Case Note & Summary
The revision petition was filed by Sri. Shanmugam (petitioner) against the judgment of conviction and sentence dated 03.12.2022 passed in C.C.No.259/2018 by the Trial Court (Principal Civil Judge and Addl. JMFC, KGF) and confirmed in Criminal Appeal No.88/2022 by the III Additional District and Session Judge at Kolar sitting at KGF on 20.04.2023. The petitioner was convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The respondent/complainant, Sri. K. Thangavelu, alleged that the petitioner had borrowed a loan of Rs.5,00,000/- and issued a cheque dated 15.06.2018 drawn on Canara Bank, Bangarpet, which was dishonoured with the endorsement 'funds insufficient'. The petitioner contended that no such loan was advanced and that the cheque was given as security for some other transaction. The Trial Court convicted the petitioner, and the Appellate Court confirmed the conviction. The High Court, after hearing both sides, found that the complainant failed to prove the existence of a legally enforceable debt. The complainant did not produce any documentary evidence such as loan agreement, receipts, or bank statements to show that the loan was advanced. The petitioner successfully rebutted the presumption under Section 139 of the NI Act by raising a probable defence. The High Court set aside the conviction and acquitted the petitioner.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant must prove that the cheque was issued for a legally enforceable debt or liability. Mere issuance of cheque and its dishonour does not automatically lead to conviction if the existence of debt is not established. (Paras 10-15) B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The presumption under Section 139 of the NI Act is rebuttable. The accused can rebut the presumption by raising a probable defence. In the present case, the accused successfully rebutted the presumption by showing that the loan was not advanced as claimed. (Paras 16-20) C) Evidence Act - Burden of Proof - The burden of proof lies on the complainant to prove the existence of a legally enforceable debt. The complainant failed to produce any documentary evidence such as loan agreement, receipts, or bank statements to support the claim of loan advancement. (Paras 12-14)
Issue of Consideration
Whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the complainant fails to prove the existence of a legally enforceable debt or liability?
Final Decision
The revision petition is allowed. The judgment of conviction and sentence dated 03.12.2022 passed in C.C.No.259/2018 by the Trial Court and confirmed in Criminal Appeal No.88/2022 dated 20.04.2023 by the Appellate Court are set aside. The petitioner is acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
Law Points
- Presumption under Section 139 of NI Act is rebuttable
- burden shifts to accused to raise probable defence
- complainant must prove legally enforceable debt
- existence of loan must be proved by credible evidence
