Case Note & Summary
The petitioner/accused, Smt. Shobhavathi, issued a cheque for Rs.50,000 to the respondent/complainant, Dr. Krishnoji Rao, who is her brother-in-law. The cheque was dishonoured, leading to a complaint under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the cheque was issued towards repayment of a loan taken for business purposes. The accused contended that the cheque was issued without consideration, to prevent the complainant from harassing his third wife, who is the accused's sister. The Trial Court convicted the accused, and the Appellate Court confirmed the conviction, reducing the sentence to one month simple imprisonment and compensation of Rs.1,00,000. The accused filed a revision petition. The High Court held that the presumption of consideration under Section 139 NI Act applies, and the accused failed to rebut it. The court noted that the accused's defence was not supported by evidence, as she did not examine her sister or produce any complaint of harassment. The court upheld the conviction but modified the sentence, setting aside the imprisonment and imposing a fine of Rs.1,00,000, with default simple imprisonment for one month, and directing that the fine be paid as compensation to the complainant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption of Consideration - The court considered whether the cheque issued by the accused to the complainant, her brother-in-law, was supported by lawful consideration. The accused contended the cheque was issued to prevent harassment of her sister, the complainant's third wife. The court held that the presumption under Section 139 of the NI Act applies and the accused failed to rebut it on a preponderance of probabilities. The conviction was upheld. (Paras 1-3) B) Negotiable Instruments Act - Sentence - Section 138 - The appellate court had reduced the sentence to one month simple imprisonment and compensation of Rs.1,00,000. The High Court, in revision, modified the sentence to fine of Rs.1,00,000 and in default simple imprisonment for one month, while confirming the compensation. (Para 3)
Issue of Consideration
Whether the cheque was issued for a lawful consideration and whether the conviction under Section 138 of the Negotiable Instruments Act, 1881 is sustainable.
Final Decision
Revision petition dismissed. Conviction under Section 138 NI Act upheld. Sentence modified: imprisonment set aside, fine of Rs.1,00,000 imposed, in default simple imprisonment for one month. Fine to be paid as compensation to complainant.
Law Points
- Presumption of consideration under Section 139 NI Act
- Burden of proof on accused to rebut presumption
- Standard of proof for rebuttal is preponderance of probabilities
- Sentence discretion under Section 138 NI Act
