Ganesh S/oNaravan I Iegde v. State of Karnataka

I leard the learned counsel Ibr the appellant and the counsel 11w the respondent.

2. The appellant “as the complainant helbre the trial Court. It was his case that in discharge of a loan the present respondent had issued a cheque lbr a sum of .40..OOO/- dated

27.5.2007 drawn on Honavar Urban Co-operative Bank Limited. which when presented to the banker of the respondent through his hanker. the same had been returned with an endorsement that hinds were insufficient. PLirsuant to which he had issued a legal notice making a demand of payment of the amount eo’ ered tinder the cheque. Since the respondent-accused did not pa the cheque amount nor did he choose to reply to the notice, he proceeded to file a complaint for an offence 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 t40.000 - as sought to be alleged, lie had onl3 borrowed a sum ol t5.000.— and at the Lime of loan he had issued a blank cheque a 3 security 1kw due repayment of the loan. The same has been misused by the appellant who has chosen to fill up the cheque at his ‘shim in a sum of t4OMOO/- and it is that which is sought to be encashed. lt is also demonstrated that the appellant was a money lender s ho had tiled similar criminal cases lbr dishonour of cheques. The documents Ex.D.4 to 1)65 were produced in support of the same and he was challenged in cross examination insofar as the appellanCs business. the payment of income tax and the details of loan transactions which he had paid in order to demonstrate, that none of these were evidenced by documents. It ssas apparent that the appellant ssas in the habit of lodging Iblse eases on the basis of Iblse documents. The present ease on hand. according to the learned counsel 1kw the respondent. ssas 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 he demonstrated that signature on the cheque and the other particulars were in totall> dill’erent ink and ola dilThrent age. In that. the signature was of an earlier point of time and the other particulars were filled up later in a diflèrent ink, which clearly demonstrated that the accused was sought to he defrauded by seeking to misuse a cheque leaf that was issued under circumstances as aforesaid. 4

4. The trial Court has accepted the defence and has observed that as laid down by the Apex Court in the case of Krishna Janardhan Bhat vs. Dattathreya 0. Hegde. 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 particulars 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 BhaCs case is no longer good law as held by a three Judge Bench judgment of the Supreme Court in the case of Rangappa vs. Mohan. AIR 2010 Supreme Court 1898. 5 whereby it is now made clear that not only does Section I 39 Ia> down that there is a presumption in favour ol the holder ol cheque that the same has been issued in discharge ol the legal liahilit>. the er> existence of the legal liability is also to he presumed and it is 11w 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. i’heretbre the trial Court ha ing placed reliance on the statements elicited in the cross examination of the appellant, were not sufficient. It was necessary lhr respondent to have tendered positive evidence in this regard and not merely rely on the statements elicited in the cross examination. ‘l’he difference in ink insofar as the signature and the other particulars in the cheque leaf being in different, would not advance the deknce of the respondent and the further contention, that the loan transaction was only for ?.5.000/-. whereas the cheque has been entered 1kw a larger sum. is also not a defence that could have been entertained. There is no legal prohibition. in the cheque being Ibund in two different inks. as it is not unusual to find in business practices that the particulars in a cheque is AIled up by one person and the signatory may he another. Therelbrc the same would not he a circumstance which can he held against the complainant.

6. In the I iht of’ the above opinion the judgment of’ the trial Court is set aside, the o1’haice punishable under Section I 3 ol the \:e)1 iable Instruments Act. I I is held established and accordingly the respondent is convicted of’ the offence and is directed to pay a ne of’ 45OOO out of vli ich .4OJ)OO - shall he paid as compensation under Sect on 3 ‘7 of the Code o Cri in nat Procedure. 1 973. and — of the same shall he made o er the State as flue. 1 he appeal is al loved accordingl\

7. ‘I’he respondent is granted one months time to deposit amount of fine. fluting sul’hr simple imprisonment for a period of siN months. Sd1 JUDGE v1 rk