Dr. B.R. Prabhakar vs Sri. D. Shantha Kumar

Mr. Anand Byrareddy, J.—Perused the record.

The present appeal is filed against the acquittal of the accused for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as ''the NI Act'', for brevity).

The facts alleged are that the accused - respondent is said to have approached the complainant in the month of January 2003 seeking a loan of Rs.2,50,000/- for purposes of clearing earlier loans and on account of personal need. The sum of Rs.2,50,000/- was lent in cash by the complainant to the accused, in the month of February 2003. The respondent had agreed to repay the loan within six months, but had failed to do so and after repeated requests, he is said to have issued five cheques in all, each for a sum of Rs.50,000/-. Two of the cheques were drawn on the State Bank of Mysore, Rajajinagar Branch, two of the cheques were drawn on Citibank, N.A. Bangalore Branch and one cheque was drawn on Malleswaram Co-operative Bank Limited. The cheques were commonly dated as 23.01.2006. When the cheques had been presented by the complainant, two of the cheques of the State Bank of Mysore had been dishonoured for want of sufficient funds and the other three cheques were dishonoured with an endorsement that the account was closed. It is on such dishonour that a legal notice had been issued in terms of Section 138 of the NI Act and failing compliance with the demand, the complaint was filed.

On summons being served, the respondent had entered appearance and had pleaded not guilty and claimed to be tried. The court below had then framed the following point for consideration, namely, ''''Whether the complainant proves that the accused had issued five cheques marked as Exhibit P1 to P5 in respect of legally recoverable debt."

The defence of the respondent was that he had entrusted his cheque books to one Ravishankar, his driver and his driver is said to have misappropriated the cheques which are marked as Exhibits P-l to P5 and the same are sought to be misused by the complainant. This defence appears to have been accepted by the Trial Court on the mere say of the respondent and also on the ground that the complainant who was said to be a Professor in High Voltage Engineering, had been introduced to the respondent by his relative Mukunda and therefore, they were strangers and the complainant having readily provided a loan, could not be believed and secondly, that it was also not established by the complainant that he had the sources of income to keep cash at home exceeding Rs.2,50,000/- and also that the cheques issued were all of the same date and that the handwriting on the cheques differed, which would probablise the case of the respondent that the cheques had been misappropriated and are sought to be misused. It is on these findings that the court below has acquitted the accused.

The tenor of the judgment apparently proceeds as if it was a suit for recovery of money and that it was incumbent on the complainant to have established that he had the source to lend money and that he was seeking to misuse the cheques which had been lost by the respondent. The court below has completely overlooked the presumption under Section 139 of the NI Act which must be dislodged either on the basis of the evidence of the complainant himself or by express evidence tendered by the respondent. It cannot be said that the cheques issued had been denied by the accused with any cogent reasons.

It was not established that the cheques had been misappropriated by his driver Ravishankar as alleged and that the signatures found on the cheques were not disputed by his Banker and that was not the ground on which the cheques had been dishonoured. Therefore, there was no warrant for the court below to have proceeded on such an assumption when the mere dishonour of the cheques was sufficient cause of action for a complaint in respect of an offence punishable under Section 138 of the NI Act. Therefore, the court below was not justified in accepting the defence of the accused when the presumption was in favour of the holder of the cheque, when the same had been issued in discharge of a legal liability. The specious plea and defence of the respondent - accused has been lightly accepted.

Therefore, the appeal is allowed and the judgment of the court below is set-aside. The respondent is found guilty of an offence punishable under Section 138 of the NI Act and is convicted and sentenced to pay a penalty of Rs.5,00,000/- (Rupees Five Lakh only), out of which Rs.4,25,000/- (Rupees Four Lakh Twenty-five thousand only) shall be paid as compensation to the appellant - complainant. On default of payment of such penalty, the accused shall suffer simple imprisonment for a period of six months.