Arif Abdulsalam Mujawar vs Damodar Narvekar

Anand Byrareddy, J.—Heard the learned Counsel for the appellant and the learned Counsel for the respondent. The appellant was the complainant before the trial court alleging an offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the ''NI Act'', for brevity). The case of the complainant was that the respondent had purchased old second hand scrap tanks worth Rs. 4,25,000/- and had paid Rs. 25,000/- as part payment and promised to pay the balance amount of Rs. 4,00,000/- within fifteen days and had taken delivery of the goods. However, he had failed to make payment and on continuous demand, he had issued a cheque for Rs. 4,00,000/- dated 28.3.2009 bearing cheque no. 052083 drawn on Catholic Syrian Bank Limited, Panjim Branch. The same, when presented for collection, was dishonoured for want of sufficient funds and therefore, on receipt of intimation of such dishonour, the appellant had-issued a legal notice dated 13.4.2009 making a demand and when there was non-compliance with the same, the complaint had followed. The respondent had contested the complaint. The appellant had examined himself as a witness and marked documents in support of his case. The respondent did not lead any evidence in support of his defence. The court below had framed the following points for its consideration:-

Whether the complainant proves that the accused has issued cheque in question towards legally recoverable debt?

Whether the complainant is entitled to the relief?

The court below answered the above points in the negative. The court below had proceeded to hold that the complainant was required to establish the transaction and there was no evidence tendered as regards the transaction of the sale of scrap tanks to the accused, except relying on the cheque in question in support of the complaint. Notwithstanding the presumption that arises in favour of the holder of the cheque u/s 139 of the NI Act and notwithstanding the judgment of the apex court in Rangappa Vs. Sri Mohan, , which was cited by the complainant in support of his case, the court below has proceeded to negate the complaint and has acquitted the accused. It is this which is under challenge in the present appeal.

From an examination of the reasoning of the court below, it is evident that the court below has misread the state of the law in holding that the burden was on the appellant to establish the transaction in the first place before seeking the benefit of the presumption u/s 139 of the NI Act. On the other hand, the position is otherwise, in that, the presumption is in favour of the holder of a cheque that the same has been issued in discharge of a legal liability. It is for the accused to demonstrate either by tendering positive evidence or even with reference to the evidence of the complainant himself, that the preponderance of probabilities would indicate that there was no such transaction, in respect of which, the cheque could have been issued. This was totally absent in the appellant not having tendered any evidence nor having raised any such defence by way of reply to the notice issued in the first instance) and the mere assertion at the hearing of the complaint, by way of argument, can hardly be accepted by the court below in holding that it was incumbent on the appellant to have established the transaction. Therefore, there is no hesitation in holding that the reasoning of the court below is incorrect and cannot be sustained. Consequently, since the issuance of the cheque and the signature on the cheque is not denied and that the cheque having been issued on the account of the respondent also not being denied, the ingredients of Section 138 of the NI Act, having been complied with, there was no impediment in holding that the appellant had established his case for an offence u/s 138 of the NI Act.

*Respondent

The appeal is allowed. The appellant is convicted and is sentenced to pay a fine of Rs. 5,00,000/-, of which Rs. 4,95,000/- shall be paid as compensation to the appellant u/s 357 of the Code of Criminal Procedure, 1973, and in default of payment of fine, the respondent shall undergo simple imprisonment for six months.

*Corrected vide court order dtd. 03.02.2014 Sd./-Hon''ble KNPJ

The amount of fine shall be payable within four weeks from the date of receipt of a copy of this order.