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SUPREME COURT OF INDIA
ASHOK BHUSHAN, K.M. JOSEPH, JJ.
BASALINGAPPA – APPELLANT
VERSUS
MUDIBASAPPA – RESPONDENT
CRIMINAL APPEAL No. 636 of 2019 (Arising Out of SLP(Criminal) No. 8641 of 2018)
Decided on : 09-04-2019
(1973) 2 SCC 808; (1999) 3 SCC 35; (2006) 6 SCC 39; (2008) 4 SCC 54; (2009) 2 SCC 513; (2010) 11 SCC 441 – Relied upon
(2018) 8 SCC 165 – Distinguished
(b) Negotiable Instruments Act, 1881 – Sections 118 and 139 – Rebuttal of presumption – Standard of proof is preponderance of probabilities – Accused not required to examine himself – Section 139 imposes an evidentiary burden and not a persuasive burden – Presumption of date of loan/debt/liability as the date of cheque – Instantly cheque drawn on 27.02.2012 and presented on 01.03.2012 but complainant stating he gave loan in November, 2011 – Presumption u/s 139 rebutted. (Para 18, 23, 26)
(c) Negotiable Instruments Act, 1881 – Sections 138 and 139 – Aaccused admitting his signature on the cheque – Complainant not proving his financial capacity – Acquittal of accused by trial court not perverse. (Para 24, 25)
(d) Negotiable Instruments Act, 1881 – Sections 138 and 139 – Evidence indicating that complainant paid out Rs.18 lacs in two years – on the complainant not being able to proving his financial capacity to do so trial court acquitting accused – Cannot be said to be perverse – Court cannot insist on a person to lead negative evidence – High court, without examining evidence led by defence, holding trial court judgment as perverse – Not sustainable. (Para 28, 29)
(2009) 10 SCC 636 – Relied upon
Facts of the case:
A complaint was filed alleging that the accused requested the complainant to lend a hand loan to meet out urgent and family necessary for a sum of Rs. 6,00,000/-. Complainant lent hand loan of Rs. 6,00,000/-dated 27.02.2012 in favour of the accused. A cheque dated 27.02.2012 for Rs. 6,00,000/-was given by the accused, but the same was returned by the bank with the endorsement "Funds Insufficient" on 01.03.2012.
The trial court acquitted the accused for the offence under Section 138.
The High Court set aside the judgment of the trial court and convicted the accused for the offence under Section 138.
Finding of the Court:
Acquittal by trial court was not perverse.
Result: Appeal allowed.
Based on the provided legal document, here are the key points regarding the case:
Case Details * Case Name: Basalingappa vs. Mudibasappa * Court: Supreme Court of India * Judges: Ashok Bhushan, K.M. Joseph, JJ. * Criminal Appeal No.: 636 of 2019 (Arising Out of SLP(Criminal) No. 8641 of 2018) * Date Decided: 09-04-2019 * Subject: Negotiable Instruments Act - Presumptions and Burden of Proof * Acts Referred: Criminal Procedure Code (S.378(4)), Evidence Act (S.4, S.3), Negotiable Instruments Act (S.138, S.139, S.118, S.118(a), S.42) (!)
Important Legal Principles * The presumption under Section 139 is rebuttable on a preponderance of probabilities. * The Court cannot insist on a person to lead negative evidence. (!) * An accused is not required to examine himself to discharge the burden of proof. (!) * Section 139 imposes an evidentiary burden on the accused, not a persuasive burden. (!) * It is not necessary for the accused to disprove the existence of consideration by way of direct evidence. (!) * Even evidence adduced on behalf of the complainant can be relied upon by the accused to raise a probable defense. (!)
Facts of the Case * The complainant alleged that the accused requested a hand loan of Rs. 6,00,000/- for urgent family necessities. * A cheque dated 27.02.2012 for Rs. 6,00,000/- was issued by the accused but returned by the bank with the endorsement "Funds Insufficient" on 01.03.2012. * The complainant stated the loan was given in November 2011, while the cheque was dated 27.02.2012. * The trial court acquitted the accused, finding that the complainant failed to prove his financial capacity to lend such a large amount. * The High Court set aside the acquittal and convicted the accused. * The Supreme Court allowed the appeal, restoring the trial court's acquittal. (!)
Arguments and Findings * Defense Argument: The accused raised a probable defense questioning the complainant's financial capacity. The complainant was a retired employee (retired in 1997) who had encashed retirement benefits of Rs. 8,00,000/-. Evidence on record indicated the complainant had paid out approximately Rs. 18 lakhs in two years to various persons, raising doubts about his ability to lend Rs. 6,00,000/- without proper documentation. (!) * Prosecution Argument: The signature on the cheque was admitted, raising a presumption under Section 139 that it was for a legally enforceable debt. The accused failed to prove any probable defense. (!) * Supreme Court Finding: The Supreme Court held that the trial court's finding was not perverse. The accused successfully raised a probable defense by casting doubt on the existence of a legally enforceable debt through the complainant's lack of financial capacity evidence. The High Court erred in setting aside the acquittal. (!)
Result * Appeal allowed. * Judgment of the High Court set aside. * Judgment of the trial court (acquittal) restored. (!)
JUDGMENT :
ASHOK BHUSHAN, J.
1. This is an appeal by accused challenging the judgment of the High Court of Karnataka dated 04.07.2018 by which judgment the Criminal Appeal filed by the complainant against the acquittal of the accused has been allowed and the accused has been convicted under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to fine of Rs. 8,00,000/-, in default of which to undergo simple imprisonment for three months.
2. The brief facts of the case for deciding the appeal are:-
2.1 The complainant gave a notice dated 12.03.2012 to the accused, the appellant stating dishonour of cheque dated 27.02.2012 for an amount of Rs. 6,00,000/-for want of sufficient funds. Thereafter, on non-payment of the amount, a complaint dated 25.04.2012 was filed by the complainant under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "Act, 1881).
2.2 Allegation in the complaint was that the accused requested the complainant to lend a hand loan to meet out urgent and family necessary for a sum of Rs. 6,00,000/-. Complainant lent hand loan of Rs. 6,00,000/-dated 27.02.2012 in favour of the accused. A cheque dated 27.02.2012 for Rs. 6,00,000/-was given by the accused, but the same was returned by the bank with the endorsement "Funds Insufficient" on 01.03.2012.
2.3 After notice dated 12.03.2012, which was served on the accused on 13.03.2012, a complaint was filed. PW1 filed his examination-in-chief and was also cross-examined on behalf of the accused. The complainant in support of the complaint filed original cheque dated 27.02.2012, original cheque return memo dated 01.03.2012, office copy of the notice dated 12.03.2012, postal receipt dated 12.03.2012, acknowledgment letter issued by the Department of Post dated 16.04.2012 and letter to Head Post Office dated 11.04.2012. The accused in support of his defence filed Ex.D1 - certified copy of plaint in O.S. No. 148 of 2011, Ex.D2-Certified copy of the private complaint No. 119/2012 in Case Referred : No. 2298 of 2012 and in Ext.D3, certified copy of registered sale agreement.
2.4 The trial court framed following two questions:-
1. Whether the complainant proves beyond all reasonable doubts that, the accused had issued a cheque bearing No. 839374 dated 27-02-2012 for Rs.6,00,000/- of Pragathi Gramin Bank, Nijalingappa Colony Branch, Raichur in favour of complainant, towards discharge of legally enforceable debt or liability and the same was dishonored for ' Funds Insufficient' and even after deemed legal notice the accused has not paid the debt covered under the above said cheque and thereby committed an offence punishable Under Section 138 of Negotiable Instruments Act?
2. What Order?
2.5 The trial court after considering the evidence and material on record held that if the accused is able to raise a probable defense which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. By judgment dated 20.02.2015, the accused was acquitted for the offence under Section 138. Complainant aggrieved by said judgment filed a Criminal Appeal under Section 378(4) of Code of Criminal Procedure. The High Court set aside the judgment of the trial court and convicted the accused for the offence under Section 138. Accused aggrieved by judgment of the High Court has come up in this appeal.
3. Shri S.N. Bhat, learned counsel for the appellant submits that accused has successfully rebutted the presumption under Section 139 and has raised probable defence, which was accepted by the trial court after considering the material on record. The High Court erred in setting aside the acquittal order. The accused has questioned the financial capacity of the complainant and without there being any proof of financial capacity, the High Court erred in observing that judgment of the trial court is perverse. It is submitted that burden of proof on accused under Section 138 is not a heavy burden as is on a prosecution to prove the offence
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