Case Note & Summary
The appellant, Mahesh Urban Credit Coop. Society Ltd., through its manager, filed a criminal appeal challenging the acquittal of the respondent, Narayanrao Ukandrao Paikrao, by the Judicial Magistrate, First Class, Yavatmal, in Summary Criminal Case No. 2130/2007. The complainant society alleged that the accused had taken a loan of Rs. 5 lakhs for house construction, executed necessary documents, and issued a cheque for Rs. 1,40,000 on 20.4.2007 towards repayment. The cheque was presented on 23.4.2007 but was dishonoured due to insufficient funds. A legal notice was sent on 14.5.2007 by registered post, but the accused did not pay the amount. The trial court acquitted the accused, holding that the complainant failed to prove the loan transaction and that the notice was not served. The High Court, however, found that the trial court had improperly appreciated the evidence. The court noted that the accused admitted his signature on the cheque, raising the presumption under Section 139 of the Negotiable Instruments Act, 1881, that the cheque was issued for a legally enforceable debt. The accused failed to rebut this presumption. The court also held that the notice sent by registered post was deemed served under Section 27 of the General Clauses Act, 1897, as the accused did not prove non-service. The High Court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the Negotiable Instruments Act, sentencing him to pay a fine of Rs. 1,50,000, with Rs. 1,40,000 to be paid as compensation to the complainant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - The complainant society alleged that the accused issued a cheque for Rs. 1,40,000 towards repayment of loan, which was dishonoured due to insufficient funds. The trial court acquitted the accused on the ground that the complainant failed to prove the loan transaction and that the notice was not served. The High Court held that the presumption under Section 139 of the Negotiable Instruments Act, 1881, operates in favour of the complainant once the execution of the cheque is admitted, and the accused failed to rebut the presumption. The acquittal was set aside and the accused was convicted. (Paras 1-10)
Issue of Consideration
Whether the trial court erred in acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881, by improperly appreciating the evidence and ignoring the presumption under Section 139 of the Act.
Final Decision
Appeal allowed. The judgment and order of acquittal dated 11.6.2008 in Summary Criminal Case No. 2130/2007 is set aside. The accused is convicted under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs. 1,50,000, in default to undergo simple imprisonment for three months. Out of the fine, Rs. 1,40,000 shall be paid as compensation to the complainant.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Dishonour of cheque
- Notice of demand
- Service of notice by registered post
- Burden of proof
