The presumption under Section 139 of the N.I. Act can be rebutted by the accused, shifting the burden of proof back to the complainant to establish the existence of a legally enforceable debt.

ORAL JUDGMENT

This appeal is filed by the complainant challenging the judgment of acquittal dated 08.07.2014 passed in C.C.No.524/2008 by the JMFC Vth Court, Mangaluru, whereunder the respondent -accused has been acquitted for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as “N.I. Act” for brevity).

2. The brief facts of the appellant -complainant’s case is that

The appellant –complainant is Public Limited Company doing money lending business. The respondent –accused has availed loan and executed hypothecation agreement with respect to his vehicle KA-19-AC-4047. In order to repay the said amount, the respondent –accused has issued cheque bearing No.978384 dated 27.09.2007 for Rs.3,70,000/-. The appellant –complainant presented the said cheque for encashment and same came to be dishonoured for ‘want of funds’. The appellant has issued legal notice. Inspite of service of notice the respondent – accused did not pay the cheque amount. Therefore, the appellant -complainant has filed private complaint against the respondent –accused for offence punishable under Section 138 of Negotiable Instruments Act, 1881 .

3. Learned Magistrate took cognizance and registered case against the respondent –accused for offence punishable under Section 138 of N.I.Act in C.C.No.524/2008. The plea of the respondent –accused has been recorded. The complainant in order to prove its case has examined its representative as P.W.1 and got marked documents as Ex.P1 to P11. The statement of accused came to be recorded under Section 313 of Cr.P.C. The respondent –accused’ s son who is her GPA holder has examined as D.W.1 and got marked documents as Ex.D1 to D33. Learned Magistrate after hearing on both sides has formulated points for consideration and passed impugned judgment of acquittal. The said judgment of acquittal has been challenged by the complainant in this appeal.

4. Heard learned counsel for the appellant and learned counsel for the respondent.

5. Learned counsel for the appellant would contend that the respondent –accused has admitted availing loan in her reply notice –Ex.P7 wherein it is contended that cheque has been issued at the time of availing loan. As the cheque has been admitted by the respondent –accused the presumption under Section 139 of the N.I Act requires to be drawn that the cheque has been issued for making payment of legally enforceable debt. He further submits that Ex.P10 is the loan cum hypothecation agreement between the appellant and respondent. Ex.P11 is statement of account which indicates that balance amount is Rs.3,73,238.19/-. The cheque has been issued for Rs.3,70,000/- and it is the balance amount. He further submits that learned Magistrate has swayed away by the documents i.e. Ex.D9 to 33 which pertains to the year prior to loan agreement – Ex.P10. He submits that Ex.D3 –Arbitration award produced by the respondent –accused itself indicate the balance amount the same which is mentioned in the Ex.P11 –statement of account. He places reliance on following decisions

1) Dashrathbhai Trikambhai Patel Vs Hitesh Mahendrabhai Patel and Another, Reported in (2023) 1 SCC 578.

2) T. Vasanthakumar Vs Vijayakumari, Reported in 2015 (7) SCJ 130.

3) K.S. Ranganatha Vs Vittal Shetty, Reported in 2022 (1) KCCR 1 (SC).

4) Rangappa Vs Mohan, Reported in AIR 2010 SC 1898.

5) VGP Marine Kingdom Private Limited and Another Vs Kay Ellen Arnold, Reported in (2023) 1 SCC 597.

Placing reliance on said decisions learned counsel for the appellant submits that burden is on the respondent – accused to rebut the presumption drawn under Section139 of N.I Act. The said presumption is not rebutted by the respondent –accused by appropriate evidence. Without considering all these aspects, learned Magistrate erred in passing impugned judgment of acquittal. With this, he prays to allow the appeal and convict the respondent – accused for offence punishable under Section 138 of N.I Act.

6. Learned counsel