Sri Prasanna Kumar C K Vs Sri Noorulla Shariff

SRI. PRASANNA KUMAR C.K. W/O. SRI. KARIYANNA, AGED ABOUT 46 YEARS, R/AT NO.SHABARAGIRI NILAYA, 3^RD MAIN, 3^RD CROSS, 3^RD BLOCK, KUVEMPU NAGARA, TUMAKURU – 572 103.

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… APPELLANT

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Digitally signed by SAMREEN AYUB DESHNUR Location: HIGH COURT OF KARNATAKA, DHARWAD BENCH

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(BY SRI. NARAYAN M.NAIK, ADV.)

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AND:

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SRI. NOORULLA SHARIF S/O. M.JAFFER SHARIF, MAJOR, R/AT. M. JAFFER SHARIF AND SONS, GUNS AND CARTRIDGES SELLERS (UPSTAIRS), NEAR SHARADA PLAY WOOD, VIVEKANANDA ROAD,

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NC: 2025:KHC:45138 CRL.A No. 1418 of 2022

HC-KAR

TUMAKURU – 572 101.

…RESPONDENT

(BY SRI. PRAVEEN S. ADV.)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CODE OF CRIMINAL PROCEDURE, PRAYING TO, SET ASIDE THE JUDGMENT AND ORDER PASSED BY VI ADDL. DISTRICT AND SESSIONS JUDGE, AT TUMKURU DATED 21.04.2022 PASSED IN CRL. APPEAL NO.60/2021 AND SET ASIDE THE JUDGMENT AND ORDER DATED 15.11.2021 IN C.C.NO.1411/2018 PASSED BY THE IIND ADDL. CIVIL JUDGE AND JMFC AT TUMKURU AND ETC.,.

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THIS CRIMINAL APPEAL HAVING BEEN HEARD AND RESERVED ON 03.07.2025 BEFORE THE BENGALURU BENCH AND COMING ON FOR PRONOUNCEMENT OF JUDGMENT BEFORE THE DHARWAD BENCH, THIS DAY, THE COURT DELIVERED THE FOLLOWING:

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CORAM: HON'BLE MR. JUSTICE S RACHAIAH

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NC: 2025:KHC:45138 CRL.A No. 1418 of 2022

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HC-KAR

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CAV JUDGMENT

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This appeal is filed by the appellant, being aggrieved by the order dated 21.04.2022 in Crl.A.No.60/2021 on the file of the VI Addl. District and Sessions Judge, Tumkur.

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The ranking of the parties in the Trial Court, henceforth, will be considered as per their rankings in the Court for convenience.

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The Factual Matrix of the case:

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The case of the complainant is that, the accused and himself are known to each other. Pursuant to the said relationship, the accused had approached the complainant to borrow hand loan. As per the request of the accused, loan of Rs.6,00,000/- was paid on 27.11.2016. The accused undertakes to return the said amount within six months. However, the accused failed to return the amount within the said period. Thereafter, he issued a cheque dated 11.10.2017 drawn on ICICI Bank. It was presented on the said date. However, it was returned with an endorsement as “Funds insufficient”.

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HC-KAR

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The complainant got issued a legal notice on 21.10.2017, the notice was returned on 27.10.2017. On receipt of said notice, the accused neither repaid the amount nor replied to the said notice. Therefore, the complainant filed a complaint before the Jurisdictional Magistrate. The Trial Court convicted the accused, he preferred an appeal before the Appellate Court. The Appellate Court acquitted the accused. Hence, this appeal.

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Heard Sri Narayan M. Naik, learned counsel for the appellant and Sri Praveen S., learned counsel for the respondent.

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It is the submission of learned counsel for the appellant that, once the cheque and signature are admitted, the presumption has to be raised in favor of the complainant. The accused has to rebut the presumption by leading cogent evidence. In the present case, the accused has not led any cogent evidence to rebut the presumption, except making some suggestions that he had received the amount as stated in the cheque.

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HC-KAR

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It is further submitted that the Appellate Court has failed to take note of the settled principle of law that, initially, the complainant is not required to prove the case about his financial capacity. However, the Appellate Court mainly concentrated on the financial capacity of the complainant, even though the accused has not rebutted the presumption. Therefore, the impugned judgment is required to be set aside.

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Per contra, learned counsel for the respondent vehemently, justified the judgment of acquittal passed by the Appellate Court and further, he submitted that, the accused has rebutted the presumption by raising the valid defence. In fact, three cheques were issued to the Bank as a security for having obtained the vehicle loan. Two cheques have been misused and filed a false case.

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It is further submitted that the complainant had no financial capacity to advance such a huge amount. The said aspect has also been considered by the Appellate Court properly and acquitted the accused by reversing the Trial Court judgment. Therefore, it is not appropriate to

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HC-KAR

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interfere with the findings of the Appellate Court. Making such submissions, learned counsel for the respondent prays to dismiss the appeal.

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Having heard learned counsels for the respective parties and also perused the findings of the Appellate Court in allowing the appeal by setting aside the judgment of conviction passed by the Trial Court, it is appropriate to mention the proposition of law on the subject.

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The Hon’ble Supreme Court in the case of BASALINGAPPA v. MUDIBASAPPA¹ , held in para No.25, which reads thus:

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“25. We having noticed the ratio laid down by this Court in the above cases on Sections 118(a) and 139, we now summarise the principles enumerated by this Court in following manner:

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25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability.

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25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof a for

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1 (2019) 5 SCC 418

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NC: 2025:KHC:45138 CRL.A No. 1418 of 2022

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HC-KAR

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rebutting the presumption is that of preponderance of probabilities.

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25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

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25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden.

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25.5. It is not necessary for the accused to come in the witness box to support his defence.”

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The Hon’ble Supreme Court, in another case Bir Singh v.

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Mukesh Kumar² , held in paragraph Nos.18 to 24, which read thus:

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“18. In passing the impugned judgment and order dated 21-11-2017, the High Court misconstrued Section 139 of the Negotiable Instruments Act, which mandates that unless the contrary is proved, it is to be presumed that the holder of a cheque received the cheque of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability. Needless to mention that the presumption

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2 AIR 2019 SC 2446

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contemplated under Section 139 of the Negotiable Instruments Act, is a rebuttable presumption. However, the onus of proving that the cheque was not in discharge of any debt or other liability is on the accused drawer of the cheque.

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19. In Hiten P. Dalal v. Bratindranath Banerjee, this Court held that both Sections 138 and 139 require that the court shall presume the liability of the drawer of the cheques for the amounts for which the cheques are drawn. Following the judgment of this Court in State of Madras v. A. Vaidyanatha Iyer, this Court held that it was obligatory on the court to raise this presumption.

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20. Section 139 introduces an exception to the general rule as to the burden of proof and shifts the onus on the accused. The presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of innocence, which requires the prosecution to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law and presumptions of fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact as held in Hiten P. Dalal.

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21. Presumption of innocence is undoubtedly a human right as contended on behalf of the respondentaccused, relying on the judgments of this Court in Ranjitsing Brahmajeetsing Sharma v. State of

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HC-KAR

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Maharashtra and Rajesh Ranjan Yadav v. CBI. However the guilt may be established by recourse to presumptions in law and presumptions in facts, as observed above.

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22. In Laxmi Dyechem v. State of Gujarat, this Court reiterated that in view of Section 139, it has to be presumed that a cheque was issued in discharge of a debt or other liability but the presumption could be rebutted by adducing evidence. The burden of proof was however on the person who wanted to rebut the presumption. This Court held “however, this presumption coupled with the object of Chapter XVII of the Act leads to the conclusion that by countermanding payment of a post-dated cheque, a party should not be allowed to get away from the penal provision of Section 138 of the Act”.

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23. In Kumar Exports v. Sharma Carpets, this Court reiterated that there is a presumption that every negotiable instrument duly executed, is for discharge of a debt or liability, but the presumption is rebuttable by proving the contrary. In the facts and circumstances of the case it was found that the cheque in question was towards advance for purchase of carpets, which were in fact not sold by the payee of the cheque to the drawer, as proved from the deposition of an official of the Sales Tax Department, who stated that the payee had admitted that he had not sold the carpets.

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24. In K.N. Beena v. Muniyappan, this Court held that in view of the provisions of Section 139 of the Negotiable Instruments Act read with Section 118

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HC-KAR

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thereof, the Court had to presume that the cheque had been issued for discharging a debt or liability. The said presumption was rebuttable and could be rebutted by the accused by proving the contrary. But mere denial or rebuttal by the accused was not enough. The accused had to prove by cogent evidence that there was no debt or liability. This Court clearly held that the High Court had erroneously set aside the conviction, by proceeding on the basis that denialsaverments in the reply of the accused were sufficient to shift the burden of proof on the complainant to prove that the cheque had been issued for discharge of a debt or a liability. This was an entirely erroneous approach. The accused had to prove in the trial by leading cogent evidence that there was no debt or liability.”

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On careful reading of the dicta of Hon'ble Supreme Court, it makes it clear that, the initial burden would be on the accused to rebut the presumption, once, he admitted the signature and the cheque.

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In the present case, the accused admitted his signature on the cheque. However, he denied the transaction. Mere denial of the transaction is not sufficient to rebut the presumption. The contention of the accused in this case is that, the complainant had stated in his evidence that, loan was issued for the purpose of improving the brick

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HC-KAR

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factory and also for agricultural purpose of the accused. However, the accused contended that he had sold the brick factory in the year 2015 and produced Ex.D2, which is sale deed. Reason given by the complainant for advancing the loan might not be correct. However, that itself would not invalidate or nullify the monetary transaction. The accused may take a different view that the amount was not given to the particular purpose, however, he has to prove that the cheque was issued other than the present transaction.

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Further, the accused contended that, he had issued three cheques to T.V.S.S. Sahakara Bank for having obtained a vehicle loan. However, the said contention has not been proved by the accused. If the accused had really issued those cheques to the T.V.S.S. Sahakara Bank as a security, he should have produced the receipt for having issued those three cheques as a security. Mere alleging that those cheques were issued to the Bank without proving the said contention, certainly, would defeat the defence of the accused. The Appellate Court failed to

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NC: 2025:KHC:45138 CRL.A No. 1418 of 2022

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HC-KAR

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take note of the said aspect and passed the impugned judgment, which is liable to be set aside. Hence, I proceed to pass the following:

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ORDER

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i) The Criminal Appeal is allowed .

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ii) The judgment and order dated 21.04.2022 in Crl.A.No.60/2021 on the file of the VI Addl. District and Sessions Judge, Tumkur, is hereby, set aside.

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iii) The judgment of conviction and order on sentence dated 15.11.2021 in C.C.No.1411/2018 passed by the II Addl. Civil Judge and JMFC at Tumakuru, is confirmed.

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iv) The Registry is directed to transmit the record to the Trial Court for necessary action.

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Sd/(S RACHAIAH) JUDGE

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BSS

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List No.: 19 Sl No.: 4

Sri Prasanna Kumar C K v. Sri Noorulla Shariff

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Sri Prasanna Kumar C K v. Sri Noorulla Shariff

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