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2025 Supreme(Kar) 1479

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
C.M. Poonacha, J.
Shri. Ramesh Babugouda Patil - Appellant
Versus 
Shri Jinnappa Devandra Jayakkanavar - Respondent
Criminal Appeal No. 100244 of 2017 (A-)
Decided On : 14-08-2025

Advocates Appeared:
For the Appellant :Sri. Neelendra D. Gunde & Sri. Hanumesh M. Desai, Advocates
For the Respondent:Sri. Praveen S. Pattar, Advocate

The presumption of debt under Section 139 of the Negotiable Instruments Act operates in favor of the complainant, requiring the accused to provide contrary evidence to escape liability.

Headnote:(A) Code of Criminal Procedure, 1973 - Section 378(4) - Negotiable Instruments Act, 1881 - Section 138 and Section 139 - Appeal filed against acquittal for dishonor of cheque - Complainant claimed Rs.5,00,000/- loan given to the accused, cheque dishonored - Trial Court acquitted, citing no clean hands due to undisclosed agreement - Court held acquittal erroneous; presumption of debt under Section 139 applies - Acquittal set aside, accused convicted and fined Rs.10,00,000/- (Paras 1, 23, 24),

(B) Presumption of debt - Legal interpretation of Section 139 underlined as providing reverse onus on accused to disprove debt. (Paras 15, 22)

Facts of the case:
Complainant provided a loan of Rs.5,00,000/- to the accused in November 2008, which was to be repaid in April 2009; cheque issued was dishonored for insufficient funds. (Paras 1-2)

Findings of Court:
The Court emphasized the need to adhere to the presumption of debt under Section 139 of the Act and criticized the trial Court's dismissal due to alleged unclean hands without recognizing existing liability. (Paras 19-22)

Issues: The primary issues pertained to whether the trial Court justified the acquittal and whether the complainant had proven the existence of a legally enforceable debt. (Paras 8, 9)

Ratio Decidendi: Court asserted the trial Court's error in acquittal was due to failing to apply the presumption under Section 139 appropriately. (Paras 19-20)

Result: Appeal allowed; accused convicted of dishonor under Section 138 and sentenced to pay fine.

Table of Content
1. basis of appeal and factual background. (Para 1 , 2 , 4)
2. discussion on the accused's admissions. (Para 6 , 20)
3. court analysis of evidence and presumption. (Para 8 , 9 , 10 , 12 , 14 , 21)
4. interpretation and application of section 139. (Para 15)
5. final order and sentencing. (Para 23 , 24)

JUDGMENT :

C.M. Poonacha, J.

The present appeal is filed under Section 378(4) of the Code of Criminal Procedure, [Hereinafter referred as Cr.P.C.] by the complainant calling in question the judgment dated 01.07.2017 passed in CC No.846/2009 (Old)/CC No.06/2017 (New) by the V-JMFC., Belagavi, [Hereinafter referred as trial court] whereunder the complaint filed by the complainant under Section 200 of Cr.P.C. against the respondent-accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881, [Hereinafter referred as the Act] was ordered upon and the accused was acquitted of the said offence.

2. The relevant facts in a nutshell leading to the present appeal are that the complainant filed a complaint under Section 200 of Cr.P.C., interalia contending that the accused had approached the complainant and requested for hand loan of Rs.5,00,000/- in the month of November-2008 assuring the complainant to repay the same in the month of April, 2009. Having regard to the same, the complainant paid the said sum of Rs.5,00,000/- to the accused. That when the complainant approached the accused in April 2009 and requested for repayment of said amount, the accused issued cheque bearing No.084911 dated 14.04.2009 for Rs.5,00,000/- drawn on State Bank of India, A.D.B.Branch, Belagavi towards repayment of the said loan. That when the said cheuqe was presented for encashment by the complainant, the same was dishonored with the endorsement ”Funds Insufficient”. The complainant got issued legal notice on 21.04.2009 calling upon the accused to repay the amount and the said notice was served on the accused on 24.04.2009 with the postal endorsement as “Refused”. Hence, the complainant filed the complaint.

3. The accused entered appearance before the trial Court and filed a memo dated 30.10.2009, whereunder he under took to pay the amount which is in balance on the next date of hearing. However, since said payment was not made, the proceedings were contested by the accused.

4. The complainant examined himself as PW1. Ex.P1 to P10 were marked in evidence. During the course of cross examination, an agreement dated 26.06.2008 was confronted to PW1 who, having admitted the same, the said agreement was marked as Ex.D1. Accused did not adduce any other evidence. The trial Court considering the material on record, acquitted the accused. Being aggrieved by the same, the present appeal is filed.

5. Heard submissions of the learned counsel Sri.Neelendra D. Gunde, for the appellant-complainant and learned counsel Sri.Praveen S. Pattar, for respondent-accused.

6. It is the contention of the appellant-complainant that the accused having filed a memo on 30.10.2009 before the trial Court undertaking to pay the amount, the trial Court erred in dismissing the complaint. It is further contended that the trial Court erred in dismissing the complaint on the ground that the complainant had not filed the complaint with clean hands since the execution of the agreement dated 26.06.2008 (Ex.D1) was admitted which was not averred in the legal notice or in the complaint. It is further contended that even if the agreement (Ex.D1) was taking count, the same would not be contrary to the case of the complainant that the accused owed money to the complainant. That the accused not having issued any reply to the notice and not having adduced any evidence, since the accused did not dispute that the cheque (Ex.P1) was that of the accused, having regard to the presumption contained under Section 139 of the Act, the trial Court ought not to have dismissed the complaint. Hence, learned counsel seeks for allowing of the above appeal and granting of the reliefs

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