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2006(2) Bankmann 295
KARNATAKA HIGH COURT
K. Sreedhar Rao, J.
Dr. Sampath Kumar B.V. — Appellant
versus
Ms. Dr. K.G.U. Lakshmi — Respondent
Crl. Appeal No. 1115 of 1999
Decided on 3-2-2006
Counsel for the Parties:
For the Appellant:Mr. K.V. Narasimhan, Advocate.
For the Respondent:Mr. G.V. Dayanand, Advocate.
IMPORTANT POINT
Cheque issued either as security towards loan or towards repayment of loan would not make any difference in the legal consequences on its bouncing.
Headnote:Negotiable Instruments Act, 1881—Section 138—Dishonour of cheque—Defence plea that it was given as security for loan taken by accused and was issued blank—Acquittal by Trial Court—Appeal—Inference by Trial Court that cheque issued was blank was based on no cogent material—Cheque whether issued for repayment of loan or as security would make little difference and legal consequences on its dishonour were same—Respondent accused was liable to be convicted—Cheque was issued for Rs. 75,000/- — Respondent accused sentenced to pay fine of Rs. 1,50,000/- in default to undergo six months imprisonment and if fine released, Rs. 1,40,000/- to be paid to complainant as compensation. (Paras 4 to 6)
Result: Appeal allowed.
K. Sreedhar Rao, J.— The respondent accused is prosecuted by way of a private complaint for committing the offence under Section 138 of the Negotiable Instruments Act, 1881 (for short, ‘the Act’).
2. The gist of the complainant’s case discloses that the accused borrowed a sum of Rs. 75,000/- in connection with film business. The cheque, Ext. P1 was issued towards repayment. When the complainant presented the cheque to the bank, it is dishonoured. Statutory notice is issued as required under Section 138 of the Act. Thereafter, a private complaint is filed. It is the contention of the accused that the cheques have been issued only as security for repayment of the loan and contends that a blank cheque is issued. Therefore, no prosecution can lie under Section 138 of the Act.
3. The complainant has examined himself as PW1 and marked in evidence the dishonoured cheque, copies of notice, postal acknow-ledgements, reply correspondence of the accused. The accused has marked in evidence documents, Exts. D1 to D6. He is neither examined nor any witness in support of his case.
4. The Trial Court with reference to the contents of Ext. D-2, comes to the conclusion that there is an admission on the part of the complainant that a blank cheque is issued. Ext. D-2 is hand-written matter on careful reading, it does not disclose that the relevant word in Ext. D-2 should be read as ‘bank’ and not ‘blank’. Therefore, on such doubtful material, to infer that there is an admission that a ‘blank’ cheque is issued is bad in law.
5. The dismissal of the complaint on the plea that it was issued only as security and therefore no prosecution would lie is again untenable view. A cheque whether issued for repayment of loan or as security makes little difference under Section 138 of the Act. In the event of dishonour, legal consequences are same without distinction. In the present case, issue of cheque, its dishonour and issuance of statutory notice are held to be proved according to the findings of the Trial Court. When once issue of cheque is proved, a presumption under Section 139 of the Act would arise with regard to consideration. The accused has not let in any evidence to rebut the said presumption. In that view, dismissal of the complaint is bad in law and the complainant has successfully proved the guilt and the accused is liable to be convicted under Section 138 of the Act.
6. The accused is sentenced to pay fine of Rs. 1,50,000/- in default to undergo simple imprisonment for a period of six months. Out of the above amount, Rs. 1,40,000/- to be payable to the complainant as compensation and Rs. 10,000/- to be appropriated by the State towards prosecution expenses. The appeal is disposed off accordingly.
Appeal allowed.
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