High Court · 2011

Heard the learned counsel for the appellant and the counsel (hr the respondent.

2. The appellant was the complainant beibre the trial Court. It was his ease that in discharge of a loan the present respondent had issued a cheque for a sum of t95.000/-, dated

8.10.2006. drawn on the Corporation I3ank Limited. Kumta. which when presented to the banker of the respondent through his banker. the same had been returned with an endorsement that the funds were insutTicient. Pursuant to which he had issued a legal notice making a demand of payment of the amount covered under the cheque. Since the respondent-accused did not pay the cheque amount nor did he choose to reply to the notice. he proceeded to tile a complaint lhr an otThnce punishable under Section 138 of the Negotiable instruments Act 1881. before the Court below.

3. The complaint was resisted by the respondent and he sought to contend that the respondent had not borrowed a sum of t95A)00— as sought to he alleged. lie had only borrowed a sum of t20,000i- and at the time of loan he had issued a blank cheque as 4 4 3 security 11w due repayment ot the loan. The same has been misused by the appellant who has chosen to till up the cheque at his whim in a sum of t95.000 and it is that which is sought to he encashed. It is also demonstrated that the appellant was a money lender who had filed similar criminal cases for dishonour of cheques. The documents Ex.D.7 to D.69 were produced in support of the same and he was challenged in cross examination insofar as the appellanfs business. the payment of income tax and the details of loan transactions uhich he had paid in order to demonstrate. that none of these were evidenced by documents. It was apparent that the appellant was in the habit of lodging false cases on the basis of false documents. ‘I’he present case on hand, according to the learned counsel 11w the respondent, was one such. In other words, the very liability in respect of which the cheque was sought to be issued was challenged and it was also sought to be demonstrated that signature on the cheque and the other particulars were in totally different ink and of a different age. In that the signature was of an earlier point of time and the other particulars were filled up later in a different ink, which clearly demonstrated that the accused was sought to be defrauded I’> seeking to misuse a cheque leaf’ that was issued tinder circumstances as aforesaid. g 4

4. The trial (‘nun has accepted the deflnee and has observed that as laid down by the Apex Court in the case of Krishna Janardhan Bhat vs. Dattathreya 0. I legde, AIR 2008 Supreme Court

1325. though Section 139 provides that a presumption is raised in favour of the holder of a cheque that the same has been issued in discharge of a debt or other liability, the burden would remain on the such holder of a cheque to demonstrate that there was a legal liability and in the absence of any particLilars of a loan transaction and in the light of the admissions in the cross examination that no such particulars were forthcoming and the legal capacity and the financial capacity of the appellant to lend such money when there were large scale loans created in favour of the third parties by the appellant, the Court has disbelieved the transaction in the light of the judgment in Krishan Janardhan Bhat’s case and has accordingly dismissed the complaint. It is that which is under challenge in the present appeal.

5. Insofar as the legal position is concerned, the law laid down in Krishna Janardhan Shat’s case is no longer good Ian as held by a three Judge Bench judgment of the Supreme Court in the case of Rangappa vs. Mohan. AIR 2010 Supreme Court 1898, S 4 a ‘lwreby it is no” made clear that not only does Section 139 lay down that there is a presumption in favour of the holder of the cheque that the same has been issued in discharge of the legal liability, the very existence of the legal liability is also to he presumed and it is for the accused to tender rebuttal evidence to demonstrate that there was no such legal liability, the burden does not lie on the holder of a cheque. Therefore the trial Court having placed reliance on the statements elicited in the cross examination of the appellant. were not sufficient. It was necessary for respondent to have tendered positive evidence in this regard and not merely rely on the statements elicited in the cross examination. The difference in ink insofar as the signature and the other particulars in the cheque leaf being in different, would not advance the defence of the respondent and the further contention that the loan transaction was only for Z.20.000/-. whereas the cheque has been entered lbr a larger sum. is also not a defence that could have been entertained. There is no legal prohibition. in the cheque being found in two different inks, as it is not unusual to find in business practices that the particulars in a cheque is fllled up by one person and the signatory may be another. Therelbre the same would not he a circumstance which can he held against the complainant. 4

6. In the light ol the above opinion the udamcnt of the trial C oiirt is et aside. I he ofLnee pun i shah Ic under cet i m 13$ 01 the Neuotiahle Instruments Act. 1 881 . is held established and accordinal’ the respondent is eons ieted of the offence and is directed to pa a I3nc of . 1 UO,00() - out o I h ich )5 .000 - shall be paid as compenSation under Section 357 of the Code of Criminal Procedure. 1 073. and 5. 0(1(1 of the same s ha I be made over the State as IThe, The appeal is allowed accordingly.

7. The respondent is granted one month s time to deposit amount of %ne, failing which simple Imprisonment tor a period of six monihs sd/ JUDGE Mrk/