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TMI Blog2021 (1) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and admitted by appellant in cross-examination therefore, the presumption cast on the respondent under section 139 of the Act clearly says that unless the contrary is proved, 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 . Unless the contrary is proved it is for the respondent to establish by way of cogent evidence either orally or through document to the contrary thereby rebutting the presumption cast under section 139 of the Act. In the present case, it is the case of appellant that right from the date of issuance of legal notice on 15-9-2008, there is clarity when the loan amount was given, in what manner loan amount was given and the post dated cheque having been issued by the respondent on 1-8-2008 by mentioning the date as 16-8-2008 and in order to show abundant caution, the appellant has got indorsed behind the back of cheque, wherein the respondent has countersigned stating that he has received ₹ 3,00,000/- in cash and promises to honour this cheque. This fact of the matter of admitting the signature by respondent and cheque being drawn on the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convicted for the offence punishable under section 138 of the Act. - Crl. Appeal No. 2908 of 2011 - - - Dated:- 23-10-2020 - Pradeep Singh Yerur, J. For the Petitioner : P.G. Chikkanaragund, Adv. For the Respondent : S.N. Banakar, Adv. JUDGMENT 1. This appeal has been preferred by the complainant being aggrieved by the judgment of acquittal passed by the Prl. Civil Judge and JMFC at Dharwad in C.C. No.156/2009 dated 15-10-2011, for the offence punishable under Section 138 of the Negotiable Instruments Act. 2. Brief facts leading to the filing of this appeal are as under: It is the case of appellant that he was well acquainted with respondent and as respondent was in need of financial assistance he approached the complainant for loan amount, to take on lease adjacent hotel and furnish and develop the same near the existing Shree Siddivinayaka Enterprises. The respondent had sought for hand loan of three lakhs on 1-8-2008. Acceding to the request of respondent, appellant paid sum of ₹ 3,00,000/- in one lump sum of amount by way of cash to the respondent. It is the case of appellant that respondent had agreed to repay the said amount on 16-8-2008 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired under section 138 of NI Act by the appellant. Therefore, the acquittal order deserves to be set aside. Learned counsel further contended that the trial Court has failed to appreciate the admission made by respondent with regard to his signature on the cheque and the account maintained by him which thereby cast the presumption under section 139 of the Act in favour of the appellant. 10. Learned counsel further contends that the trial Court has misdirected itself in coming to a conclusion that respondent has rebutted the presumption cast on him which is erroneous as no cogent oral or documentary evidence has been produced nor elicited during the cross examination of PW.1/complainant. He had further contended that the trial Court has further caused great miscarriage of justice in coming to a conclusion that by production of EX.D.1 and merely by admission of the signature on the said document by appellant, the burden of proof shifted to the appellant. 11. Learned counsel has further contended that the trial Court has erred in coming to a conclusion that the amount of ₹ 50,000/- was paid by respondent to the appellant. 12. He has further contended that merely by non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount involved was only ₹ 40,000/- and the respondent has repaid by adding another ₹ 10,000/. Therefore, there is no further amount to be paid to the appellant. It is further contention of learned counsel for the respondent that the order of the trial Court is not tainted with any infirmity or illegality and there is no arbitrariness and perversity in passing the order of acquittal. 17. In support of his case learned counsel has relied on the following judgments:- (i) Krishna Janardhan Bhat v. Dattatraya G. Hedge [2008] 2 SCC (Crl) 166. (ii) Vishal v. Prakash Kadappa Hegannawar 2020 (3) KCCR 2373. (iii) Anss Rajashekar v. Augustus Jeba Ananth 2019 (3) KCCR 2126 (SC). (iv) K.S. Nagarajappa v. Dibbada Kotresh 2020 (4) KCCR 2540. (v) Yeshwanth Kumar v. Shanth Kumar N. 2020 (1) KCCR 505. 18. On the basis of these submissions and the judgments stated above, he seeks for dismissal of this appeal and to confirm the order of acquittal passed by the trial Court. 19. Having heard the learned counsel for the appellant and the learned counsel for respondent, the points that arise for consideration before this Court are: (i) Whether the appellant has prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , thereby it is the contention of the respondent that he has rebutted the presumption cast on him. 24. On careful examination of the evidence as to whether PW.1 has admitted the contents of Ex.D.1, the answer to the same is in the negative for the reason PW.1 has categorically denied that any such payment of loan of ₹ 40,000/- having been advanced to the respondent and also categorically denies the acceptance of ₹ 50,000/- as portrayed in Ex.D.1 being received by the appellant. In fact PW.1 has answered that he does not know as to whom this document EX.D.1 was issued and has further stated that he does not know how this document came into possession of the respondent. Further, in the cross examination of PW.1, the witness has answered that cheque in question Ex.P.1 has been issued towards repayment of the hand loan which is a legally existing debt and liability. 25. On the question posed by the respondent that Ex.P.1 was issued as a security for the earlier transaction the same has been denied by the witness. 26. Respondent has not stepped into the witness box to adduce the evidence neither has he produced any document on his behalf. 27. On careful examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion therefore, the presumption cast on the respondent under section 139 of the Act clearly says that unless the contrary is proved, 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 . Unless the contrary is proved it is for the respondent to establish by way of cogent evidence either orally or through document to the contrary thereby rebutting the presumption cast under section 139 of the Act. In this view of the matter, it is necessary to extract proviso (a), (b) and (c) of Section 138 of the Act, which reads as under : Dishonour of cheque for insufficiency, etc., of funds in the account. -Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability, is returned by the bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date and before its maturity; (d) as to time of transfer - that every transfer of a negotiable instrument was made before its maturity; (e) as to order of indorsements - that the indorsements appearing upon a negotiable instrument were made in the order in which they appear thereon; (f) as to stamp - that a lost promissory note, bill of exchange or cheque was duly stamped; (g) that holder is a holder in due course- that the holder of a negotiable instrument is a holder in due course : Provided that, where the instrument has been obtained from its lawful owner, or from any person in lawful custody thereof, by means of an offence or fraud, or has been obtained from the maker or acceptor thereof by means of an offence or fraud, or for unlawful consideration, the burden of proving that the holder is a holder in due course lies upon him. 33. On going through these proviso state above the intention of legislature is very clear that once a cheque has been issued and the signature admitted, the presumption under section 139 of the Act comes into play whereby the issuance of the cheque is towards discharge of legally recoverable debt or liability. The burden or proof shi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has categorically denied that it was not required for him to mention as it was a personal loan given by cash. Merely because the appellant has not mentioned or stated in the Income-tax Returns filing about the payment of hand loan to respondent, that by itself will not prove the fact that there did not exist a legally subsisting debt or liability. The other contention taken by respondent which has been accepted by the trial Court is that cheque is issued as a security towards past loan transaction between the parties. So it is the finding of trial Court that this cheque is given as a security which is the probable defence raised by respondent and accepted by trial Court shifting the burden of proof to the appellant. This theory of the cheque having been given as security has not been established by respondent by any cogent evidence which can be believed by the Court. 37. The trial Court has further came to a conclusion that nothing prevented appellant to get the cheque Ex.D.1 filled up in the hand writing of respondent. Thereby adding to the preponderance of probability raised by respondent against the appellant the conclusion of the trial Court that the appellant has used the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a believable theory. In the absence of any material to show that there is existed any earlier transaction other than the present one stated by the appellant. 41. Therefore, the Court below has materially erred in not properly appreciating and considering the presumption in favour of complainant-appellant herein that there exists a legally enforceable subsisting debt or liability as per Section 139 of the Act. Further, it is relevant to note here that the trial Court has committed a serious error in shifting the burden of proof to prove the debt or liability and the existence of a debt without appreciating the mandate of legislation as laid down in Section 139 of the Act. Section 139 of the Act is an example of reverse onus clause and therefore once issuance of cheque has been admitted and signature on the cheque has been admitted and in this case transaction of loan is also admitted. There is always a presumption in favour of appellant-complainant that there exists a legally enforceable debt or liability and thereby the burden is on the respondent-accused to rebut such presumption by leading cogent evidence either oral of documentary. Accordingly, point Nos.1 and 2 are answer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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