B. Girish vs S. Ramaiah

K.N. Keshavanarayana, J.—This appeal filed u/s 378(4) of the Criminal Procedure Code, 1973 are directed against the judgment and order dated 18.6.2007 passed by the XXI Additional CMM, Bangalore, in CC No. 17092 of 2004 acquitting the respondent/ accused for the offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the ''N.I. Act'').

The appellant-complainant filed a private complaint u/s 200 of the Cri. PC. against the respondent alleging offence punishable u/s 138 of the N.I. Act inter alia contending that during the month of January 2004, the accused along with one Mr. N. Satish approached him for a hand loan of Rs. 50,000 to meet his urgent need of money for the construction of his house. Accordingly the complainant gave hand loan of Rs. 50,000 to the accused in the presence of the said N. Satish and the accused promised to repay the said hand loan during the month of January 2004. When the complainant approached the accused during the month of June 2004 requesting him to repay the hand loan, the accused issued a cheque dated 14.6.2004 drawn on State Bank of India, Basaveshwaranagar Branch, Bangalore towards repayment of the hand loan. However when the said cheque was presented for encashment, the same was returned unpaid with banker''s endorsement dated 18.6.2004 "Funds Insufficient" and inspite of service of notice, the accused has failed to pay the amount covered under the cheque, as such, he has committed the offence punishable u/s 138 of the N.I. Act.

Upon service of summons issued by the learned Magistrate the respondent/accused appeared before the learned Magistrate and pleaded not guilty for the accusation made against him and claimed to be tried. During the trial, the complainant examined himself as PW1 and got marked Exs.P1 to P7. During his examination u/s 313 of the Cr.P.C. the accused denied all the incriminating circumstances appearing against him in the evidence of the complainant. In defence, the respondent-accused examined himself as DW1. It was the specific defence of the accused that there was no monetary transaction between him and the complainant and that at no point of time he has borrowed a sum of Rs. 50,000 from the complainant nor he had issued the cheque in question to the complainant for discharge of the said loan amount. It was also his defence that the complainant had no financial capacity to lend loan of Rs. 50,000 and that he (accused) is a Government Servant having sufficient income and that his son as well as daughter are also employed, as such, there was no necessity for him to take any loan from the complainant, and that, he has never seep the complainant.

The learned Magistrate after hearing both sides and on assessment of the oral and documentary evidence by the common judgment under appeal, acquitted the respondent-accused on the ground that the circumstances brought out on record in the cross-examination of the complainant and in the light of the defence of the accused, the accused has rebutted the presumption under Sections 139 and 118 of the N.I. Act and since the complainant has not placed any evidence to establish existence of any debt and that the cheque in question was issued for discharge of the said debt, offence u/s 138 of the N.I. Act is not made out. Being aggrieved by the said judgment and order of acquittal, the complainant has presented this appeal on grant of special leave.

Upon service of notice of this appeal, the respondent-accused has appeared through his learned Counsel. I have heard both sides and perused the records.

As noticed above, it is specific case of the complainant that during the month of January 2004, the accused received a hand loan of Rs. 50,000 from him and towards repayment of the said amount, on 14.6.2004, the accused issued the cheque in question, which came to be dishonored for insufficient funds in the account. As noticed by the learned Magistrate, the accused did not seriously dispute the signature found on cheque in question marked as Ex. P2. According to the accused, he had not issued the cheque in question to the complainant for discharge of any debt.

No doubt, u/s 139 of the N.I. Act, the presumption is required to be drawn that the holder of the cheque has received the same for discharge of any debt or other liability As held by the Hon''ble Supreme Court in Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, the presumption u/s 139 of the N.I. Act would not extend as to the existence of debt or other liability. Of course, as per clause (a) of Section 118 of the N.I. Act, it has to be presumed that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, endorsed, negotiated or transferred was accepted, endorsed, negotiated or transferred for consideration and as per clause (b) it shall be presumed that every negotiable instrument bearing a date was made or drawn on such date. Both these presumptions are rebuttable presumptions. As held by the Hon''ble Supreme Court in the aforesaid decision, the question as to whether these presumptions have been rebutted or not have to be considered by looking into the entire material on record and it is not necessary for the accused to prove his defence beyond reasonable doubt nor he is required to step into the witness-box to prove his defence. In the case on hand, it is the specific defence of the accused that there was no monetary transaction between him and the complainant and that he has not received any loan from the complainant at any point of time and the cheque was not issued for discharge of any debt or liability. The accused in his evidence has asserted that the complainant had no financial capacity to pay loan of Rs. 50,000. From the examination-in-chief of PW1, it is clear that he is an employee'' working in Manjunatha Finance Enterprises on a monthly salary of Rs. 3,500. He admits that except this he does not have any source of income. According to the complainant, he borrowed part of the money lent from a Co-operative Credit Society and the remaining amount from others. It is highly unnatural that, the complainant for the purpose of lending substantial sum of Rs. 50,000 to the accused would borrow the same from others. No documentary evidence is produced by the complainant to show that he had borrowed money from the Credit Co-operative Society and others. Admittedly, the accused had no financial capacity to pay Rs. 50,000 nor he had any savings. In the absence of any evidence placed by the complainant, it is highly difficult to believe that he had borrowed money from a Credit Co-operative Society and others for the purpose of lending the loan to the accused. In addition to this, except the cheque in question there is no other documentary evidence to show that the complainant had lent Rs. 50,000 to the accused and the accused and acknowledged the receipt of the same. No contemporary documents have come into existence. When a substantial amount of Rs. 50,000 was lent, it is reasonable to expect that the creditor would insist on the debtor to execute some document evidencing such transaction. Absence of any such documentary evidence would create great amount of doubt about the genuineness of the transaction. Section 269 SS of the income tax Act, 1961 insists that all transactions involving Rs. 20,000 and above, should be through ''account payee cheques''. It is not the case of the complainant that the loan amount was paid by way of account payee cheque and thus there is a violation of Section 269 SS of the income tax Act. There is no material on record to show that there was any agreement for payment of interest. If the complainant had lent Rs. 50,000 by borrowing the same from other sources, under normal circumstances, there would have been certainly an agreement for payment of interest between the accused and the complainant. There is absolutely no evidence on record in this regard. Absence of any such agreement for payment of interest between them also would create great amount of doubt about the transaction. All these circumstances, as rightly pointed out by the learned Magistrate are sufficient to hold that the defence of the accused is highly probable and that the accused has rebutted the presumption u/s 139 of the N.I. Act.

I see no error committed by the learned Magistrate in holding that the complainant has failed to prove the guilt of the accused for the offence u/s 138 of the N.I. Act. The complainant has utterly failed to prove the existence of debt and therefore, the learned Magistrate is justified in acquitting the accused. In this view of the matter, there is no merit in this appeal.