Case Note & Summary
The appellant, M/s. Networth Stock Broking Limited, represented by its authorised agent Kiran Kumar, filed a criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, challenging the judgment dated 23.01.2017 passed by the Additional Civil Judge and JMFC, Udupi, in C.C.No.634/2010, whereby the respondent/accused, Smt. Shanthala, was acquitted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused had issued a cheque for a legally enforceable debt, which was dishonoured upon presentation. The accused admitted the cheque and her signature but denied the debt. The trial court acquitted the accused on the ground that the complainant failed to produce the bank statement to prove the dishonour. The High Court held that once the accused admits the cheque and signature, the presumption under Section 139 of the NI Act arises that the cheque was issued for a debt or liability. The accused failed to rebut this presumption. The trial court's reasoning that the complainant's failure to produce the bank statement was fatal was erroneous. The High Court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the NI Act, sentencing her to pay a fine of Rs. 1,50,000/- with default sentence.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Rebuttal - The complainant proved the execution of the cheque and the signature of the accused, which were admitted. The accused failed to rebut the presumption that the cheque was issued for a legally enforceable debt. The trial court's acquittal was set aside. (Paras 2-10) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Burden of Proof - Once the signature and execution of the cheque are admitted, the presumption under Section 139 operates in favour of the complainant. The accused must lead evidence to rebut the presumption. Mere denial is insufficient. (Paras 5-8) C) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Complainant's Failure to Produce Bank Statement - Not Fatal - The trial court erred in holding that the complainant's failure to produce the bank statement was fatal. The accused's admission of the cheque and signature shifts the burden. (Paras 7-9)
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 accused admitting the cheque and signature, and failing to rebut the presumption under Section 139 of the Act.
Final Decision
Appeal allowed. The judgment of acquittal dated 23.01.2017 in C.C.No.634/2010 is set aside. The accused is convicted for the offence under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to pay a fine of Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand only), 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 ingredients
