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IN THE HIGH COURT OF JUDICATURE AT MADRAS
V. SIVAGNANAM, J.
Kanakala Satyanarayana – Appellant
Versus
Vungarala Veera Venkata Subrahmanyam – Respondent
Crl. A.No. 86 of 2023
Decided On : 09-03-2023
Negotiable Instruments Act - Dishonour of Cheque - Section 138 - 139 - 118 - 139 - 138 - 139 - 118
Fact of the Case:
The appellant filed a complaint against the respondent for an offence under Section 138 of Negotiable Instruments Act, alleging that the respondent borrowed a sum of Rs.10,00,000/- and issued a cheque which was returned for insufficient funds. The trial Court acquitted the accused based on evidence and previous complaint between the parties.
Finding of the Court:
The trial Court's decision to acquit the accused was upheld as the complainant failed to discharge the burden of proof that the cheque was issued in discharge of a debt or liability. The evidence presented by the accused successfully rebutted the statutory presumptions under Sections 138 & 139 of NI Act.
Issues: The main issue was whether the complainant could prove that the cheque was issued in discharge of a debt or liability, as required under Section 138 of the Negotiable Instruments Act.
Ratio Decidendi: The burden of proof lies on the accused to show that the cheque was not issued in discharge of any debt or liability. To disprove the presumptions, the accused should bring forth facts and circumstances that make the non-existence of the debt or liability probable.
Final Decision: The criminal appeal was dismissed, upholding the trial Court's decision to acquit the accused.
JUDGMENT
`(Prayer: This Criminal Appeal has been filed under Section 378 of Code of Criminal Procedure to set aside the judgment dated 01.08.2022 passed by the Judicial Magistrate, Yanam in S.T.No.77 of 2016 and consequently, allow the complaint in S.T.C.No.77 of 2016 on the file of the Judicial Magistrate, Yanam.)
1. Challenging the impugned order dated 01.08.2022 passed in S.T.No.77 of 2016 by the learned Judicial Magistrate, Yanam, the present criminal appeal has been filed.
2. The appellant is the complainant and the respondent is the accused in S.T.C.No.77 of 2016 on the file of the Judicial Magistrate Court, Yanam. The appellant/complainant filed a complaint against the respondent/accused for an offence under Section 138 of Negotiable Instruments Act. The accused borrowed a sum of Rs.10,00,000/- from the complainant on 27.04.2015. To repay that amount, he gave a cheque dated 30.03.2016 bearing cheque No.275923 for a sum of Rs.10,00,000/- drawn on Indian Bank, Yanam Branch. When it was presented for encashment, it was returned for “insufficient funds” in his account. After issuing legal notice, the complaint has been filed by the complainant.
3. Before the trial Court, the complainant examined himself as PW1 and filed eight documents as Ex.P1 to Ex.P8. The accused examined three witnesses as DW1 to DW3 and filed three documents as Ex.D1 to Ex.D3.
4. After trial, the trial Court acquitted the accused on two grounds that there is a previous complaint dated 02.03.2014 between the complainant and the accused with regard to the money transaction and subsequent payment of Rs.10,00,000/- by the complainant is not believable one and another ground is the defence witness Mr.Durga Prasad (DW2), Manager of State Bank of Hyderabad, Muramulla Branch deposed that on 27.04.2015 the accused was present in Muramullla Branch of State Bank of Hyderabad and applied Demand Draft for his business purpose and it was also evidenced by Ex.D3. Under these circumstances, it was not possible that the accused received amount from the complainant on 27.04.2015 at 1.00 p.m. in the complainant''s residence.
5. The learned counsel for the appellant/complainant submitted that the trial Court has not properly considered the evidence adduced by the complainant and failed to consider the law in favour of the complainant under Section 139 of the Negotiable Instruments Act and it maintained the presumption of law that cheque duly drawn was in discharge of debt or liability. In this case, the accused had not denied his signature in the cheque. The presumption mandated by Section 139 of NI Act not properly rebutted. The complainant filed his bank statement of Account and the income tax returns to support his case but the trial Court has not considered them. The respondent is guilty of dishonour of cheque for the offence under Section 138 NI Act. Thus, pleaded to set aside the acquittal order passed by the trial Court and to punish the respondent/accused.
6. The learned counsel for the appellant/complainant, to support his argument, placed reliance upon the judgment of the Hon’ble Supreme Court in Bir Singh Vs. Mukesh Kumar reported in (2019) 4 Supreme Court Cases 197 and Uttam Ram Vs. Devinder Singh Hudan and another reported in (2019) 10 Supreme Court Cases 287.
7. The learned counsel for the respondent/accused supported the judgment of the trial Court and submitted that the trial Court rightly considered the evidence adduced by the parties. In this case, the complainant specifically stated in his evidence and complaint that the amount has been lent on 27.04.2015 but on that date, the accused was at State Bank of Hyderabad, Muramulla Branch and not possible to meet the complainant and received the amount. Further, there is a dispute between the complainant and the accused earlier and in that regard, a criminal complaint has been given on 02.03.2014 and the matter was enquired by the Yanam Police. Under these circumstances, there was no possibility to lent a sum of Rs.1
The burden of proof, legal presumptions, and the accused's admission of debt in the issuance of the cheque are crucial in determining liability under the Negotiable Instrument Act.
The presumption of debt under Section 139 of the Negotiable Instruments Act is not rebutted by mere denial; the accused must provide credible evidence to support their defense.
The presumption under Section 139 of the NI Act is rebuttable, and the burden of proof lies on the accused to establish a probable defense against the existence of a legally enforceable debt.
The main legal point established in the judgment is the presumption under Section 118 and Section 139 of the Negotiable Instruments Act, the burden of proof on the accused to rebut the presumption, a....
The appellate court has the authority to review evidence in acquittal appeals, but must respect the presumption of innocence and ensure that any findings against the accused are based on substantial ....
The accused can rebut the presumptions under the NI Act by providing a satisfactory explanation and pointing towards his innocence by the standard of preponderance of probabilities.
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