Sathish Hegde vs Dr. B. S. Rathnakar

Shivashankar Amarannavar, J

This appeal is filed by the appellant – complainant challenging the judgment of acquittal dated 26.02.2018 passed in C.C. No. 264/2016 by the Senior Civil Judge and J.M.F.C., Thirthahalli, whereunder, the respondent – accused has been acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short hereinafter referred to as ‘N.I.Act’).

Case of the appellant – complainant is that the respondent – accused and the appellant – complainant were friends and they were known to each other. The respondent – accused had borrowed hand loan of Rs.2,00,000/- from the complainant on 13.07.2010 and for making repayment of the said loan amount, he had issued a cheque bearing No.1129464 dated 13.09.2010 for Rs.2,00,000/- drawn on Vijaya Bank, Thirthahalli to the appellant – complainant. The appellant – complainant presented the said cheque for encashment and it came to be dishonoured with shara “funds insufficient” on 15.09.2010. The appellant – complainant got issued legal notice and it came to be served on the respondent – accused. The respondent – accused did not pay the cheque amount and therefore, the appellant – complainant filed a private complaint against him for offence under Section 138 of the N.I. Act. The learned Magistrate took cognizance of the offence and registered C.C. No. 264/2016 against the respondent – accused for offence under Section 138 of the N.I. Act. The plea of the respondent – accused came to be recorded. The appellant – complainant, in order to prove his case, has examined himself as PW1 and got marked Exs.P1 to P7. The statement of the respondent – accused came to recorded under Section 313 of Cr.P.C. The respondent – accused has examined himself as DW1 and also examined one witness as DW2. One document came to be marked in the cross examination of PW1 as Ex.D1. The Trial Court after hearing the arguments on both sides has passed the impugned judgment of acquittal. The said judgment of acquittal has been challenged in this appeal.

Heard learned counsel for the appellant and learned counsel for respondent – accused.

Learned counsel for appellant would contend that the respondent - accused has admitted his signature on Ex.P.1 – cheque and therefore, a presumption arises under Section 139 of N.I. Act that a cheque has been issued for making payment of legally enforceable debt. He further contends that the respondent - accused has not rebutted the said presumption. Learned counsel further submits that the respondent - accused has not taken any action for taking back his 6 signed cheques and he has not produced any document to show that he had given 6 signed cheques to the complainant as security. Cheque – Ex.P.1 may be of the year 19--, but, respondent - accused has issued the same on 13.09.2010 for making payment of the amount borrowed and the same is dishonoured on the ground of insufficient funds. Without considering this aspect learned Magistrate has erred in passing the impugned judgment of acquittal and therefore, he prays for allowing the appeal and convicting the respondent - accused for offence under Section 138 of the N.I. Act.

Learned counsel for respondent would contend that the respondent - accused has admitted that he had borrowed Rs.1,10,000/- from the appellant – complainant during the year 1998 and he had handed over 6 signed blank cheques to the complainant as security and subsequently, he executed a sale agreement on 25.07.1998 as security for the amount borrowed. He submits that the amount borrowed has been repaid and the complainant has not returned the signed cheques. The year printed in the cheque – Ex.P.1 “19—“ itself indicates that the cheque has been issued prior the year 2000. Said aspect fortifies the defence of the respondent - accused. Evidence of the D.W.2 - Bank Manager also supports the contention of the respondent - accused that cheque book had been issued to the respondent - accused in the year 1998 and Ex.P.1 cheque is 15 years old. He further submits that P.W.1 in his cross-examination has admitted the sale agreement and he not taking any action against the respondent - accused based on the said sale agreement. He also admitted that he has not issued any legal notice to the respondent - accused seeking specific performance of the said sale agreement and that itself indicates that the said sale agreement is cancelled and amount borrowed by the respondent - accused has been repaid to the complainant. Considering all these aspects learned Magistrate has rightly passed the impugned judgment of acquittal. With this he prayed for dismissal of the appeal.

Having heard the learned counsel for the parties, this Court has perused the impugned judgment and the trial Court records.

Considering the grounds urged the following point arises for consideration in this appeal.

“Whether the trial Court erred in acquitting the respondent - accused for offence under Section 138 of N.I. Act?”

My answer to the above point is in the negative for the following reasons:

Ex.P.1 – cheque is dated 13.09.2010 drawn on Vijaya Bank for a sum of Rs.2,00,000/-. Respondent - accused has admitted his signature on Ex.P.1 – cheque. In view of said admission a presumption requires to be drawn under Section 139 of the N.I. Act that the said cheque has been issued towards making repayment of the amount borrowed. Said presumption is a rebutable presumption. It is the defence of the respondent - accused that he has borrowed a sum of Rs.1,10,000/- during June – July, 1998 and at that time he had handed over 6 signed cheques to the complainant and he has repaid the said amount and the complainant has not returned the said cheques and he has used one of the said 6 cheques. It is his further defence that as security he had executed sale agreement – Ex.D.1 and that itself indicates that the transaction between the complainant and respondent - accused is completed and no amount is due by the respondent - accused to the complainant. On perusal of Ex.P.1 – cheque it is seen that in the date column the numerical “19—“ is printed and that itself indicate that the said cheque book has been issued by the Bank prior to the year 2000. Said aspect has been stated by the Bank Manager – D.W.2 in his chief examination. Even P.W.1 in his cross-examination has admitted that the print year in Ex.P.1 – cheque is “19—“, said aspect itself fortifies the defence of the respondent - accused that Ex.P.1 – cheque has been issued in the year 1998 as security to the amount borrowed by the respondent - accused from the complainant. P.W.1 in his cross-examination has admitted the sale agreement as per Ex.D.1 between the complainant and accused and the complainant not taking any action based on the said sale agreement. Even though the said sale agreement is dated 25.07.1998, from the alleged date of borrowing or till the alleged date of repayment through Ex.P.1 – cheque, i.e., 13.09.2010, the appellant – complainant has not taken any action against the respondent - accused based on the said sale agreement. Said aspect itself indicates that the transaction between the complainant and the accused has been completed long back, prior to 13.09.2010 and no amount is due by the respondent - accused to the complainant. Considering all these aspects it is clear that the respondent - accused has rebutted the presumption raised under Section 139 of N.I. Act. As presumption is rebutted by the respondent - accused, the onus has been shifted on the appellant - complainant to establish that he had lent amount to the respondent - accused. The appellant - complainant has not established that he had lent Rs.2.00 lakhs to the respondent - accused on 13.07.2010 and issuance of cheuqe – Ex.P.1 for making payment of the said amount. Considering all these aspects learned Magistrate has rightly acquitted the respondent - accused for offence under Section 138 of the N.I. Act by a reasoned judgment. There are no grounds for setting aside the impugned judgment of acquittal.

In the result, the appeal is dismissed.