The issuance of a negotiable instrument establishes a presumption of liability, shifting the burden to the accused to disprove the debt, as established by Sections 118 and 139 of the N.I. Act.

JUDGMENT :

M.G. UMA, J.

The appellant being the complainant in C.C.No.661/2018, on the file of the learned II Additional Civil Judge and Judicial Magistrate First Class-II, Bidar, (for short ‘the Trial Court’), is impugning the judgment dated 09.02.2022, acquitting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I.Act’).

2. Parties are referred to as per their ranking before the Trial Court for the sake of convenience.

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3. The facts of the case in brief are that the complainant has filed the private complaint in PCR No.24/2018, against the accused alleging commission of the offence punishable under Section 138 of the N.I.Act. It is the contention of the complainant that, it is the registered Cooperative Society, which lends the amount to its various members. In all seven persons including the accused have availed loan under Amullya Loan Scheme from the complainant – Society and they have undertaken to repay the loan amount, with weekly installments. The accused stood as surety to the said group of six members and executed necessary documents. Even though borrowers have obtained the loan with surety of the accused, they have not repaid the loan amount regularly.

4. Towards repayment of the loan amount, accused being the surety issued the cheque as per Ex.P1 for Rs.1,06,360/- on 07.11.2017. When the cheque was presented for encashment, the same was dishonoured as ‘funds insufficient’. The legal notice was issued, calling upon the accused to pay the cheque amount. In spite of service of notice, accused had not repaid the cheque amount, thereby committed the offence punishable under Section 138 of the N.I.Act. Accordingly, private complaint was came to be filed.

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5. The learned Magistrate took cognizance of the offence, registered C.C.No.661/2018 and summoned the accused. The accused had appeared before the Trial Court and pleaded not guilty. The complainant examined PW.1 and got marked Exs.P1 to P7 in support of its contention. The accused cross-examined PW.1 and denied the incriminating materials available on record in her statement under Section 313 of Cr.P.C., but has not led any evidence in support of her defence. The Trial Court after taking into consideration all these materials on record, came to the conclusion that the complainant has not proved the guilt of the accused beyond reasonable doubt and therefore, acquitted the accused. Being aggrieved by the same, complainant is before this Court.

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6. Heard learned counsel Sri Mahantesh Patil appearing for the appellant. The respondent remained unrepresented in spite of service of notice. Perused the materials on record, including the Trial Court records.

7. In view of the contentions urged by learned counsel for the appellant, the point that would arise for my consideration is:

"Whether the judgment of conviction and order of sentence passed by the Trial Court suffers from infirmities and calls for interference by this Court?"

My answer to the above point is in the ‘Affirmative’, for the following:

REASONS

8. It is the contention of the complainant that a group of six members have availed loan from its Society under Amullya Scheme. The accused stood as surety to the said loan. Towards discharge of the loan amount, the accused had issued the cheque bearing No.000004, dated 07.11.2017, which was presented for encashment. The cheque was came to be dishonoured, as there was ‘funds insufficient’. The accused in spite of service of legal notice has not repaid the cheque amount and thereby committed the offence.

9. To prove this contention, the complainant – Society examined its Executive Officer as PW.1. He has filed affidavit reiterating the contention taken in the private complaint and got marked Exs.P1 to P7 to support such contention. Learned counsel for the accused cross- examined the witness at length. It is elicited during cross- examination that each of the borrowers have obtained loan of Rs.20,000/-. The witness stated that