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SUPREME COURT OF INDIA
N.V. RAMANA, CJI., SURYA KANT, A.S. BOPANNA, JJ.
Triyambak S. Hegde – Appellant
Versus
Sripad – Respondent
Criminal Appeal Nos. 849-850 of 2011
Decided On : 23-09-2021
Negotiable Instruments Act, 1881 – Section 138 read with Sections 118 and 139 – Dishonour of cheque – Reversal of conviction – Respondent has not disputed signature on the cheque – If that be the position, presumption would arise under Section 139 in favour of appellant who was holder of cheque – Whether there is rebuttal or not would depend on facts and circumstances of each case – Cheque issued by respondent was towards part repayment of advance amount since appellant realized that respondent did not have proper title to property and transaction could not be carried forward – Though respondent had put forth contention that a relative of appellant was junior of his Advocate and he has used his dominant position to secure signature on he cheque, there is absolutely no explanation whatsoever to indicate reason for which such necessity arose for him to secure signatures of respondent, if there was no transaction whatsoever between parties – Notice issued by appellant intimating dishonorment of cheque and demanding payment, though received by respondent has not been replied – Case put forth by respondent does not satisfy requirement of rebuttal even if tested on touchstone of preponderance of probability – In present facts it cannot be held that presumption which had arisen in favour of appellant had been successfully rebutted by respondent herein – High Court was not justified in its conclusion – Gravity of complaint under N.I. Act cannot be equated with an offence under provisions of Indian Penal Code, 1860 or other criminal offences – If an enhanced fine is imposed it would meet ends of justice – Only in event respondent-accused not taking benefit of same to pay fine but committing default instead, he would invite penalty of imprisonment – If an enhanced fine is imposed it would meet ends of justice – Only in the event respondent-accused not taking benefit of same to pay fine but committing default instead, he would invite penalty of imprisonment – Sentence to undergo simple imprisonment for six months and fine of Rs.2,00,000/- modified – Respondent/Accused instead sentenced to pay fine of Rs. 2,50,000/- within three months – In default of payment of fine Respondent/Accused shall undergo simple imprisonment for six months – From fine amount, sum of Rs. 2,40,000/- shall be paid to Appellant/Complainant as compensation. (Paras 11, 16, 17, 19, 20, 21 and 22)
Facts of the case:
Appellant is assailing common order dated 01.12.2009 in Criminal Revision Petition No.1282/2006 connected with Criminal Revision Petition No.1481/2006 passed by the High Court of Karnataka. Through the said order Single Judge has allowed Criminal Revision Petition No.1282/2006 filed by respondent herein. Criminal Revision Petition No.1481/2006 filed by the appellant herein has been dismissed. Consequently, the conviction of the respondent, ordered by Judicial Magistrate and affirmed by Session Judge is set aside.
Findings of Court:
Transaction in question is not an out and out commercial transaction. The very case of appellant before the Trial Court was that the respondent was in financial distress and it is in such event, he had offered to sell his house for which the advance payment was made by the appellant. The subject cheque has been issued towards repayment of a portion of the advance amount since sale transaction could not be taken forward. In that background, what cannot also be lost sight of is that more than two and half decades have passed from the date on which the transaction had taken place. During this period there would be a lot of social and economic change in status of the parties.
Result : Appeals allowed in part.
Certainly. Based on the provided legal document, here are the key points:
The dishonour of a cheque does not automatically establish criminal liability; whether there is rebuttal depends on the facts and circumstances of each case (!) .
The severity of a complaint under the relevant financial legislation cannot be equated with offences under the Indian Penal Code or other criminal laws (!) .
When the signature on a cheque is not disputed, a presumption arises in favor of the holder that the cheque was issued for consideration or in discharge of a debt, unless the accused successfully rebuts this presumption (!) (!) .
The burden of proof to rebut the presumption of consideration or liability rests on the accused and is to be proved on a preponderance of probabilities (!) (!) .
Evidence or circumstances that suggest the transaction is doubtful or that the amount was not paid can constitute a probable defence, which may shift the burden back to the complainant to prove financial capacity and transaction details (!) (!) .
Contention that signatures were obtained under undue influence or dominant position must be supported by credible evidence; mere assertions or afterthoughts are insufficient to rebut presumption (!) (!) .
Discrepancies or considerations unrelated to the core transaction, such as property details, do not necessarily impact the validity of the agreement unless they pertain directly to the issue of consideration or consent (!) .
The absence of rebuttal evidence and the unchallenged signature on the cheque support the conclusion that the cheque was issued in discharge of a liability, and the presumption remains unless successfully rebutted (!) .
The nature of the transaction—being a non-commercial, personal transaction—may influence the appropriate legal response, especially considering the elapsed time and changes in circumstances (!) .
The conviction is to be restored, but the sentence may be modified to impose a higher fine and to allow for default imprisonment if the fine is not paid, considering the passage of time and social changes (!) (!) .
The order of the higher court setting aside the conviction is to be overturned, and the original conviction and modified sentence are to be reinstated (!) (!) (!) .
The respondent is directed to pay a specified fine within a set period, with default provisions for imprisonment if the fine is not paid (!) .
The appeals are partially allowed, and pending applications are disposed of accordingly (!) .
Please let me know if you require further analysis or specific legal advice based on this document.
JUDGMENT :
A.S. BOPANNA, J.
1. The appellant is before this Court assailing the common order dated 01.12.2009 in Criminal Revision Petition No. 1282/2006 connected with Criminal Revision Petition No. 1481/2006 passed by the High Court of Karnataka. Through the said order the learned Single Judge has allowed Criminal Revision Petition No. 1282/2006 filed by the respondent herein. The Criminal Revision Petition No. 1481/2006 filed by the appellant herein has been dismissed. Consequently, the conviction of the respondent, ordered by the learned Judicial Magistrate and affirmed by the learned Session Judge is set aside.
2. The case of the appellant is that the respondent who was known to him for the past few years approached the appellant and informed that due to his financial difficulty he intends to sell the house situate in Sirsi town. The appellant agreed to purchase the same for the negotiated total sale consideration of Rs. 4,00,000/- (Rupees four lakhs only). An agreement dated 06.06.1996 was executed by the respondent while receiving the advance amount of Rs. 3,50,000/- (Rupees three lakhs fifty thousand only). Subsequently, when the appellant made certain enquiries, he learnt that the house stood in the name of the father of the respondent and the respondent did not have the authority to sell the same. In that view, the appellant demanded the return of Rs. 3,50,000/- (Rupees three lakhs fifty thousand only) which he had paid as the advance amount. The respondent instead of paying the entire amount, issued a cheque dated 17.05.1998 for the sum of Rs. 1,50,000/- (Rupees one lakh fifty thousand only) being part of the amount. The appellant presented the cheque for realisation on 20.05.1998 when it came to be dishonoured with the endorsement insufficient funds.
3. The appellant therefore got issued a notice informing the respondent about the cheque being dishonoured and also demanding payment of the cheque amount. The respondent, though received the notice, failed to respond to the same. In that view, the appellant filed a complaint under Section 200 of the Criminal Procedure Code (for short Cr.P.C.) on 14.07.1998 in the Court of the Judicial Magistrate, First Class (for short ‘JMFC’) at Sirsi which was registered as Criminal Case No. 790/2000. Through the said complaint the appellant sought prosecution of the respondent under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘N.I. Act’). The learned JMFC after providing opportunity to both the parties convicted the respondent through the judgment dated 09.06.2005 for the offence punishable under Section 138 of the N.I. Act; sentenced the respondent to undergo simple imprisonment for six months and to pay the fine of Rs. 2,00,000/- (Rupees two lakhs only). In default of payment of the fine amount, the accused was ordered to undergo simple imprisonment for a further period of three months. Out of the fine amount, Rs. 1,95,000/- (Rupees one lakh ninety-five thousand only) was ordered to be paid to the appellant as compensation.
4. The respondent herein claiming to be aggrieved by the said judgment dated 09.06.2005 passed by the JMFC, filed an appeal before the District and Sessions Judge, Uttara Kannada, Karwar in Criminal Appeal No. 57/2005. The appellant herein also filed an appeal in Criminal Appeal No. 65/2005 before the District and Sessions Judge seeking that the sentence imposed on the respondent by the Learned JMFC be enhanced, as the compensation of Rs. 1,95,000/- (Rupees one lakh ninety-five thousand only) ordered to be paid to the appellant is insufficient. The learned Sessions Judge having reexamined the matter and on reassessing the evidence dismissed both the appeals through separate judgments both dated 22.04.2006. The respondent herein, in that view, filed the Revision Petition in Criminal Revision Petition No. 1282/2006 and the appellant herein filed the connected Revision Petition No. 1481/2006 before the High Court. The learned Single Judge, as noted
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