Sri. Abdul Razak vs Sri. Ashok R. Upadhya

Anand Byrareddy, J.—Heard the learned counsel for the appellant. The appellant was the complainant before the trial Court alleging the offence punishable u/s 138 of Negotiable Instruments Act, 1881 (hereinafter referred to as ''N.I. Act'', for brevity). The complainant claims, he is the resident of Dharwad and having known the accused for twelve years, prior to the date of the complaint, and that, in February 2004, the respondent-accused had approached him for a loan, which was lent by the complainant and since there was no repayment on demand by the appellant, a cheque bearing No. 0160474, dated 01.04.2006, for a sum of Rs. 80,000/- drawn on Malaprabha Grameena Bank was issued. When the same was presented for collection, it was returned dishonoured with an endorsement "funds insufficient", in the account of the respondent. It is thereafter, a notice required u/s 138 of the N.I. Act, was issued and on non-compliance of the demand, a complaint was registered and on service of summons, the respondent contested the proceedings. The trial Court had framed the following points for consideration:

i) Whether the complainant proves that accused issued cheque bearing No. 0160474 of Malaprabha Grameen Bank extension counter D.C. Compound branch, Dharwad for Rs. 80,000/- dated 01.04.2006 to the complainant to discharge his legal liabilities and when it was presented to India Overseas Bank extension counter branch, Dharwad for collection, the cheque was returned with an endorsement as "Funds Insufficient", on 20.04.2006 and accused knowing fully well that his cheque will not be honoured willfully issued the above cheque to cheat the complainant and thereby accused has committed an offence punishable u/s 138 of N.I. Act?

ii) What order?

The trial Court had answered the same in the negative, and consequently, the respondent was acquitted. It is that which is under challenge in the present appeal.

The learned counsel for the appellant would point out that the complaint was negated and the accused was acquitted on three grounds. Firstly, that the complainant had admitted that he did not have the capacity to pay a sum of Rs. 80,000/- as on the date, that the loan was said to have been made. Further that the appellant had not produced any material to show that he was an Income Tax assessee. Thirdly, that there was an admission by him as to the cheque in question having been issued in the year 2004, but it was dated 01.04.2006, and therefore, was misused by the appellant as contended by the respondent. It is on these three grounds that the Court below has negated the complaint. The learned counsel would therefore, submit that, all the three grounds were not relevant, insofar as the complaint for an offence punishable u/s 138 is concerned. The defence were stock defence, which were not relevant for consideration, whether or not an offence punishable u/s 138 of the N.I. Act was committed. Since the cheque itself is not disputed, as having been signed by the respondent and having been issued on the account of the respondent, the complaint having been filed within time prescribed u/s 138 of the N.I. Act, and after compliance of other requirements, the ingredients of an offence punishable u/s 138 of the N.I. Act, was made out. The further enquiry as to the financial capacity of the appellant, whether he was an Income Tax assessee and whether, the cheque was issued in the year 2004 and later endorsed being of the year 2006 were questions, which were not relevant as long as there is no tampering of the document, which is not the allegations of the respondent. Hence, he would submit that the trial Court was not justified in negating the complaint.

The respondent has been served and remained unrepresented.

Given the above facts and circumstances, it is wholly unnecessary to appoint counsel amicus curie to represent the respondent to answer the grounds raised as evidently the trial Court was not justified in negating the complaint, when the appellant had prima facie established the commission of an offence punishable u/s 138 of the N.I. Act. The defence, on the basis of which, the complaint was contested were irrelevant, insofar as the offence alleged was concerned. It was not a suit for recovery of money and the offence lies in that dishonour of the cheque, which having been established, it was not necessary to probe the transaction or the financial capacity of the holder of the cheque. The presumption u/s 139 is in favour of the holder of the cheque and further, the presumption that the cheque has been issued in discharge of a legal liability, the reliance being placed on purported admission in cross-examination by the appellant to hold that he was not a man of means, that there was no proof of his income and that cheque possibly endorsed in blank being utilized in the year 2006, being impermissible in law or that there was any irregularity cannot be countenanced. Accordingly, the appeal is allowed. The judgment of the Court below is set aside. The offence punishable u/s 138 of N.I. Act by the respondent is established. The respondent stands convicted for an offence punishable as aforesaid and he shall be punished with a fine of Rs. 1,50,000/-, of which, Rs. 1,45,000/- shall be paid as compensation to the appellant, in terms of Section 357 of Code of Criminal Procedure, 1973. In default of payment of such fine, the respondent shall suffer simple imprisonment for three months.