Case Note & Summary
The petitioner/accused, Smt. Shobhavathi, issued a cheque for Rs.50,000 in favour of 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 to prevent the complainant from harassing his third wife, who is the accused's sister, and thus was not supported by lawful consideration. The Trial Court convicted the accused, and the Appellate Court confirmed the conviction but reduced the sentence to simple imprisonment for one month and compensation of Rs.1,00,000. The accused filed a revision petition before the High Court. The High Court examined the evidence and found that the accused had not rebutted the presumption under Section 139 of the NI Act that the cheque was issued for consideration. The court held that the accused's testimony alone was insufficient to prove absence of consideration. However, considering the circumstances, the court modified the sentence by setting aside the imprisonment and directing the accused to pay a fine of Rs.1,00,000 as compensation to the complainant, failing which she would undergo simple imprisonment for one month.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Lawful Consideration - Cheque issued to prevent harassment of sister held not supported by lawful consideration, but presumption under Section 139 NI Act not rebutted by accused's testimony alone - Held that the accused failed to prove absence of consideration, and conviction was upheld (Paras 2-4).
B) Negotiable Instruments Act - Sentence - Section 138 - Discretion to Impose Imprisonment - Where cheque amount is small and accused is a woman, sentence of imprisonment may be reduced to fine only - Held that the ends of justice would be met by imposing a fine of Rs.1,00,000 as compensation, without imprisonment (Para 4).
Issue of Consideration
Whether the cheque issued to prevent harassment of a third party constitutes lawful consideration under Section 138 of the Negotiable Instruments Act, 1881, and whether the accused successfully rebutted the presumption under Section 139 of the Act.
Final Decision
Revision petition partly allowed. Conviction under Section 138 NI Act upheld. Sentence of imprisonment set aside. Accused directed to pay fine of Rs.1,00,000 as compensation to complainant within two months, failing which she shall undergo simple imprisonment for one month.
Law Points
- Presumption of consideration under Section 139 NI Act
- Burden of proof on accused to rebut presumption
- Lawful consideration under Section 2(d) Contract Act
- Sentence discretion under Section 138 NI Act
Case Details
2013 LawText (KAR) (03) 3
K.V. Narasimhan (for petitioner), S. Subhash (for respondent)
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Criminal revision petition against conviction under Section 138 of Negotiable Instruments Act, 1881 for cheque dishonour.
Remedy Sought
Petitioner/accused sought to set aside conviction and sentence imposed by Trial Court and Appellate Court.
Filing Reason
Cheque issued by accused to complainant was dishonoured; accused alleged cheque was not supported by lawful consideration as it was issued to prevent harassment of her sister.
Previous Decisions
Trial Court convicted accused under Section 138 NI Act; Appellate Court confirmed conviction and modified sentence to one month simple imprisonment and compensation of Rs.1,00,000.
Issues
Whether the cheque issued to prevent harassment of a third party constitutes lawful consideration under Section 138 NI Act.
Whether the accused successfully rebutted the presumption under Section 139 NI Act that the cheque was issued for consideration.
Whether the sentence of imprisonment was appropriate in the circumstances.
Submissions/Arguments
Petitioner argued that cheque was issued to prevent complainant from harassing her sister, thus no lawful consideration.
Petitioner argued that sentence of imprisonment was excessive and should be set aside.
Respondent argued that cheque was issued for repayment of loan and presumption under Section 139 NI Act applies.
Ratio Decidendi
The presumption under Section 139 of the Negotiable Instruments Act, 1881 that a cheque was issued for consideration is not rebutted merely by the accused's testimony that the cheque was issued to prevent harassment; the accused must prove absence of consideration on a preponderance of probabilities. However, in appropriate cases, the sentence of imprisonment may be substituted with fine only, especially where the cheque amount is small and the accused is a woman.
Judgment Excerpts
The accused has examined her-self and testified to the effect that cheque was issued to console the complainant and to prevent him from harassing his third wife who is none other the sister of the accused. Therefore cheque is not supported by any lawful consideration.
The imposition of sentence of imprisonment is bad in law and the same may be set aside.
The sentence of imprisonment is set aside. The petitioner is directed to pay a fine of Rs.1,00,000/- as compensation to the respondent within two months from today, failing which she shall undergo simple imprisonment for one month.
Procedural History
Complaint filed under Section 138 NI Act in C.C.No.2180/99 before JMFC-II Court, Mysore. Trial Court convicted accused on 1.8.2003. Appeal filed in Crl.A.No.110/03 before Fast Track Court-II, Mysore, which confirmed conviction and modified sentence on 8.10.2004. Accused filed revision petition under Section 397 Cr.P.C. before High Court of Karnataka.
Acts & Sections
- Negotiable Instruments Act, 1881: 138, 139
- Code of Criminal Procedure, 1973: 397
