Presumption under Section 139 of the NI Act is rebuttable and requires foundational proof of debt; mere issuance of a cheque is insufficient for conviction.

JUDGMENT :

RAMACHANDRA D. HUDDAR, J.

This Criminal Appeal is filed under Section 378 (4) of the Code of Criminal Procedure by the complainant being aggrieved by the judgment and order dated 29.03.2012 passed by the II Additional Sessions Judge, Mysuru in Criminal Appeal No.41/2011, whereby, the appellate Court reversed the judgment of conviction and sentence passed by the learned Additional Civil Judge and JMFC, Nanjangud in CC No.79/2008 dated 01.03.2011 and acquitted the accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (`NI' Act for short). The present appeal calls into question the correctness and legality of the said order of acquittal passed by the learned Sessions Judge.

2. The factual matrix that lead to the filing of this appeal is, that the appellant herein who was the complainant before the trial Court had lodged a private complaint under Section 200 of Cr.PC alleging that, the respondent, who was known to him for several years, had borrowed a hand loan of Rs.6 lakhs from him on 20.07.2007. It was alleged that, the said loan was extended without any security based on mutual trust and acquaintance and that the accused had promised to repay the said amount within short time. The complainant contended that, when he demanded repayment of the said amount, the respondent issued a cheque bearing No.293853 dated 25.09.2007 drawn on Viajaya Bank, Nanjangud Br. in favour of the complainant for the said amount. The cheque when presented through the complainant's banker was returned unpaid with an endorsement `insufficient funds'.

3. Thereafter, the complainant caused a statutory legal notice on 2.10.2007 addressed to the accused, calling upon him to make the payment of the cheque amount within the stipulated period as mandated under the provisions of the NI Act. The notice was dispatched by both the RPAD and Under Certificate of Posting. The RPAD was returned unclaimed and UCP was served. Inspite of service, no reply was received and no payment was made, the complainant therefore, filed the complainant under Section 200 of Cr.PC for the offence punishable under Section 138 of the NI Act before the learned JMFC Court, Nanjangud initiating proceedings against the respondent.

4. During the trial, the complainant examined himself and produced various documents including the dishonored cheque and endorsement issued by the bank, legal notice, postal acknowledgement and other supporting material all of which were marked as Ex.P1 to P16. The complainant contended that the issuance of the cheque by the accused and its subsequent dishonour clearly made out the ingredients of the offence under Section 138 of the NI Act. The complainant also submitted that, there existed a legally recoverable debt and since the cheque was issued in discharge of such debt and was returned unpaid, the presumption under Section 139 of the Act was clearly attracted.

5. On the other hand, the accused entered appearance and contested the proceedings. He examined himself as PW.1 and produced exhibits Ex.P1 to P16 and closed evidence. DW.1 PUttaraju was examined as DW.1 and documents D1 to D9 were marked in support of his defence. The defence taken by the accused is that, he was a civil contractor during the period 2001-2002 and used to purchase hardware and building materials from one Shashidhar. In the course of those business transactions, he has issued several signed blank cheques to Shashidhar for the purpose of settling accounts. In those circumstances, one of the cheques was misused by the complainant and that the cheque in question was never