The judgment underscores the principle that once cheque signatures are acknowledged, the burden shifts to the accused to refute presumptions of liability under the Negotiable Instruments Act.

JUDGMENT

The appellant is the complainant in CC No.404/2009 of the Chief Judicial Magistrate's Court, Alappuzha. The complaint was filed alleging commission of offence under Section 138 of the Negotiable Instruments Act by respondents 1 to 3. The allegation in the complaint was that, respondents 2 and 3, in their capacity as partners of the first respondent firm, borrowed Rs.4,00,000/- from the appellant and issued Exts.P1 and P1(A) cheques for Rs.2 Lakhs each towards discharge of the liability. The cheques, on presentation, were dishonoured for insufficiency of funds. Although demand notices were issued, respondents 1 to 3 failed to pay the amount.

2. In order to prove his case, the appellant got himself examined as PW1 and marked Exts.P1 to P5(a) documents. The defence evidence consisted of the oral testimony of DW1, a person claiming to be the Managing Partner of the first respondent firm. By the impugned judgment, trial court acquitted respondents 1 to 3 under Section 255(1) of Cr.P.C, finding the appellant to have failed in adducing evidence to prove the transaction and payment of money to the second and third respondents. The trial court also found the appellant to have failed in proving the execution of the cheque.

3. Learned Counsel for the appellant contended that the findings of the trial court are based on misappreciation of evidence and misunderstanding of law. The finding regarding non-mentioning of the details of the transaction in the complaint or proof affidavit, is assailed by drawing attention to the details stated in paragraph 3 of the complaint. The finding that execution of the cheque was not proved, the interested oral testimony of the complainant alone being available, is assailed on the ground that, once issuance of cheque and affixing of signature is admitted, presumption under Section 139 of the Negotiable Instruments Act will get attracted and burden is on the accused to rebut that presumption. The decisions of the Apex Court inKalamani Tex(M/s.) and Another v. P.Balasubramanian (2021 (5) SCC 283 ) and Rohitbhai Jivanlal Patel v. State of Gujarat (2019 (1) KLT OnLine 31119(SC) are pressed into service in support of the argument. It is contended that the trial court committed another gross mistake by finding that, absence of notice to DW1, the Managing Partner of the first respondent, rendered the complaint unsustainable.

4. The contentions of respondents 1 to 3 could not be heard, since their Counsel is absent.

5. As rightly contended by the Counsel for the appellant, details regarding the transaction and issuance of cheques is stated in the complaint. It is averred in the complaint that, accused 2 and 3 are partners of the first accused firm and are managing its day- to-day business and dealing with all financial transactions jointly. It is stated that the complainant and accused 2 and 3 are close friends and were having financial transactions for many years. For convenience, paragraph 3 of the complaint is extracted hereunder;

“3. While so for the business need, the accused partners of M/s.Koncherry International, Mayithara Market PO, Cherthala, jointly borrowed an amount of Rs.4,00,000/-(Rupees four lakh) from the complainant and towards the consideration accused jointly issued two cheques for Rs.2,00,000/-(Rupees two Lakh) each for the said amount of Rs.4,00,000/- (Rupees four lakh) one cheque bearing No.267668 dated 28/8/2008 and another cheque bearing No.267689 dated 12/1/2009 of the State Bank of Travancore SME Branch Vazhicherry, Alappuzha in favour of the complainant. “

6. Surprisingly, despite the accused not denying issuance of the cheque or their signatures therein, the trial court proceeded to hold that execution of the cheques is not proved. As held in Kalamani Tex(supra), once signature of the accused is established, the reverse onus clause becomes operative and the obligation to discharge the presumption under Section 139 shifts upon the accused. Going by the dictum inBir Singh v. Muke