The existence of an enforceable debt is presumed under Section 139 of the NI Act but can be rebutted if the accused raises a probable defence against part of the claim.

ORDER :

1. Heard Sri K. Suresh Desai and Sri Suhas Desai, learned counsel for the petitioner, and Sri Shivaraj S. Balloli, learned counsel for the respondent.

2. This criminal petition is filed by the accused-petitioner assailing the judgment and order dated 03.10.2017 passed in C.C. No.2601/2014 by the Court of the Principal Civil Judge and JMFC, Hubballi (hereinafter referred to as the ‘trial Court’), as well as the judgment dated 27.09.2019 passed in Crl.A. No.123/2017 by the V Additional District and Sessions Judge, Dharwad, sitting at Hubballi (hereinafter referred to as the ‘appellate Court’).

3. The factual matrix of the case is that the complainant and the accused were acquainted with each other. The accused approached the complainant seeking a loan for the purpose of constructing a house and discharging certain private loans, to the extent of Rs. 9,65,000/-. The complainant lent a sum of Rs. 2,65,000/- in cash, Rs. 4,00,000/- by way of bank transfer on 07.12.2013, and a further sum of Rs. 3,00,000/- on 09.12.2013, thus making up a total of Rs. 9,65,000/-. Upon receipt of the said amount, the accused promised to repay the same within six to eight months. After the expiry of the said period, the complainant demanded repayment. Accordingly, the accused issued a cheque bearing No.372083 dated 12.11.2014 for a sum of Rs. 9,65,000/-, drawn on Corporation Bank. The cheque, when presented on 14.11.2014, was dishonoured with the endorsement ‘Funds Insufficient’. The complainant thereafter issued a legal notice dated 21.11.2014, calling upon the accused to make payment within fifteen days of its receipt. The notice was duly served, but no reply was given, nor was the amount paid. Consequently, the complainant lodged a complaint alleging commission of an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘NI Act’).

4. In order to establish his case, the complainant examined himself as PW.1 and produced 6 documents, which were marked as Exs.P1 to P6. The Legal Manager of LIC, Dharwad, was examined as CW.1, and the Postmaster of Navalgund was examined as CW.2, through whom one document was marked as Ex.C1. The statement of the accused was recorded under Section 313 of the Code of Criminal Procedure. The accused examined herself as DW.1 but did not produce any documentary evidence. The trial Court, upon consideration of the testimonies of the witnesses and the material on record, convicted the accused for the offence punishable under Section 138 of the NI Act and sentenced her to pay a fine of Rs. 11,35,000/-, in default of which she was directed to undergo simple imprisonment for a period of six months. Out of the total fine amount, a sum of Rs. 11,25,000/- was directed to be paid to the complainant as compensation, and Rs. 10,000/- was directed to be deposited towards prosecution expenses.

5. Aggrieved by the judgment and order of the trial Court, the accused preferred Crl.A. No.123/2017 before the appellate Court. The appellate Court, upon examination of the material on record, upheld the findings of the trial Court and dismissed the appeal.

6. Sri K. Suresh Desai, learned counsel for the petitioner, submits that the statutory notice of demand was not served on the petitioner. It is further submitted that in November 2013, the petitioner had approached one Sri Shivanand Bidnal for financial assistance to meet her family necessities, and the complainant only facilitated the said transaction. A sum of Rs. 7,00,000/- was paid to the petitioner on two occasions through bank transfer. It is contended that there was no direct financial transaction between the complainant and the petitioner, and the allegation regarding payment of Rs. 2,65,000/- in cash is incorrect.

6.1 It is submitted that the cheque in question was issued as security in favour of Sri Shivanand Bidnal. The learned counsel would further contend that the loan of Rs. 7,00,000/- borrowed from Sri Shivanand Bidnal was repaid in December