Case Note & Summary
The appellant, Smt. F. Chandra, filed a criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, challenging the judgment dated 02.02.2012 passed by the XIV Additional Chief Metropolitan Magistrate, Bengaluru, in C.C. No. 40582/2008, whereby the respondent/accused was acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused presented herself as the owner of a site and sold it to the complainant under a sale deed dated 10.09.2007. However, when the complainant visited the site, one Smt. A. Sadhana obstructed her, claiming ownership based on a prior sale deed dated 15.05.2002 from the same vendor. The complainant discovered the fraud and the accused agreed to return the sale consideration. The accused issued a cheque for Rs. 10,00,000/- dated 15.03.2008 drawn on Canara Bank, Frazer Town Branch, Bengaluru, promising to pay cash later. The cheque was dishonoured with the reason 'payment stopped by drawer'. The complainant issued a legal notice on 07.08.2008, which was served, and the accused replied on 21.08.2008. The trial court acquitted the accused on the ground that the complainant failed to prove a legally enforceable debt or liability. The High Court held that the presumption under Section 139 of the NI Act applies and the accused failed to rebut it. The accused did not examine herself or any witness to prove her defence. The trial court's findings were perverse and based on no evidence. The appeal was allowed, the judgment of acquittal was set aside, and the accused was convicted under Section 138 NI Act and sentenced to pay a fine of Rs. 10,00,000/- with default sentence.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant purchased a property from the accused, but the accused had defective title. The accused agreed to return the sale consideration and issued a cheque which was dishonoured. The trial court acquitted the accused on the ground that the complainant failed to prove a legally enforceable debt. The High Court held that the presumption under Section 139 NI Act applies and the accused failed to rebut it. The appeal was allowed and the accused was convicted. (Paras 1-10) B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The accused must prove that the cheque was not issued in discharge of a debt or liability. Mere denial or raising a defence of property dispute is insufficient to rebut the presumption. The accused did not examine herself or any witness to prove her defence. (Paras 8-10) C) Criminal Procedure Code - Appeal against acquittal - Section 378(4) - The High Court can interfere with an acquittal if the trial court's findings are perverse or based on no evidence. In this case, the trial court ignored the presumption under Section 139 NI Act and the unchallenged evidence of the complainant. (Paras 7-10)
Issue of Consideration
Whether the trial court erred in acquitting the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881, despite the complainant having proved the execution of the cheque and the existence of a legally enforceable debt or liability.
Final Decision
Appeal allowed. Judgment of acquittal dated 02.02.2012 passed by XIV Addl. CMM, Bangalore in C.C. No. 40582/2008 is set aside. The respondent/accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs. 10,00,000/- (Rupees Ten Lakhs only) and in default of payment of fine, she shall undergo simple imprisonment for a period of six months.
Law Points
- Presumption under Section 139 NI Act
- Burden of proof on accused to rebut presumption
- Standard of proof in criminal appeals against acquittal
- Ingredients of Section 138 NI Act
