Case Note & Summary
The appellant, Sathisha B.A., filed a criminal appeal under Section 378(4) of the Code of Criminal Procedure, 1973, challenging the judgment and order of acquittal dated 14.02.2018 passed by the LXVIII Additional Chief Metropolitan Magistrate, Mayo Hall Unit, Bengaluru, in C.C. No. 53478/2016. The appellant was the complainant before the trial court. He alleged that he had lent a total sum of Rs. 8,00,000 to the respondent, R. Prasad, who was a co-worker at Hindustan Aeronautics Limited, Bangalore. The loan was given in three installments: Rs. 2,00,000 in January 2014, Rs. 4,00,000 on 11.03.2014, and Rs. 2,00,000 on 04.06.2014, to meet unexpected medical expenses due to the respondent's brother's road accident. The respondent issued a cheque for Rs. 8,00,000 dated 04.06.2014 drawn on State Bank of India, HAL Branch, Bangalore, towards repayment. When presented, the cheque was dishonoured with the endorsement 'funds insufficient'. The appellant issued a legal notice on 18.06.2014, which was received by the respondent but no payment was made. 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 framed the issue of whether the trial court erred in acquitting the accused despite the presumption under Section 139 of the Negotiable Instruments Act, 1881. The appellant argued that the trial court ignored the statutory presumption and the respondent's failure to rebut it. The respondent remained absent and was served. The High Court held that once the execution of the cheque and the debt are admitted or proved, the presumption under Section 139 operates in favour of the complainant. The accused must rebut this presumption by leading evidence or through cross-examination. In this case, the respondent did not lead any evidence and did not effectively cross-examine the appellant. The trial court's finding that the appellant failed to prove the source of funds was perverse because the presumption shifts the burden onto the accused. The High Court allowed the appeal, set aside the acquittal, and convicted the respondent under Section 138 of the NI Act. The respondent was sentenced to pay a fine of Rs. 8,00,000, in default to undergo simple imprisonment for six months. The fine amount was directed to be paid as compensation to the appellant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 and 139 - Presumption in favour of holder - The complainant proved the execution of the cheque and the debt; the accused failed to rebut the presumption under Section 139 by leading evidence or effectively cross-examining the complainant. Held that the trial court's acquittal was perverse and liable to be set aside (Paras 2-6). B) Criminal Procedure Code - Appeal against acquittal - Section 378(4) - Scope of interference - The appellate court can reverse an acquittal if the trial court's findings are perverse or based on no evidence. Held that the trial court ignored the presumption under Section 139 NI Act and the accused's failure to rebut it, warranting interference (Paras 5-6).
Issue of Consideration
Whether the trial court erred in acquitting the accused despite the presumption under Section 139 of the Negotiable Instruments Act, 1881 not being rebutted.
Final Decision
Appeal allowed. Judgment of acquittal dated 14.02.2018 passed by LXVIII Addl. C.M.M., Mayo Hall Unit, Bengaluru in C.C. No. 53478/2016 is set aside. Respondent/accused is convicted for offence under Section 138 of Negotiable Instruments Act, 1881 and sentenced to pay fine of Rs. 8,00,000, in default to undergo simple imprisonment for six months. The fine amount shall be paid as compensation to the appellant.
Law Points
- Presumption under Section 139 NI Act
- Rebuttal of presumption
- Standard of proof in cheque dishonour cases
- Section 138 NI Act ingredients
- Section 378(4) CrPC appeal against acquittal
