Shri. Vinayak S/O Vishram Naik Vs Shri. Vinod S/O Deepak Bilay

THIS CRIMINAL APPEAL IS FILED U/S 378(4) OF CR.P.C. SEEKING TO CALL FOR THE RELEVANT RECORDS AND ALLOW THIS CRIMINAL APPEAL, BY SETTING ASIDE THE JUDGMENT AND ORDER OF ACQUITTAL DATED 01.02.2018 PASSED IN C.C.NO.207/2014, BY THE JMFC 2^ND COURT, AT KARWAR. CONVICT AND SENTENCE THE ACCUSED/RESPONDENT FOR THE OFFENCES PUNISHABLE UNDER SECTIONS 138 OF THE NEGOTIABLE INSTRUMENTS ACT. PASS SUCH ANY OTHER ORDER OR ORDERS AS THIS HON’BLE COURT DEEMS FIT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS CRIMINAL APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: THE HON'BLE MR. JUSTICE SHIVASHANKAR AMARANNAVAR

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ORAL JUDGMENT

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This appeal is filed by the appellant-complainant challenging the judgment of acquittal dated 01.02.2018 passed in CC No.207/2014 by the JMFC II-Court, Karwar, whereunder the respondent-accused has acquitted for offence punishable under Section 138 of Negotiable Instruments Act, 1881 [ hereinafter referred to as ‘N.I. Act’ for short ].

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The case of the appellant-complainant in brief is

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as under;

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The appellant-complainant and respondent-accused

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are friends. The appellant-complainant is a transport businessman and the respondent-accused is having his electrical contract business. In the first week of September-2013, the respondent-accused had availed financial assistance of ₹5,00,000/- from the appellantcomplainant to purchase the electrical materials. At that time, the accused had agreed to repay the said amount within a period of one [01] month. The appellant-

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complainant approached the respondent-accused for repayment of the amount borrowed and the respondentaccused has issued a cheque bearing No.100365 dated 05.11.2013 for ₹5,00,000/- drawn on IDBI Bank. The said cheque on presenting came to be dishonoured for want of funds in the Account of the respondent-accused. The appellant-complainant has got issued a legal notice dated 05.12.2013 and it has been served on the respondentaccused on 09.12.2013. In spite of service of notice, the respondent-accused has not paid the cheque amount. The appellant-complainant filed a private complaint against the respondent-accused for the offence punishable under Section 138 of N.I. Act.

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The learned Magistrate has taken the cognizance and registered C.C. No.207/2014 against the respondent-accused for the offence punishable under Section 138 of N.I. Act. The plea of the respondentaccused has been recorded. The appellant-complainant in order to prove his case examined himself as PW.1 and got

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marked six [6] documents at Ex.P.1 to P.6. The statement of the respondent-accused has been recorded under Section 313 of Cr.P.C. The respondent-accused did not choose to lead any defence evidence. The learned Magistrate after hearing the arguments of both the sides, has formulated the points for consideration and passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged by the appellantcomplainant in this present appeal.

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Heard the learned counsel for the appellantcomplainant and the learned counsel for the respondentaccused.

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Learned counsel for the appellant-complainant would contend that the respondent-accused has admitted his signature on cheque-Ex.P.1 and therefore, a presumption has to be drawn against the respondentaccused. The respondent-accused has taken up a plea that he has lost the cheque and the said defence has not been established. The respondent-accused has not rebutted the

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said presumption. As the presumption is not rebutted, there is no question of considering the financial capacity of the appellant-complainant to lend the money. He submits that the legal notice even though served on the respondent-accused, no reply has been sent by the respondent-accused. Without considering all these aspects, the learned Magistrate has erred in acquitting the respondent-accused. With this, he prayed to allow the appeal and convict the respondent-accused for offence punishable under Section 138 of N.I. Act.

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Learned counsel for respondent-accused would contend that the appellant-complainant has not proved his capacity to lend the money. PW.1-complainant has admitted in his cross-examination that he has written the contents of the cheque-Ex.P.1. The appellant-complainant has not produced any document to show that he has sold his Minibus and lent cash of ₹5,00,000/- to the respondent-accused. The lending of money has not been stated in the Income Tax Returns of the appellant-

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complainant. Considering the said aspect, the learned Magistrate has rightly acquitted the accused-respondent

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for offence punishable under Section 138 of N.I. Act.

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Learned counsel for the respondent-accused

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placed reliance on the following decisions;

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1. Vijay Vs. Laxman and Another reported in (2013) 3 SCC 86 .

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1. John K. Abraham Vs. Simon C. Abraham and Another passed in Criminal Appeal No.2043/2013 decided on 05.12.2013.

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1. APS Forex Services Private Limited Vs. Shakti International Fashion Linkers and Others reported in (2020) 12 SCC 724 .

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On these grounds he prayed for dismissal of the appeal.

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Having heard the learned counsels, this Court

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has perused the impugned judgment and trial Court records.

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9. Considering the grounds urged, the following

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point arises for consideration;

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“ Whether the trial Court has erred in acquitting the respondent-accused for

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offence punishable under Section 138 of

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N.I. Act?”

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My answer to the above point is in the affirmative for the following reasons;

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It is the specific case of the appellant-complainant

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that he has lent cash of ₹5,00,000/- to the respondentaccused in the first week of September-2013 and respondent-accused has agreed to repay the same within a period of one [01] month. The respondent-accused has borrowed the money for purchase of electrical goods for his electrical contract business. It is the further case of the appellant-complainant that Ex.P.1-cheque has been issued for repaying the said amount borrowed. The signature on the cheque-Ex.P.1 has been admitted by the respondent-

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accused. As the signature on the cheque is admitted, a presumption has to be drawn under Section 139 of N.I. Act. The cheque is issued for discharge of the debt. The said presumption is rebuttable presumption. For rebutting the said presumption, the standard of proof is preponderance of probability. The respondent-accused had taken up a defence that he had lost the cheque and it has been misused by the appellant-complainant. In order to substantiate the said defence, except the crossexamination of PW.1, no materials are placed on record. Except a suggestion that, cheque lost by the respondentaccused has been misused by the appellant-complainant, no other questions where put to PW.1 in the crossexamination. The admission of PW.1 that, he has filled the contents of the cheque will not establish the defence of the respondent-accused.

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Considering the said aspects, the respondentaccused has failed to rebut the presumption drawn under Section 139 of N.I. Act. As the presumption is not

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rebutted, the appellant-complainant need not to prove the transaction of amount borrowed and his capacity to lend the money. Merely because, the appellant-complainant has not stated the specific date of lending the money, the entire case of the appellant-complainant cannot be disbelieved on that ground.

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The decision relied on by the learned counsel for the respondent-accused, in the case of Vijay Vs.Laxman and Another stated supra does not apply to the facts of the present case, as facts of the said case are different. If the presumption is rebutted then, the burden shifts on the appellant-complainant to prove the transaction of lending money and issuance of cheque to discharge the debt. Since, the presumption is not rebutted, there is no question of the appellant-complainant to prove his capacity to lend the money.

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The Hon’ble Apex Court in the case of Kalamani tex and Another Vs. P Balasubramanian reported in (2021) 5 SCC 283 has held as under;

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“13. 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:

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“18. In the case at hand,

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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 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

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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.”

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14. The Hon’ble Apex Court in the case of Rajesh

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Jain Vs. Ajay Singh reported in AIR Online 2023 SC

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807 has observed as under;

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“55. As rightly contended by the appellant, there is a fundamental flaw in the way both the Courts below have proceeded to appreciate the evidence on record. Once the presumption under Section 139 was given effect to, the Courts ought to have proceeded on the premise that the cheque was, indeed, issued in discharge of a debt/liability. The entire focus would then necessarily have to shift on the case set up by the accused, since the activation of the presumption has the effect of shifting the evidential burden on the accused. The nature of inquiry would then be to see whether the accused has discharged his onus of rebutting

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the presumption. If he fails to do so, the Court can straightaway proceed to convict him, subject to satisfaction of the other ingredients of Section 138. If the Court finds that the evidential burden placed on the accused has been discharged, the complainant would be expected to prove the said fact independently, without taking aid of the presumption. The Court would then take an overall view based on the evidence on record and decide accordingly.”

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Without considering all these aspects, the learned Magistrate has erred in acquitting the respondentaccused for offence punishable under Section 138 of N.I. Act. All the ingredients under Section 138 of N.I. Act have been established. The cheque-Ex.P.1 has been dishonoured for want of funds in the Account of respondent-accused. The legal notice has been issued within a statutory period and it has been served on the respondent-accused. Respondent-accused has not paid the cheque amount within a period of fifteen [15] days from the date of service of notice. The appellant-complainant

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has filed a complaint within the statutory period from the date of cause of action.

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Considering all these aspects, the appellant– complainant has established that the respondent–accused has committed an offence punishable under Section 138 of N.I. Act.

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In the result, the following:

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ORDER

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i) The appeal is allowed .

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ii) The impugned judgment of acquittal dated 01.02.2018 passed by JMFC II-Court, Karwar, in C.C. No.207/2014 is set aside .

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iii) The respondent-accused is convicted for offence punishable under Section 138 of N.I. Act and he is sentenced to pay a fine of ₹5,10,000/- [Rupees Five Lakhs Ten Thousand only] and in default of payment of fine, sentenced to

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undergo simple imprisonment for a period of six [6] months. Out of the said fine amount an amount of ₹5,00,000/[Rupees Five Lakhs only] be paid to the appellant-complainant as compensation.

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iv) The respondent-accused shall deposit the said fine amount within a period of two [2] months from this day.

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Sd/(SHIVASHANKAR AMARANNAVAR) JUDGE

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PJ/CT-ASC

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List No.: 1 Sl No.: 7

Shri. Vinayak S/O Vishram Naik v. Shri. Vinod S/O Deepak Bilay

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Shri. Vinayak S/O Vishram Naik v. Shri. Vinod S/O Deepak Bilay

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