THE COMMISSIONER vs. M/S AMARA PREMA

The parties to this appeal are referred to as per their rank before the trial Court.

Complainant and accused were known to each other. It is stated by the complainant that, on 1.10.2010, accused borrowed a sum of Rs.3 lakhs from the complainant to meet his family necessities. He agreed to repay the same after eight months with interest at the rate of 21% p.a. But, accused did not pay the same. When complainant requested to pay the amount borrowed from him, accused issued two cheques bearing No.014039 and 014040 dated 9.8.2010 for Rs.1,50,000/- each. When the said cheques were presented by the complainant for

The jurisdictional Magistrate took cognizance of the offence, recorded the sworn statement. Based upon that, summons came to be issued to the accused and he appeared before the trial Court and was enlarged on bail. Accused pleaded not guilty for the offence alleged.

To prove the case of the complainant, he himself entered the witness box as PW.1 and also examined two witnesses in the shape of PWs. 2 and 3 and got marked Ex.P1 to P13, closed his evidence.

After recording the statement of the accused under Section 313 of Cr.PC, accused himself entered the witness box as DW.1 to lead defence and also examined three witnesses as DW1 to4. On behalf of the defence, Ex.D1 to D5 were marked.

The learned trial Court, on hearing the arguments and on assessment of the evidence, held that complainant has not discharged the initial burden of presumption available under Sections 118 and 139 of the NI Act and has concluded that there is no merit in the case of the complainant. Therefore, answered the points for consideration in the negative and ultimately, acquitted the accused of the charge levelled against him. This is how now the appellant-complainant is before this Court challenging the impugned judgment.

The learned counsel for the appellant, with all force submits that, when accused admits his signature and the cheque belongs to him, that is sufficient to draw presumption under Secs.118 and 139 of NI Act, that, the cheque was issued in favour of the complainant in discharge of the loan availed from the complainant. He submits that, the trial Court has misconceived the said presumption which is available under the provisions of NI Act and has wrongly acquitted the accused holding that complainant has failed to discharge the burden.

In support of his submission, the learned counsel for the appellant relies upon the allegations made in the complaint as well as evidence lead by the complainant and his witnesses so also documents. He also relied upon the judgment of the Hon'ble Apex Court reported in Rajesh Jain vs. Ajay Singh reported in AIR Online 2023 SC 807.

Repelling this submission, the learned counsel for the respondent-accused supported the reasons assigned by the trial Court in acquitting the accused. As per the evidence placed on record, according to him, there were no transactions in between the complainant and the accused. The transaction was with the father of the complainant-Jayanna through his father-in-law and the amount so borrowed by the accused from Jayanna has already been repaid by him. The cheques which were given as security to Jayanna were misused by the complainant. He submits that, it is a collusive complaint filed by complainant and his father so as to extract money by filing the complaint. According to him, the complainant had no financial capacity to advance the loan and at the relevant time, he was not having sufficient funds. Even it is submitted that, though it is the case of the complainant that he has availed loan from Corporation Bank to the extent of Rs.2 lakhs but, the said amount was never withdrawn by the complainant to advance the loan to the accused. When the complainant states that he was having

It is submitted that this well reasoned judgment shall not be interfered in this appeal. Hence, prays to dismiss the appeal.

I have taken note of the rival submissions canvassed by both the side and meticulously perused the records.

Since, in this case, the execution of the cheque is admitted which is not under dispute, the limited question that is to be considered to decide this appeal is:

Presumptions as to negotiable instruments.—Until the contrary is proved, the following presumptions shall be made:—

Presumption in favour of holder.— It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section138 for the discharge, in whole or in part, of any debt or other liability.

As it is a case of dishonour of a cheque, it is expected by the Courts dealing with such cases to consider that whether the ingredients of aforesaid section are complied by the complainant and if so, whether the

On reading the aforesaid provisions, it is the duty of the complainant to prove regarding the drawing of a cheque by a person on do account maintained by the accused with the banker for the payment of any amount of money to another from that account, the cheque being drawn by the accused for the discharge in whole or in part of any legally enforceable debt or other liability, on presentation of the said cheque, the amount to be paid from that account and when presented the said cheque returns unpaid either because of amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds that amount. Thereafter, a notice by the payee of the holder of the cheque in due course making a demand to pay the cheque amount within stipulated time and filing of a complaint within the stipulated time from the complainant.

These ingredients are quite necessary to be complied by the complainant as contemplated under Section 138 of the NI Act.

On reading the aforesaid Sections 118 and 139 of NI Act, the legal burden is on the complainant to prove the aforesaid ingredients which is constant throughout the trial. That means, it is for the complainant to establish the facts and contentions which will support his case. Once this burden is discharged by the complainant, then the onus shifts on the accused by leading rebuttal evidence to disprove the case of the complainant, because, the presumptions which is available is a rebuttable presumption.

Keeping the aforesaid legal position, let me analyze the evidence placed on record by both the side to ascertain about proof of the respective case of the complainant and the defence accused as the case may be.

To substantiate the case of the complainant, PW.1 being the complainant, has spoken in line with the contents of the complaint and he relied upon Exs.P1 to P8. So far as cheques are concerned, they are marked at Ex.P1 and P2 both are dated 9.8.2010 for Rs.1,50,000/- each. The said cheques are issued in respect of the Account NO.1232 of Vyavasaya Sahakara Seva Bank Niyamitha, Somwarpet Branch. Likewise, Ex.P3, P4 and P5 are the endorsements with regard to the dishonour of the aforesaid two cheques Ex.p1 and P2. The other documents are postal receipts, copy of the notice etc.,

Thus, issuance of the cheque is not specifically denied by the accused but, according to him, he has not issued the cheque in the name of the complainant but, towards loan raised by him from Jayanna, the father of complainant, as security, he issued blank cheques which were misused by the complainant.

On reading the cross-examination directed to PW.1, though he supports his case, but, he deposed that,

When such a capacity of the complainant having sufficient funds to advance the loan as on 1.1.2010 is not proved, then whether such a loan was being availed by the accused and these two cheques were issued in discharge of the said loan is the question to be ascertained.

As per the defence of the accused, he borrowed a loan of Rs.2,60,000/- from Jayanna about 10 years back and he has repaid the same through his father-in-law Basavakumar's account. To that effect, he has examined his own witnesses DWs. 2 to 4. DW.4 his father in law has come before the trial Court and deposed about borrowing a loan by the accused from the father of the complainant

No effective cross-examination is directed to these DW.2 to 4 so as to disbelieve their evidence given in their respective examination-in-chief. Though, it is stated by the complainant that accused agreed to repay the loan amount after eight months together with interest at 21% p.a. but, during the course of his evidence as rightly pointed by the trial Court, when the alleged loan was advanced nobody was present except PW.1 AND DW.1. But, no witness has spoken about the loan transaction alleged by the complainant.

The presumption which is available under Section 139 of NI Act is more stronger in favour of the accused than the complainant because the said cheques were issued with signature and the amount was kept blank, date was kept blank i.e. in favour of Jayanna. To prove that Jayanna never received those cheques towards the loan advanced by him, Jayanna being the complainant's father, would have been examined by the complainant to disprove the said presumption. Whereas, DWs. 2 to 4, being the witnesses on behalf of the accused have supported the defence of the accused. The presumption which is available under Section 139 of NI Act to the accused is rebutted by adducing the evidence of these DWs.2 to 4 by the accused which is a rebuttable presumption.

No doubt, the learned counsel for the accused relied upon the aforesaid judgment in Rajesh Jain vs. Ajay Singh case which specifically envisages that, it is a rebuttable presumption and the burden is on the accused

Thus, the complainant has miserably failed to discharge his evidentiary burden and thus, it cannot taken that he has proved his case on the presumption which is available under the provisions of NI Act.

The learned trial Court has rightly assessed the evidence placed on record by the complainant and accused and given the sound findings with regard to the presumption which is available in favour of the accused and he has discharged his evidential burden by adducing the evidence of DW 2 to 4. He also has spoken to that effect by deposing evidence as DW.1. Merely because PW.2 and 3 have spoken before the Court and no reply was given to the demand notice is not sufficient to believe the case of the complainant. The evidence of PWs. 1 to 3 is self-serving and cannot be accepted that the legal evidential burden cast on the complainant is discharged by him with proper evidence. Hence, the point raised supra is answered in favour of respondent-accused and against the complainant. There is no merit in this appeal and accordingly, it fails.