The court upheld the conviction under Section 138, affirming the statutory presumption in favor of the payee due to insufficient evidence from the petitioner.

(PER: THE HON'BLE MR. JUSTICE K V ARAVIND)

Heard Smt. Sonu Suhel N., learned counsel appearing for the petitioner, and Sri Prashant Mathapati, learned counsel appearing for the respondent.

2. The present criminal revision petition is filed by the accused, challenging the judgment of conviction dated 17.11.2018 passed in C.C. No. 409/2017 by the Court of JMFC-VIII, Belagavi (hereinafter referred to as the ‘Trial Court’), and the judgment dated 05.08.2019 passed in Criminal Appeal No. 355/2018 by the X Additional Sessions Judge, Belagavi (hereinafter referred to as the ‘Appellate Court’), whereby the conviction came to be confirmed.

3. The respondent filed a complaint alleging that he had extended a hand loan of ₹25,000/- to the petitioner, which was liable to be repaid. Towards repayment of the said amount, the petitioner issued a cheque dated 28.10.2008, drawn on Belagavi District Revenue Employees Co-operative Bank Limited, Belagavi. When the cheque was presented for encashment, it was returned with the endorsement “funds insufficient.” The respondent thereafter issued a legal notice dated 09.01.2009, which came to be returned with the postal shara “not claimed.” Consequently, a complaint came to be filed for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ‘N.I. Act’). In support of his case, the respondent examined himself as PW-1 and produced 5 documents, which were marked as Exhibits P-1 to P-5. The petitioner was examined as DW-1 and marked one document as Ex.D-1.

4. The Trial Court, upon consideration of the evidence on record and the submissions advanced by the learned counsel for both parties, convicted the accused for the offence punishable under Section 138 of the N.I. Act and sentenced him to pay a fine of ₹49,000/-.

5. The petitioner, being aggrieved by the judgment of conviction, preferred Criminal Appeal No. 355/2018. The Appellate Court, upon re-appreciation of the evidence and due consideration of the findings recorded by the Trial Court, dismissed the appeal and confirmed the order of conviction.

6. Smt. Sonu Suhel N., learned counsel appearing for the revision petitioner, submits that a loan of ₹40,000/- was availed and the same has been duly repaid. It is contended that the cheque in question was issued as security and not towards discharge of any existing liability. Despite repayment, the respondent failed to return the cheque. It is therefore submitted that there existed no legally enforceable debt or liability as on the date of presentation of the cheque so as to attract the offence under Section 138 of the N.I. Act.

7. Per contra, Sri Prashant Mathapati, learned counsel appearing for the respondent, submits that the petitioner has admitted the issuance of the cheque and his signature thereon. It is further submitted that the statutory presumption under Section 139 of the N.I. Act operates in favour of the respondent/complainant, and the petitioner has failed to raise any probable defence to rebut the said presumption. The contention that the cheque was misused after repayment of the loan has not been established by any cogent evidence.

8. This Court has considered the submissions advanced by the learned counsel for both parties and perused the material available on record.

9. The pleadings of both parties indicate that the loan transaction between the petitioner and the respondent is not seriously in dispute. However, the core issue pertains to whether the cheque in question attracts the provisions of Section 138 of the N.I. Act. It is the petitioner’s contention that a hand loan of ₹25,000/- was advanced by the respondent, and the cheque was issued towards repayment of the said loan. Per contra, the respondent contends that the cheque