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IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.B. SNEHALATHA, J.
PARAMESWARAN S/O GOPALAN NAIR – Petitioner
Versus
SMITHA SURESH W/O SURESH – Respondent
Crl. Rev. Pet. No. 791 of 2018
Decided On : 29-08-2024
Negotiable Instruments - Section 138, 139 of N.I. Act - The court emphasized the presumption of liability under Section 139, shifting the burden to the accused to disprove the existence of a debt, which influenced the conviction.
Fact of the Case:
The accused borrowed Rs. 5 lakhs from the complainant and issued a cheque which bounced due to insufficient funds. The complainant claimed the cheque was issued in discharge of a debt, while the accused argued it was a blank cheque misused by the complainant.
Finding of the Court:
The court found that the complainant established the loan transaction and the dishonor of the cheque, leading to the presumption of liability under Sections 138 and 139 of the N.I. Act, which the accused failed to rebut.
Issues: Whether the accused issued the cheque in discharge of a legally enforceable debt and whether the presumption under Section 139 of the N.I. Act was applicable.
Ratio Decidendi: The court held that once the cheque and signature are admitted, the presumption under Section 139 applies, shifting the burden to the accused to prove non-existence of debt, which he failed to do.
Result: The Criminal Revision Petition is dismissed, upholding the conviction and sentence of the accused.
ORDER :
1. This Criminal Revision Petition has been filed by the accused in S.T. No. 6/2013 on the file of the Judicial First Class Magistrate Court, Nilambur, assailing the judgment of conviction and sentence in Crl.A No. 44/2016 of the Sessions Court, Manjeri for the offence punishable under Section 138 of The Negotiable Instruments Act, 1881 (hereinafter referred to as N.I Act, 1881).
2. The parties shall be referred to as complainant and accused as before the trial court.
3. The case of the complainant is that in February 2012, the accused who is a relative of the complainant, borrowed an amount of Rs. 5 lakhs from her and in discharge of the said liability, accused issued Ext.P1 cheque dated 30.9.2012 to the complainant. Though the complainant presented Ext.P1 cheque for encashment, it was bounced due to insufficient funds in the account of the accused. In spite of receipt of Ext.P4 lawyer notice sent by the complainant, accused failed to pay the amount covered by the cheque. Accused thereby committed the offence punishable under Section 138 of N.I. Act, 1881.
4. The defence canvassed by the accused is that he had borrowed an amount of Rs. 1 lakh from PW1 Vasudevan, who is the power of attorney holder of the complainant and had issued two blank signed cheque leaves and one blank signed stamp paper by way of security; that Ext.P1 is one among the said signed blank cheque leaves misused by the complainant.
5. PW1 is the power of attorney holder of the complainant. He has testified that he is a close relative of the complainant; that he has personal knowledge regarding the transaction between the complainant and the accused and he has witnessed the transaction between the complainant and the accused. In A.C. Narayanan and another v. State of Maharashtra and another, (2014) 11 SCC 790, the Apex Court held that a power of attorney holder is competent to file, appear, and depose for the purpose of issue of process for the offence punishable under Section 138 of N.I Act, 1881. An exception to the above is when the power of attorney holder does not have personal knowledge about the transaction. According to PW1, accused who is a relative of the complainant approached the complainant in December 2011 demanding a loan of Rs. 5 lakhs for his business purpose; that the complainant lent an amount of Rs. 5 lakhs to the accused by way of cheque dated 21.2.2012. Further version of PW1 is that in discharge of the said liability, accused issued Ext.P1 cheque for Rs. 5 lakhs to the complainant.
6. In order to substantiate the case of the complainant that accused borrowed an amount of Rs. 5 lakhs from her, complainant has produced Ext.P7 namely the statement of account from her bank. Ext.P7 would reveal that on 21.2.2012, the accused encashed a cheque for Rs. 5 lakhs from the account of the complainant. Thus, the case of the complainant that the accused borrowed an amount of Rs. 5 lakhs from her stands proved. The specific case of the complainant is that in discharge of the liability to pay a sum of Rs. 5 lakhs, accused issued Ext.P1 cheque.
7. It is not in dispute that, Ext.P1 is a cheque issued from the account of the accused maintained by him at Chungathara Service Co-operative Bank Ltd. Accused would also admit his signature in Ext.P1 cheque. Undisputably, Ext.P1 cheque was returned dishonoured due to insufficient funds in the account of the accused, Ext.P2 is the memo issued from the Chungathara Service Co-operative Bank Ltd. and Ext.P3 is the memo issued from the SBT, Nilambur Branch. Exts.P1 to P3 would reveal that Ext.P1 cheque was dishonoured due to insufficient funds in the account of the accused. Ext.P4 is the copy of the lawyer notice sent to the accused and its postal receipt. Ext.P5 is the acknowledgement card. It has come out in evidence that in spite of receipt of Ext.P4 notice, accused did not send any reply. If there was no legally enforceable debt as contended by the accused, he could have sent a reply denying the liability. That
The presumption of liability under Section 139 of the N.I. Act shifts the burden to the accused to disprove the existence of a debt, which must be done with credible evidence.
The presumption under Section 139 of the Negotiable Instruments Act favors the complainant, requiring the accused to rebut the presumption of debt, which he failed to do.
The presumption of issuance under Section 139 of the N.I. Act does not place the burden on the complainant, but rather requires the accused to provide evidence to rebut it.
The court upheld that a dishonored cheque creates a presumption of liability unless adequately rebutted, reinforcing the legal principles under Sections 118 and 139 of the Negotiable Instruments Act.
The presumption under Sections 118(a) and 139 of the Negotiable Instruments Act can be rebutted by the accused, leading to acquittal if the complainant fails to prove a legally enforceable debt.
The presumption under Sections 118(a) and 139 of the N.I. Act facilitates favoring complainants in dishonor cases unless convincingly rebutted by the accused.
The main legal point established is the significance of the presumption under Sec. 139 of the N.I. Act and the accused's burden to raise a probable defence to rebut the presumption.
A signed blank cheque, validly handed over by the accused, attracts the presumption under Section 139 of the Negotiable Instruments Act, unless the accused provides evidence to the contrary. The burd....
Once there is no denial of issuance of cheque and signatures thereupon, presumption as available under Ss.118 and 139 comes into play.
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