In a prosecution under Section 138 of the Negotiable Instruments Act, once the execution of the cheque is proved, a statutory presumption under Section 139 arises in favor of the complainant, placing the onus on the accused to rebut the same; the complainant's financial capacity need not be independently established if the transaction is otherwise proved.

ORDER

The challenge in this revision petition is directed against the conviction and sentence imposed on the revision petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short, “the N.I. Act”).

2. The revision petitioner is the accused in C.C. No. 51/2010 on the file of the Judicial First Class Magistrate Court -II, Chalakudy.

3. The case of the complainant, in brief, is as follows:

The accused had borrowed ₹1,00,000/- from the complainant.

When the complainant demanded the repayment of the said amount, the accused issued a cheque in favour of the complainant towards the discharge of the aforesaid legally enforceable debt/liability. However, when the said cheque was presented for encashment within its period of validity, it was dishonoured and returned unpaid, stating the reason “Funds Insufficient.” Thereafter, the complainant caused a statutory demand notice to be issued to the accused in compliance with the provisions of Section 138 of the N.I. Act, 1881, informing the accused of the dishonour of the cheque and calling upon her to pay the cheque amount. Despite receipt of the said notice, the accused failed to make payment of the amount covered under the cheque. Thus, the accused is alleged to have committed an offence punishable under Section

138 of the N.I. Act.

4. During the trial, the complainant himself got examined as PW1. The documents produced by the complainant were marked as Exts.P1 to P5, and Exts.X1 to X3 were marked as third-party exhibits. However, no evidence whatsoever was produced on the side of the accused.

5. Upon an appreciation of the oral and documentary evidence on record, the trial court found the accused guilty of the offence punishable under Section 138 of the N.I. Act and convicted her accordingly. The accused was sentenced to undergo simple imprisonment for a period of ten months and to pay a fine of Rs.1,00,000/-. In default of payment of the fine, the accused was directed to undergo simple imprisonment for a period of three months. The fine amount, if realised, was ordered to be paid to the complainant as compensation under Section 357(1)(b) of the Code of Criminal Procedure.

6. Aggrieved by the said judgment, the accused preferred Crl. Appeal No.410/2011 before the Sessions Court. The learned Additional Sessions Judge, Irinjalakkuda, who heard the appeal, allowed the same in part. While confirming the finding of conviction, the appellate court modified the sentence and directed the accused to undergo imprisonment till the rising of the court and to pay a compensation of Rs.1,00,000/-. The compensation amount, if realised, was ordered to be paid to the complainant as compensation under Section 357(3) of the Code of Criminal Procedure. In default of payment of the compensation, the accused was directed to undergo simple imprisonment for a period of one month.

7. Heard the learned counsel appearing for both sides. The records were also perused.

8. The learned counsel for the revision petitioner contended that both the trial court and the appellate court failed to properly appreciate the evidence on record and arrived at a finding of guilt without due application of mind. It was contended that the complainant failed to establish the source of the amount allegedly advanced to the accused. According to the learned counsel, in the absence of any satisfactory evidence demonstrating the complainant's financial capacity to lend such an amount, the very existence of the transaction alleged by the complainant becomes doubtful and cannot be readily accepted. It was further submitted