Karnataka High Court dismissed a criminal revision petition challenging conviction for cheque bounce under Section 138 NI Act. The court held the accused failed to rebut the presumption of legally recoverable debt despite claiming a blank cheque was misused.
Revision petition dismissed; respondent entitled to withdraw deposited fine portion.
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JUNE, 2022
BEFORE
THE HON’BLE MRS.JUSTICE M.G. UMA
CRIMINAL REVISION PETITION NO.489/2017
BETWEEN :
SRI. GOPAL SON OF SHIVE GOWDA AGED ABOUT 55 YEARS BHARADWAJ NILAYA, UPSTIAR BESIDE OLD RTO OFFICE ROAD HOSAMANE EXTENSION CHIKKAMAGALURU CITY - 577 101.
… PETITIONER
(BY SRI: JAYAKIRTHI M.C., ADVOCATE)
AND :
SMT. C.N. YASHODAMMA WIFE OF LATE C. VENKATARAM AGED ABOUT 62 YEARS RESIDING AT 1ST CROSS KUVEMPU NAGARA CHIKKAMAGALURU CITY - 577 101
… RESPONDENT
(BY SRI: GIRISH B BALADARE, ADVOCATE)
THIS CRIMINAL REVISION PETITION IS FILED UNDER SECTION 397 OF CR.P.C. PRAYING TO SET ASIDE THE ORDER DATED 08.12.2015 PASSED BY THE II ADDITIONAL CIVIL JUDGE AND J.M.F.C., CHIKKAMAGALURU IN C.C.NO.606 OF 2013 CONVICTING THE PETITIONER FOR THE OFFENCE UNDER SECTION 138 OF N.I. ACT AND THE ORDER DATED 06.04.2017 PASSED BY THE II ADDITIONAL SESSIONS JUDGE, CHIKKAMAGALURU IN CRL.A.NO.7 OF 2016.
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THIS CRIMINAL REVISION PETITION COMING ON FOR FINAL HEARING THIS DAY, THE COURT PASSED THE FOLLOWING:
O R D E R
The revision petitioner-accused is before this Court being aggrieved by the judgment of conviction and order of sentence dated 08.12.2015 passed in CC No.606 of 2013 by the learned II Additional Civil Judge and JMFC, Chikmagalur (hereinafter referred to as 'Trial Court' for brevity) which was confirmed by the judgment dated 06.04.2017 passed in Criminal Appeal No.7 of 2016 by the learned II Additional Sessions Judge, Chikkamagaluru (hereinafter referred to as 'First Appellate Court' for brevity), for the offence punishable under Section 138 of the Negotiable Instruments Act (for short 'NI Act').
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No.885946 dated 24.01.2013 for Rs.5,00,000/- drawn on Indian Bank, Chikmagaluru towards repayment of hand loan obtained by him. When the cheque in question was presented for encashment, the same was dishonored as funds insufficient. Legal notice was issued to the accused calling upon him to repay the cheque amount. Legal notice was served on him. But in spite of that, there was no reply nor the accused repaid the cheque amount. Thereby, he has committed the offence punishable under Section 138 of NI Act. Accordingly, the complainant requested the Trial Court to take cognizance of the offence and to initiate legal action.
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313 of Cr.P.C. He also examined DW1 being the Manager of the Bank and examined himself as DW2 and got marked Exs.D1 to D7 in support of his defence.
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conviction and order of sentence passed concurrently by both the Courts.
amount. The accused has taken specific defence that he had financial transaction with the husband of the complainant and he had repaid the loan amount that was obtained from her husband. Since the accused had issued blank cheque as security in favour of the husband of the complainant, the complainant misused the same and presented the same for encashment. Therefore, the offence under Section 138 of NI Act is not committed by the accused, since there is no legally recoverable debt. DW1 - the Manager of the Bank spoke
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about Exs.D1 and 4. The accused stepped into the witness box and deposed as DW2. Nothing has been elicited during the cross examination. The suggestion put to PW1 discloses that the financial transaction by the accused with the husband of the complainant is literally admitted. Under such circumstances, the accused is successful in probablising the defence taken by him. Both the Trial Court as well as First Appellate Court ignored these materials on record and proceeded to convict the accused. Hence, he prays to allow the revision petition.
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husband of the complainant and the same was not returned to him, the accused could have instructed the bank to stop payment, but no attempt was made by the accused. None of the documents produced by the accused or the evidence of DWs.1 and 2 are helpful in rebutting the presumption under Sections 118 and 139 of NI Act. Therefore, the Trial Court as well as the First Appellate Court are right in convicting the accused.
1 (2021) 5 SCC 283
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"Whether the revision petitioner has made out any grounds to interfere with the impugned judgment of conviction and order of sentence passed by the Trial Court and which was confirmed by the First Appellate Court?"
My answer to the above point is in 'Negative' for the following:
REASONS
that she had lent the amount of Rs.5,00,000/- in cash as hand loan to the accused for the purpose of improving his coffee estate. Towards repayment of the loan amount, the cheque was issued by him. The accused has not denied the contention that Ex.P1 - cheque belongs to him. On the other hand, he categorically admits that the cheque belongs to his bank account and it bears his signature. Issuance of legal notice and non issuance of reply is also not in dispute. The contention taken by the accused during trial is that, immediately after receipt of the legal notice, he met the
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husband of the complainant and enquired as to why such false legal notice was issued, for which, the husband of the complainant replied that he will look into the matter and see that no complaint is filed. But this defence taken by the accused is never probablised.
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book of Karnataka Bank as per Ex.P6, which shows that during December 2012, she had around Rs.2,00,000/balance in her bank account.
about his defence. He states that during 2004, he had borrowed the amount of Rs.50,000/- from the husband of the complainant and had issued the blank cheque drawn on Indian Bank. He had promised to repay the loan amount within three years. Subsequently, it was settled between him
and the husband of the complainant. Accordingly, he had issued two cheques for Rs.50,000/- and both cheques were encashed by the husband of the complainant. The accused further states that the blank cheque which he had given was
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not returned by the husband of the complainant even in spite of demand in that regard.
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under Sections 118 of 139 of NI Act comes into operation and it is for the accused to rebut the said presumption. Of course,
the accused can rebut the presumption either by cross examining the complainant or by producing documents or by stepping into the witness box deposing about the defence. In the present case, accused examined DW1 and produced certain documents in support of his defence and he also stepped into the witness box as DW2. Even though such contentions were taken by the accused, he never probablised his defence not the legal presumptions are rebutted.
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"14. Adverting to the case in hand, we find on a plain reading of its judgment that the trial Court completely overlooked the provisions and failed to appreciate the statutory presumption drawn under Section 118 and Section 139 of NIA. The Statute mandates that once the signature(s) of an accused on the cheque/negotiable instrument are established, then these ‘reverse onus’ clauses become operative. In such a situation, the obligation shifts upon the accused to discharge the presumption imposed upon him. This point of law has been crystalized by this Court in Rohitbhai Jivanlal Patel v. State of Gujarat in the following words:
“In the case at hand, even after purportedly drawing the presumption under Section 139 of the NI Act, the trial court proceeded to question the want of evidence on the part of the complainant
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as regards the source of funds for advancing loan to the accused and want of examination of relevant witnesses who allegedly extended him money for advancing it to the accused. This approach of the trial court had been at variance with the principles of presumption in law. After such presumption, the onus shifted to the accused and unless the accused had discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant's case could not have been raised for want of evidence regarding the source of funds for advancing loan to the appellant-accused…..”
15. Once the 2nd Appellant had admitted his signatures on the cheque and the Deed, the trial Court ought to have presumed that the cheque was issued as consideration for a legally enforceable debt. The trial Court fell in error when it called upon the Complainant-Respondent to explain the circumstances under which the appellants were liable to pay. Such approach of the trial Court was directly in the teeth of the established legal position as discussed above, and amounts to a patent error of law.
16. No doubt, and as correctly argued by senior counsel for the appellants, the
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presumptions raised under Section 118 and Section 139 are rebuttable in nature. As held in MS Narayana Menon v. State of Kerela, which was relied upon in Basalingappa (supra), a probable defence needs to be raised, which must meet the standard of “preponderance of probability”, and not mere possibility. These principles were also affirmed in the case of Kumar Exports (supra), wherein it was further held that a bare denial of passing of consideration would not aid the case of accused.
18. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar, where this court held that:
“Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.”
(Emphasis supplied)
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confirmed by the First Appellate Court. Hence, the revision petition is liable to be dismissed.
Accordingly, the revision petition is dismissed.
At this stage, learned counsel for the revision petitioner
and respondent submit that a portion of the fine amount is already deposited before the Trial Court.
The respondent is entitled to withdraw the same, on due
identification.
Sd/JUDGE
*bgn/-
2 issues framed by the court
Whether the revision petitioner has made out any grounds to interfere with the impugned judgment of conviction and order of sentence?
Whether the accused successfully rebutted the statutory presumption under Sections 118 and 139 of the Negotiable Instruments Act?
Colour shows how this judgement treated each authority
M/s Kalamani Tex and another Vs P BalasubramanianRelied on¶39
M/s Kalamani Tex and another Vs P Balasubramanian (2021) 5 SCC 283 · Who else cites this
Basalingappa Vs MudibasappaReferred¶75
Basalingappa Vs Mudibasappa
Rohitbhai Jivanlal Patel v. State of GujaratReferred¶68
Rohitbhai Jivanlal Patel v. State of Gujarat
MS Narayana Menon v. State of KerelaReferred¶75
MS Narayana Menon v. State of Kerela
Kumar ExportsReferred¶75
Kumar Exports
Bir Singh v. Mukesh KumarReferred¶76
Bir Singh v. Mukesh Kumar
4 provisions across 2 enactments
Sri. Gopal Son of Shive Gowda
Smt. C.N. Yashodamma
M.G. Uma
As recorded by the court registry
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