH COURT OF KARNATAKA
Anil B.Katti, J.
B.K. Krishnamurthy – Appellant
Versus
G.L. Rajashekar – Respondent
Criminal Revision Petition No. 85 of 2015
Decided On : 08-11-2023
N.I. Act - Cheque Dishonour - Sections 138, 118, 139, 142 - The court discussed the provisions of Sections 138, 118, 139, and 142 of the Negotiable Instruments Act (N.I. Act), emphasizing the statutory presumptions in favor of the complainant regarding the existence of a legally enforceable debt upon the issuance of a cheque. The court highlighted that the burden of proof shifts to the accused to rebut this presumption, which they failed to do. The court's decision was influenced by precedents that established the necessity for the accused to provide credible evidence to counter the complainant's claims, ultimately affirming the complainant's position.
Fact of the Case:
The accused sought revision against the appellate court's judgment confirming the trial court's ruling that he had committed an offence under Section 138 of the N.I. Act for issuing a cheque that was dishonored due to 'account closed'. The complainant had lent the accused Rs. 1,50,000, for which the cheque was issued as repayment.
Finding of the Court:
The court found that the complainant had fulfilled all legal requirements under the N.I. Act, including timely filing of the complaint and issuing a demand notice. The statutory presumptions under Sections 118 and 139 were applicable, and the accused failed to provide sufficient rebuttal evidence to displace these presumptions.
Issues: Whether the appellate court's judgment was perverse and whether the accused provided adequate evidence to rebut the statutory presumptions in favor of the complainant.
Ratio Decidendi: The court reiterated that once the issuance and signature on the cheque are admitted, a statutory presumption arises in favor of the complainant regarding the existence of a debt. The accused bears the burden to prove otherwise, which he failed to do by not providing independent evidence or adequately challenging the complainant's testimony.
Final Decision: The revision petition was partly allowed; the six-month imprisonment sentence was set aside, but the fine imposed by the trial court was confirmed.
JUDGMENT
1. Revision Petitioner/accused feeling aggrieved by the judgment of First Appellate Court on the file of III Fast Tract Court, Bengaluru Rural District in Criminal Appeal No.77/2012 dtd. 30/8/2014 confirming the judgment of Trial Court on the file of Chief Judicial Magistrate in Criminal Case No.548/2009 dtd. 25/8/2012 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 the arguments of both sides and on perusal of the Trial Court records, including the judgment of both the courts below, the following point arise for consideration:
5. On careful perusal of oral and documentary evidence placed on record by complainant, it would go to show that accused being the friend of complainant approached for hand loan of Rs.1, 50, 000.00. Complainant has paid an amount of Rs.1, 50, 000.00 in cash in the month of June, 2008. Accused, in order to discharge the said legally enforceable debt, issued cheque bearing No.187751 dtd. 22/9/2008 drawn on ING Vysya Bank, Avenue Road branch, Bengaluru for Rs.1, 50, 000.00. Complainant presented the said cheque through his banker and the same was returned with bank endorsement as "account closed" vide endorsement dtd. 27/9/2008 Ex.P.2. Complainant issued demand notice dtd. 24/10/2008 Ex.P.3 through "RPAD". Notice is served to the accused vide acknowledgement Ex.P.4. Accused has replied to the said notice dtd. 21/11/2008 Ex.D1.
6. If the above referred documents are perused and appreciated with the oral testimony of the complainant, it would go to show that complainant has complied with all the legal requirements for the offence under Sec. 138 of the N.I. Act in terms of Sec. 138 (a) to (c) and the complaint is filed in time within a period of one month in terms of Sec. 142(b) of the N.I. Act. Therefore, statutory presumption in terms of Ss. 118 and 139 of the N.I. Act will be have to be drawn in favour of the complainant.
6. In this context of the matter, it is useful to refer the judgment of Hon'ble 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 way of security and same has been misused by complainant is not tenable. It is 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:- "Once the initial burden is discharged by the complainant that the cheque was issued by the accused and signature of accused on the cheque is not disputed, then in that case, the onus will shift upon the accused to prove the contrary that the cheque was not for discharge of any debt or other liability. The presumption under Sec. 139 of N.I. Act is statutory presumption and thereafter, once it is presumed that the cheque is issued in whole or in part of any debt or other liability which is in favour of the complainant/holder of the cheque, in that case it is for the accused to prove the contrary."
In view of the principles enunciated in the aforementioned two judgments of Hon'ble Apex Court, it is evident that when once issuance of cheque with signature of accused on the account maintained by him is admitted or proved then statutory presumption in terms of Sec. 118 and 139 of N.I. Act will have to be drawn.
7. It is now upto the accused to prove by way of rebuttal evidence to displace the statutory presumption available in favour of the complainant. In this cont
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 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 presumption of liability under the Negotiable Instruments Act remains unless the accused provides adequate rebuttal evidence, which was not done in this case.
The presumption under Sections 138 and 139 of the Negotiable Instruments Act mandates that once a cheque's issuance is admitted, it is presumed to be for a legally enforceable debt, shifting the burd....
Revisional jurisdiction limited; no reappreciation of evidence absent perversity. NI Act presumptions u/ss 118,139 arise on cheque admission; accused must rebut with evidence. No initial complainant ....
The main legal point established is the significance of the presumption under Sec. 139 of the N.I. Act and the accused's burden to raise a probable defence to rebut the presumption.
Signature admission on cheque triggers Sections 118(a),139 NI Act presumption of debt discharge; accused must rebut by evidence, mere denial insufficient; revisional jurisdiction limited, no interfer....
Signature admission on cheque raises presumption of debt under NI Act; accused must rebut by preponderance even if blank security cheque; revisional jurisdiction limited, upholds concurrent findings ....
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