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2025 Supreme(Online)(KAR) 485
HIGH COURT OF KARNATAKA
MR JUSTICE S RACHAIAH, J
SRI C K MYLARAIAH – Appellant
Versus
SMT DAKSHAYANAMMA – Respondent
CRL.RP 627 of 2017
In cases under Section 138 of the N.I. Act, the complainant need not initially prove financial capacity; the accused must demonstrate lack of liability, especially if the cheque is materially altered.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 and Section 87 - Conviction for dishonor of cheque - Petitioner contended that the cheque was materially altered, thus void - Courts below failed to appreciate evidence regarding financial capacity of complainant and material alteration of cheque - Presumption under Section 139 was raised but not sufficiently rebutted by the accused. (Paras 4, 10, 11, 17)
(B) Burden of Proof - In cases under Section 138, the complainant need not initially prove financial capacity; it is the accused's duty to demonstrate lack of liability. (Paras 10, 11)
Facts of the case:
The petitioner was convicted for issuing a cheque for Rs.1,00,000/- which was dishonored due to insufficient funds. The petitioner claimed the cheque was altered from Rs.1,000/- to Rs.1,00,000/-, and the complainant's financial capacity was not established. (Paras 4, 12, 13)
Findings of Court:
The conviction was unsustainable due to the material alteration of the cheque, which rendered it void. (Paras 17)
Issues: Whether the cheque was materially altered and whether the complainant had the financial capacity to lend the amount. (Paras 4, 10)
Ratio Decidendi: The court held that the cheque was materially altered, thus void, and the conviction was set aside as the presumption under Section 139 was not sufficiently rebutted. (Paras 17)
Result: Criminal Revision Petition allowed; conviction set aside and accused acquitted.
CAV ORDER
This Criminal Revision Petition is filed by the petitioner, being aggrieved by the judgment of conviction and order on sentence dated 23.03.2015 in C.C.No.201/2010 on the file of the Pri. Civil Judge and J.M.F.C., Chikkanayakanahally and its confirmation judgment and order dated 19.04.2017 passed in Crl.A.No.10013/2015 on the file of V Addl. District and Sessions Judge, Tiptur seeking to set aside the concurrent findings recorded by the Courts below, wherein the petitioner/accused was convicted for the offence punishable under Section 138 of Negotiable Instrument Act, 1881 (for brevity, N.I.Act).
2. The ranks of the parties henceforth will be considered as per their rankings before the Trial Court for convenience.
3. Heard Sri.K.S.Jayasimha., learned counsel for the petitioner and Sri. Manjegowda .B.V., for Sri. K.A. Chandrashekar, learned counsel for the respondent.
4. It is the submission of the learned counsel for the petitioner that the petitioner has not borrowed any amount from the complainant at any point of time. In fact, the cheque had been given to the husband of the complainant as he had owed to a sum of Rs.1,000/-. He further submitted that the complainant materially altered the cheque and inserted two zeros and made it as Rs.1,00,000/- and presented for encashment which does not carry any liability as the said negotiable instrument is materially altered.
5. It is further submitted that the financial capacity of the complainant has not been established in the case. Though the complainant has stated that she used to grow areca nut and the same being sold to the accused, the fact remains that there are some contradictions and omissions occurred in her evidence regarding growing of areca nuts. Even though, the accused has established that he had not purchased any areca nut from the complainant, the Courts below have failed to appreciate the same.
6. It is further submitted that though the accused has rebutted the presumption, the burden to prove the case of the complainant has not been shifted in order to secure the ends of justice, interference with the findings of the Courts below is necessary. Making such submissions, the learned counsel for the petitioner prays to allow the petition.
7. Per contra, the learned counsel for the respondent vehemently submitted that the findings of the Courts below in respect of presumption is relevant and proper. In fact, the cheque and the signature have been admitted by the accused. Once it is admitted, the presumption has to be raised. Though the said presumption is rebuttable in nature, the accused has not raised any grounds to rebut the presumption. Mere denial of transaction would not be sufficient to rebut the presumption.
8. Itis further submitted that the evidence of P.W.2 would indicate that the cheque has been returned not on the basis of material alteration but it is for insufficient funds. In case, if the cheque is returned on the basis of material alteration, obviously, the complaint would not have been maintained. In the absence of evidence in respect of material alteration, it is not safe to arrive at a conclusion to that effect. Moreover, the cheque and signature have been admitted by the petitioner and no reply was given by the petitioner/accused. Therefore, findings of the Courts below are appropriate and proper and interference may not be necessary. Making such submissions, the learned counsel for the respondent prays to dismiss the petition.
9. Having heard the learned counsel for the respective parties and perused the findings of the Courts below, it appears that the Trial Court and the Appellate Court have concurrently held that the complainant has proved the case and the presumption as stipulated under Section 139 of N.I. Act has also been raised successfully and opined that the petitioner is liable to pay the cheque amount.
10. Before adverting to the facts of the case, it is relevant to refer the judgment of the Hon’ble Supreme Court for clarity in respect
