IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
K. SURENDER, J.
B. Babu Rao – Appellant
Versus
Kishore Naidu Durga Manik – Respondent
Criminal Appeal No. 169 of 2020
Decided On : 29-06-2022
Negotiable Instruments Act - Sections 118 and 139 - Indian Contract Act - Section 23 - Post of Technical Fitter - Appointment order - Cheque Dishonoured - Appellant/ complainant and respondent/accused are friends since long time - Complaint informed accused that his son applied for post of Technical Fitter in Midhani Factory, Hyderabad - Respondent/accused promised to provide said job, but asked complainant to pay an amount of Rs. 3,00,000/- for appointment order - However, even after lapse of one year, accused failed to provide job as promised and upon insisting, respondent/accused issued cheque - Complainant issued legal notice and thereafter filed complaint before concerned Magistrate Court - When cheque was drawn not for purpose of securing any debt or liability, but pursuant to an illegal contract of an agreement entered into between the complainant and the accused, it cannot be said that it is a legally enforceable debt and such contracts/agreements are prohibited under law. For said reason, as the cheque drawn was not in support of any debt or liability, the same cannot be legally enforceable.
Findings of the Court:
In above cited judgment accused took an amount of Rs. 10.00 lakhs for providing a job and when he failed to do so, issued a cheque to return said amount - Learned counsel for appellant alternatively submits that case has to be remanded to trial Court for the purpose of providing an opportunity to complainant/appellant to prove his case - In said circumstances, when cheque was drawn not for purpose of securing any debt or liability, but pursuant to an illegal contract of an agreement entered into between complainant and accused, it cannot be said that it is a legally enforceable debt and such contracts/agreements are prohibited under law - For said reason, as cheque drawn was not in support of any debt or liability, same cannot be legally enforceable.
Result: Appeal dismissed.
JUDGMENT :
K. SURENDER, J.
1. Aggrieved by the acquittal of the respondent herein for the offence under Section 138 of Negotiable Instruments Act, the present appeal is filed by the complainant.
2. The facts of the case are that the appellant/complainant and the respondent/accused are friends since long time. The complaint informed the accused that his son applied for the post of Technical Fitter in Midhani Factory, Hyderabad. The respondent/accused promised to provide said job, but asked the complainant to pay an amount of Rs. 3,00,000/- for appointment order. However, even after lapse of one year, the accused failed to provide job as promised and upon insisting, the respondent/accused issued cheque bearing No. 656237 dated 16.09.2015 for Rs. 3,00,000/-.
3. The said cheque when sent for clearance was returned with an endorsement “funds insufficient.” The complainant issued legal notice and thereafter filed complaint before the concerned Magistrate Court. The learned Magistrate after completing the examination of the complainant/P.W.1 and marking Exs.P1 to P6, found the accused not guilty for the reason of the understanding between the complainant and the accused regarding giving the amount for securing job as per se illegal according to Section 23 of the Indian Contract Act and the object of such agreement of securing such job is unlawful. The amount was towards bribe and immoral and also a punishable offence. In the said background, when the cheque was issued consequent to an unlawful agreement, presumption under Sections 118 and 139 of Negotiable Instruments Act, cannot be raised, for which reason, the accused was acquitted.
4. Learned counsel for the appellant submits that irrespective of the reason for which cheque is drawn, once the said cheque is dishonoured on presentation, the court has no other option but to raise a presumption under Sections 118 and 139 of the Negotiable Instruments Act. The trial Court committed grave error in getting into the reasons for which the amount was given as it is not necessary to go into the reasons as to why the amount was given. Since the ingredients of Section 138 i.e. drawing of cheque and the amount not being sufficient to honour the cheque, are satisfied, conviction has to be recorded.
5. Learned counsel for the respondent/accused submits that accepting that the amount of Rs. 3,00,000/- was taken by the respondent/accused, for the purpose of securing a job, the same is illegal and in the absence of there being anything which suggests that the amount was taken as loan, the requirement of a ‘enforceable debt’ is lacking, for which reason, the appeal fails. Further, to draw a presumption under Section 139 of Negotiable Instruments Act, there is an initial burden on the complainant to prove that the same is legally enforceable debt. He relied on the judgment of Karnataka High Court in the case of R. Parimala Bai vs. Bhaskar Narasimhaiah, wherein it is held as follows:
SupremeToday
Burden of proving that a chqeue has not been issued for debt or liability is on the accused, after the initial burden is discharged.
The complainant must prove that the cheque was issued for a legally enforceable debt or other liability to establish an offense under Section 138 of the Negotiable Instrument Act.
The presumption under Section 139 of the NI Act is rebuttable, transferring the burden to the complainant if sufficient evidence creates doubt in the case.
The presumption of liability under Section 139 of the Negotiable Instruments Act requires the accused to prove non-existence of debt, influencing the court's conviction decision.
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.
Dishonour of cheque – Accused had to prove by cogent evidence that there was no debt or liability.
The court established that once a cheque is issued and signed, a legal presumption exists regarding its use for a valid debt, shifting the burden of proof to the accused to deny its validity.
Point of Law : Dishonour of Cheque – Acquittal under - complainant has failed to prove even the execution of the cheque since his very specific case that it was a cheque written using a pen in his pr....
Presumption under Section 139 of the Negotiable Instruments Act requires the accused to present credible evidence to rebut the holder's claim of legal liability regarding the cheque issued.
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