Smt. Uma Devi vs S. Shivananda

A.N. Venugopala Gowda

The Trial Court has convicted petitioner/accused in a case related to the dishonour of a cheque under S.138 of the Negotiable Instruments Act ("the Act" for short). The Appellate Court has affirmed the said finding. Feeling aggrieved, the accused has filed this Criminal Revision Petition. Indisputably, parties are known to each other. According to the complainant, the accused approached him on 4.3.2006 and requested for a short duration financial help to an extent of Rs. 2,50,000/- by submitting that a loan of Rs. 3,00,000/- has already been sanctioned in her name and she would be receiving the cheque from the bank in 15 days. It was stated that the accused borrowed Rs. 2,50,000/- on 5.3.2006 as hand loan and issued a cheque bearing No. 001862 (Ex.P2), which on presentation was returned vide debit advice Ex.P3, whereafter, demand notice (Ex.P4) was sent and an untenable reply was received (Ex.P6). Alleging commission of offence under S.138 of the Act, complaint was filed. Accused appeared and pleaded not guilty. During trial, complainant deposed as PW.1 and marked Exs.P1 to P6. Accused was examined under S.313 Cr.P.C. During defence evidence, accused deposed as DW.1, her husband deposed as DW.5. 3 other witnesses were examined as DWs.2 to 4. Exs.D1 to D6 were marked.

The defence putforth was that, in the month of July, 2003, herself and her husband approached the complainant seeking financial help of Rs. 1,00,000/- and the complainant lent the said sum and towards repayment of the said amount, she issued a blank signed cheque as insisted by the complainant. It was further stated that, her husband obtained GPA from her mother-in-law in respect of an immovable property, wherein two houses have been constructed and on account of complainant''s insistence, herself and her husband to accommodate the said house on rental basis to a third party, so that the loan amount would be recovered from rent deposit, husband of the accused executed a mortgage deed in favour of the wife of the complainant on 16.8.2003 and that after obtaining the mortgage deed, complainant has collected Rs. 1,00,000/- from one Sri S.N. Sreenivasa Reddy (DW.4) and let out a residential premises through complainant''s wife and the complainant also let out another residential portion to one Sri J. Pasha on 16.8.2003, on a monthly rent of Rs. 1,500/- and advance of Rs. 15,000/- and also received Rs. 10,000/- from the petitioner''s husband and thus the complainant has received Rs. 1,25,000/-, but failed to return the cheque Ex.P2.

Learned Magistrate upon hearing the rival contentions and appreciating the evidence brought on record and finding that the defence putforth by the accused as not probable, found the accused guilty and convicted her for the offence under S.138 of the Act and sentenced to pay fine of Rs. 3,40,000/-, in default, to undergo simple imprisonment for a period of one year. It was made clear that, out of the fine amount, Rs. 3,25,000/- be paid as compensation to the complainant and the balance amount forfeited to the State Government.

Crl. A. No. 826/2008 filed in the Sessions Court, Bangalore, assigned for consideration and disposal of the Fast Track Court, was dismissed on 9.11.2009, on the ground that the accused has not produced any materials to rebut the presumption under S.139 of the Act.

Sri Nataraju, learned counsel appearing for the petitioner contended that the cheque in question was given as security for repayment of loan of Rs. 1,00,000/-, which in fact was discharged by payment of Rs. 1,25,000/- as is clear from the evidence of DW.4 and that, defence evidence has not been correctly appreciated and the presumption raised under S.139 of the Act is unjustified. He submitted that, return of the cheque Ex.P2, was with an intimation that the "account is inoperative" and hence, no offence under S.138 of the Act has been committed. He contended that the findings recorded by the Courts below are perverse and illegal.

Sri A.N. Radhakrishna, learned counsel appearing for the respondent, on the other hand, would contend that the issuance of Ex.P2 being not in dispute and the same having been returned on account of ''insufficient funds'' as is clear from the evidence of DW.3, demand notice vide Ex.P4 having been issued and cheque amount having not been paid, complaint for the offence under S.138 of the Act was filed. Learned counsel submitted that there is correct appreciation of evidence on record and the findings recorded against the accused, by the Trial Court and the Appellate Court are justified. He made submissions in support of the impugned Judgments.

Perused the record. In view of the rival contentions, the point for consideration is, whether the ingredients of the offence enumerated under S.138 of the Act has been met and whether the accused has been able to rebut the statutory presumption contemplated under S.139 of the Act?

There is no dispute with regard to the issuance of Ex.P2 and its return by the petitioner''s bank with debit advice Ex.P3. Evidence of DW.3 shows that, there was no sufficient fund for honouring of Ex.P2 and hence was returned. After the cheque was returned, demand notice vide Ex.P4 was got caused by the complainant. Service of Ex.P4 is not in dispute since it was replied as per Ex.P6.

Ex.P2 was dishonoured by reason of insufficient funds. In view of S.139 of the Act, it has to be presumed that, Ex.P2 was received by the holder for the discharge, in whole or in part of the debt or the liability. The presumption under S.139 of the Act is a rebuttal presumption. The mandate of presumption of S.139 of the Act includes the legally enforceable debt or liability. There can be initial presumption in favour of the complainant.

The case of the accused/petitioner being one of discharge of the debt, towards which Ex.P2 was issued, she has not placed credible evidence in that regard. Ex.P2 having been issued towards discharge of loan liability of Rs. 1,00,000/- as contended, DW.4 was examined. Evidence of DW.4 does not indicate the payment of Rs. 1,00,000/- made by a cheque. If DW.4 had issued any cheque to the complainant or his wife, proof could have been produced with regard to the encashment of the cheque issued by DW.4 as per the instruction of the accused in favour of the complainant or his wife. The alleged payment made by DW.4 for and on behalf of the accused - petitioner has not been established. The further sum said to have been paid by one J. Pasha has not been proved by examining the said person. The evidence of DWs. 1 and 5 is contradictory. The Courts below having found that the statutory presumption under S.139 of the Act has not been rebutted, have rightly found the accused/petitioner guilty of the offence under S.138 of the Act, since the cheque/Ex.P2 was returned by the bank and the payment was not made despite issuance of demand notice. Since the accused did admit issuance of Ex.P2, the statutory presumption has come into play and the same having not been rebutted, the Trial Court is justified in convicting the petitioner for the offence under S.138 of the Act and the Appellate Judge is justified in dismissing the appeal. However, the sentence imposed on the petitioner is excessive. Petitioner has deposited Rs. 1,02,000/-. The same was permitted to be withdrawn by the complainant on 28.1.2011. Keeping in view the facts and circumstances of the case, it would meet the ends of justice to modify the sentence imposed on the petitioner.

In the result, petition is allowed in part. While maintaining the order of conviction passed by the Trial Court and affirmed by the Appellate Court, petitioner is sentenced to pay fine of Rs. 2,52,000/-. Rs. 1,02,000/- having already been remitted, petitioner/accused is granted time up to 30.9.2012 to remit the balance fine amount of Rs. 1,50,000/-. If the balance fine were to be realised, the complainant be paid the said sum as compensation. In default of payment of balance fine amount, petitioner shall undergo the custodial sentence, ordered by the Trial