M/s. Papa and Me vs Sri. E. Akbar

Anand Byrareddy, J.—Heard the learned Counsel for the appellant and the learned Counsel for the respondent. The present appeal is filed by the complainant who had alleged an offence punishable u/s 138 of the Negotiable Instruments Act, 1881 (Hereinafter referred to as the ''NI Act'', for brevity).

It is the case of the complainant that the respondent along with one Zaheer, who is a civil contractor, had approached him and borrowed a sum of Rs. 98,000/- and had executed a promissory note and had agreed to repay the amount with interest at 24% per annum in the presence of the witnesses and again on 16.3.2007, had borrowed yet another sum of Rs. 98,000/- and had executed another promissory note to pay interest on that amount at 24% per annum. It was agreed that the amount would be repaid within 15 days. Thereafter, two cheques bearing nos. 297508 and 297509 for an amount of Rs. 98,000/-, each, drawn on State Bank of Mysore, was issued on 4.4.2007. The same when presented for collection, were dishonoured for want of sufficient funds and Therefore, the complaint. After complying with the procedure prescribed u/s 138 of the NI Act and on summons being issued, the respondent had contested and set up a defence that there was no such transaction where the respondent had borrowed any amounts and he was aware of the manner in which the appellant had acquired the cheques in question and they were apparently being misused. It was also stated that though there were certain money transactions, it was duly settled by Zaheer who had executed a sale deed in favour of the complainant.

It was further contended that the bank account itself was closed six months prior to the presentation of the cheque and therefore, it was a bogus claim on the part of the complainant. However, the respondent, though had entered the box to tender evidence in support of his evidence, except his self serving claim, there was no material evidence produced nor did the respondent chose to examine the said Zaheer and therefore, there was no outstanding and there was no such transaction evidenced by the promissory notes or the cheques in question.

However, it is to be noticed that the respondent did not deny the signature on the cheques and the fact that the account was closed six months prior to the presentation of the cheques was never brought to the attention of the appellant at all. The manager of the bank was examined to establish this fact. That however, would not absolve the respondent of the offence committed if the cheques in question were issued on the account of the respondent and his signature on the cheques were admitted. Therefore, the presumption u/s 139 of the NI Act, was clearly in favour of the appellant. The court below was therefore in error in holding in favour of the respondent on the basis of the bald defence that was set up.

Consequently, the appeal is allowed. The offence punishable u/s 138 of the NI Act stands established. The appellant is convicted for an offence punishable u/s 138 of the NI Act, and is sentenced to pay a fine of Rs. 2,50,000/-, of which Rs. 2,45,000/- shall be paid as compensation to the appellant u/s 357 of the Cr.P.C. and in default of payment of such fine, the respondent shall suffer simple imprisonment for six months.