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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ANIL B KATTI, J.
Pradeep Kumar H.M., S/o H. Manjunath – Petitioner
Versus
S. Ravikumar S/o H. Sharanappa – Respondent
Criminal Revision Petition No. 597 of 2017
Decided On : 28-11-2023
(A) Negotiable Instruments Act, 1881 - Sections 138, 139, and 142(B) - Revision petition against the judgment of the first Appellate Court confirming the trial Court's decision for dishonor of cheque - Complainant proved issuance of cheque and legal requirements under the Act - Accused failed to provide rebuttal evidence or explanation for cheque issuance - Statutory presumption in favor of complainant upheld. (Paras 5, 6, 10, 12)
(B) Burden of Proof - The burden of proof shifts to the accused once the complainant establishes the issuance of the cheque - The accused must provide evidence to rebut the presumption of liability. (Paras 7, 9)
Facts of the case:
The accused took a loan of Rs.5,00,000/- from the complainant and issued a cheque for the same, which was dishonored. The complainant followed legal procedures for notice and filing the complaint. (Paras 5, 10)
Findings of Court:
The courts below correctly appreciated the evidence, and the statutory presumption under Sections 118 and 139 of the NI Act was applicable, as the accused did not provide sufficient rebuttal evidence. (Paras 12, 13)
Issues: Whether the judgment of the first Appellate Court is perverse and whether interference by the High Court is warranted. (Para 4)
Ratio Decidendi: The court held that the statutory presumption of liability under the NI Act remains unless the accused provides adequate rebuttal evidence, which was not done in this case. (Paras 6, 12)
Result: Revision petition dismissed.
ORDER
Revision petitioner/accused feeling aggrieved by the judgment of first Appellate Court on the file of 1st Additional District and Sessions Judge, Chitradurga in Crl.A.No.20/2017 dated 03.05.2017 by confirming the judgment of trial Court on the file of 1st Additional Senior Civil Judge and JMFC, Chitradurga in C.C.No.134/2015 dated 07.12.2016, 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 on both sides.
4. After hearing the arguments on both sides and on perusal of trial Court records, so also the judgments of both Courts below, the following points arise for consideration:
1) Whether the impugned judgment under revision petition passed by the first Appellate Court in confirming the judgment of Trial Court for the offence under Section 138 of the N.I. Act is perverse, capricious and legally not sustainable?
2) Whether the interference of this Court is required?
5. On perusal of oral and documentary evidence placed on record by complainant, it would go to show that complainant and accused are the residents of same village and they are friends, as such they knew each other. Accused has taken hand loan of Rs.5,00,000/- from the complainant to meet his family necessity and assured to pay the said amount within two and half months. Complainant has paid Rs.5,00,000/- on 01.05.2014. Accused in order to discharge legally enforceable debt, issued cheque bearing No.914949 for Rs.5,00,000/- drawn on State Bank of India, Chitradurga Branch-Ex.P-1. Complainant presented the said cheque for collection through his banker. The same was dishonoured vide Bank endorsement - Ex.P-2. Complainant Bank informed accordingly to the complainant vide Ex.P-3. Complainant issued demand notice dated 04.08.2014 - Ex.P4 through RPAD and postal receipt is produced at Ex.P4(a) and the acknowledgement card at Ex.P4(b). If the above referred documents are perused and appreciated with the evidence of PW-1, then it would go to show that complainant has complied legal requirements in terms of Section 138(a) to 138(c) of Negotiable Instrument Act, 1881 (hereinafter referred to as 'NI Act' for short). Accused inspite of due service of notice, has neither replied to the demand notice nor paid the amount covered under the cheque. Therefore, complainant has filed complaint on 02.09.2014 within a period of one month in terms of Section 142(B) of NI Act. When complainant has proved issuance of cheque with signature of accused on the account maintained by him, then statutory presumption in terms of Section 118 and 139 of NI 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:-
" 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 Section 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
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 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....
When a complainant discharges their initial burden under Sections 138 and 139 of N.I. Act, presumptions in their favor come into play, which can be rebutted by preponderance of probabilities.
The presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act shifts the burden to the accused to disprove the cheque's issuance for a legal liability, which was not s....
A cheque issued for a financial obligation creates a rebuttable presumption of debt under Sections 138 and 139 of the N.I. Act, which the accused failed to contradict.
The presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act applies once a cheque's issuance is admitted, shifting the burden to the accused to rebut this presumptio....
Presumptions under Sections 118(a) and 139 NI Act arise on implicit admission of cheque issuance via cross-examination; accused must rebut with evidence, not mere denial; revisional jurisdiction limi....
The statutory presumptions under Sections 138, 118, and 139 of the Negotiable Instruments Act are critical in dishonour cases, determining the burden of proof.
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