Case Note & Summary
The appellant, Sri B.R. Anand, filed a criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, challenging the judgment of acquittal dated 08.02.2019 passed by the IV Additional and XXX Additional Chief Metropolitan Magistrate, Bengaluru, in C.C. No. 386/2018, whereby the respondent/accused, Smt. V.R. Gisha, was acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The appellant and respondent were co-employees in BESCOM at K.R. Circle, Bengaluru. The appellant retired in 2014 and received retirement benefits. The respondent requested a hand loan of Rs. 11,70,000/- for her sister's marriage and to discharge her house construction liability. The appellant paid the amount in June 2014, and the respondent agreed to repay within two years. After two years, the appellant demanded repayment, and the respondent issued a cheque dated 10.07.2017 for Rs. 11,70,000/- drawn on Canara Bank, which was dishonoured with the endorsement 'Funds Insufficient'. The appellant issued a legal notice on 20.07.2017, which was served on the respondent, but she failed to pay the amount. The Trial Court acquitted the respondent on the ground that the appellant failed to prove the source of funds for the loan. The High Court held that the Trial Court erred in acquitting the respondent. The appellant had proved the existence of a legally enforceable debt by establishing the loan transaction and the issuance of the cheque. The presumption under Section 139 of the Negotiable Instruments Act, 1881, that the cheque was issued for discharge of a debt or liability, stood in favour of the appellant. The respondent failed to rebut this presumption by producing any evidence to show that the cheque was not issued for any debt or liability. The mere denial by the respondent was insufficient. The High Court set aside the judgment of acquittal and convicted the respondent for the offence under Section 138 of the Negotiable Instruments Act, 1881. The respondent was sentenced to pay a fine of Rs. 11,70,000/- as compensation to the appellant, and in default, to undergo simple imprisonment for six months.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Rebuttal - The complainant proved the existence of a legally enforceable debt by establishing the loan transaction and issuance of cheque. The accused failed to rebut the presumption under Section 139 of the Negotiable Instruments Act, 1881, as she did not produce any evidence to show that the cheque was not issued for discharge of any debt or liability. The Trial Court erred in acquitting the accused. (Paras 1-10) B) Negotiable Instruments Act - Dishonour of Cheque - Burden of Proof - Once the complainant discharges the initial burden of proving the execution of the cheque and the existence of a debt, the burden shifts to the accused to rebut the presumption. The accused's mere denial without evidence is insufficient. (Paras 5-10)
Issue of Consideration
Whether the Trial Court was justified in acquitting the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881, despite the presumption under Section 139 of the Act and the failure of the accused to rebut the same.
Final Decision
Appeal allowed. Judgment of acquittal dated 08.02.2019 in C.C. No. 386/2018 passed by the IV Additional and XXX Additional Chief Metropolitan Magistrate, Bengaluru, is set aside. Respondent/accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. Respondent is sentenced to pay a fine of Rs. 11,70,000/- as compensation to the appellant, and in default, to undergo simple imprisonment for six months.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Burden of proof in cheque dishonour cases
- Section 138 NI Act
