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Kerala High Court
Hon'ble K. A. Abdul Gafoor, J.
CRL. A. No. 465 of 2000
Decided on 26-05-2006
R. Sivaraman
Versus
The State of Kerala & Ors.
Counsel :
V. Chitambaresh for Appellant
V. Giri & C. P. Saji (PP) for Respondents
The statutory presumption under Section 138 of the Negotiable Instrument Act places the burden of proof on the accused to rebut the presumption that the cheque was issued for a debt or liability.
Headnote:
Section 138 of the N.I. Act - Loan Repayment - The court held that the statutory presumption under Section 138 of the Negotiable Instrument Act applies when a cheque is bounced due to insufficient funds, and the burden of proving that the cheque was not issued in discharge of a debt or liability lies on the accused. The interested testimony of the accused alone is not sufficient to rebut the presumption.
Fact of the Case:
The appellant advanced a loan to the respondent, who issued a cheque in repayment. The cheque bounced, and the complaint was filed. The respondent claimed to have issued a blank cheque for a smaller amount, but the court found the evidence insufficient to rebut the statutory presumption under Section 138.
Finding of the Court:
The court found that the respondent failed to provide sufficient evidence to rebut the statutory presumption under Section 138, and therefore convicted him for the offence punishable under Section 138. The respondent was sentenced to undergo imprisonment for a day and pay a compensation of Rs.20,000.
Issues: The main issue was whether the respondent could rebut the statutory presumption under Section 138 that the cheque was issued for a debt or liability.
Ratio Decidendi: The court relied on the statutory presumption under Section 138 of the Negotiable Instrument Act, which places the burden of proof on the accused to rebut the presumption that the cheque was issued for a debt or liability.
Final Decision: The respondent was convicted for the offence punishable under Section 138 and sentenced to undergo imprisonment for a day and pay a compensation of Rs.20,000.
An unsuccessful complainant in a case under Section 138 of the N.I. Act is the appellant. According to him he advanced a loan to the respondent. In repayment thereof the respondent issued Ext.P1 Cheque dated 1-9-1996. When presented to the bankers it bounced. Demand for repayment was not acceded to. It was in the above circumstances the complaint was filed. The defence offered was that he had issued a blank cheque on borrowal of only Rs.4500/- on 31-5-1996. The appellant had made use of that cheque for the purpose of this case. Therefore the cheque cannot be stated to be issued in discharge of the liability alleged. It is also submitted that out of the cheque leaves issued and produced as Ext .D1 series only Ext.P1 was made use of on 31 -5-1996 when he is alleged to have availed of a loan of Rs.4500/- from the appellant. These are sufficient circumstances to rebut the presumption if any, that is arising out of issuance of the cheque.
2. The cheque was admittedly issued by the respondent. He is not disputing the signature thereon. The cheque returned for want of sufficient fund in the account maintained by the respondent/accused. There is a statutory presumption available in terms of Section 138 of the Negotiable Instrument Act against him. Thus whether there is sufficient evidence on the defence side in rebuttal of the statutory presumption is the question that is arising for consideration.
3. Apart from the interested testimony of the respondent that he borrowed only Rs.4500/- and in security thereof he gave the cheque, there is nothing else in support of his case. That is not sufficiently strong to rebut the statutory presumption available on the admission of the cheque. The Supreme Court in the decision in K. Bhaskaran v. Sankaran Vaidhyan Balan & Anr. (1999 (7) SCC 510) categorically held that;
"as the signature in the cheque is admitted to be that of the accused, the presumption envisaged under Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act (Negotiable Instruments Act) enjoins on the court to presume that the holder of the cheque received if for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. The trial court was not persuaded to relay on the interested testimony of DW1 to rebut the presumption."
Exactly same is the case here. Apart from the interested testimony of the respondent/ accused as DW1 there is nothing on record in rebuttal there of.
4. The apex court in the decision reported in K.N. Beena v. Muniyappan & Anor. (2001 (8) SCC 458) has also made it clear that;
"Under Section 118, unless the contrary was proved, it is to be presumed that the negotiable instrument (including a cheque) had been made or drawn for consideration. Under Section 139 (Negotiable Instrument Act), the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability."
5. Thus in a complaint under Section 138, the court has to presume that the cheque had been issued for a debt or liability. The presumption is rebuttable. The burden of proving that the cheque had not been issued in discharge of a debt or liability is on the accused. That burden is not discharged in this case as already discussed above.
6. In such circumstances when the cheque is admitted, when it is proved that it bounced for want of sufficient fund in the account maintained by the accused and when the demand for payment of the amount was not acceeded to, necessarily unless the presumption is rebutted, it has to be taken as proved that the respondent had committed an offence punishable under Section 138. Accordingly, he is convicted for the said offence.
7. Any how, taking a lenient view, he is sentenced to undergo imprisonment for a day, until the rising of the court on 10-8-2006. when he shall appear in th
