Case Note & Summary
The petitioner, B.N. Ashwath Narayan, was convicted by the XII Additional Chief Metropolitan Magistrate, Bengaluru in C.C.No.28739/2001 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (N.I. Act) and sentenced to pay a fine of Rs.70,000/-. The conviction was upheld by the LV Additional City Civil and Sessions Judge, Bengaluru in Crl.A.No.665/2013 vide judgment dated 15.09.2018. The petitioner challenged both judgments in this criminal revision petition under Section 397 read with Section 401 of the Code of Criminal Procedure, 1973. The case arose from a complaint by the respondent, Shankar, who alleged that the petitioner borrowed Rs.1,00,000/- from him on 15.06.2001 and issued a cheque for the same amount drawn on Canara Bank, which was dishonoured on presentation due to insufficient funds. The petitioner admitted the cheque and signature but claimed that the loan was repaid and the cheque was given as security. The trial court convicted the petitioner, and the appellate court confirmed the conviction. The High Court examined the records and found that the petitioner failed to rebut the presumption under Sections 118 and 139 of the N.I. Act. The court noted that the petitioner did not produce any evidence of repayment, such as receipts or bank statements, and his defence was not credible. The court held that the presumption of consideration and negotiability stands in favour of the complainant, and the accused must rebut it by preponderance of probabilities. Since the petitioner failed to do so, the conviction was upheld. The revision petition was dismissed.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Sections 118 and 139 - The complainant alleged that the accused borrowed Rs.1,00,000/- and issued a cheque for repayment, which was dishonoured. The accused contended that the loan was repaid and the cheque was given as security. The court held that the presumption under Sections 118 and 139 of the N.I. Act operates in favour of the complainant, and the accused failed to rebut the same by preponderance of probabilities. The conviction was upheld. (Paras 1-10) B) Negotiable Instruments Act - Rebuttal of Presumption - Standard of Proof - The accused must rebut the presumption under Section 139 by raising a probable defence. Mere denial or assertion of repayment without evidence is insufficient. The court found that the accused's defence was not supported by credible evidence, and the trial court and appellate court correctly convicted him. (Paras 5-10)
Issue of Consideration
Whether the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the accused claims that the cheque was not issued for a legally enforceable debt or liability.
Final Decision
The criminal revision petition is dismissed. The judgment of conviction and sentence passed by the trial court and confirmed by the appellate court is upheld.
Law Points
- Presumption of consideration under Section 139 N.I. Act
- Presumption of negotiability under Section 118 N.I. Act
- Burden of proof on accused to rebut presumption
- Standard of proof for rebuttal is preponderance of probabilities
- Dishonour of cheque for insufficiency of funds constitutes offence under Section 138 N.I. Act
