Sri Janardhan Heble vs Sri Anand Kanchan

K.N. Keshavanarayana

This appeal by the complainant is directed against the Judgment and Order dated 5.4.2006 passed by the Addl Civil Judge (Jr. Dn.) and JMFC, Udupi in C.C. No. 3641/2001 acquitting the respondent/accused of the charge levelled against him for the offence punishable under section-138 of the N.I. Act

The appellant filed the complaint against the respondent/accused alleging the offence punishable under section-138 of the N.I. Act inter alia contending that the accused had borrowed a hand loan of Rs. 2,50,000/- from the complainant at Udupi in the month of May-2000 undertaking to repay the said ban within six months; that the accused failed to repay the loan amount inspite of (sic) demands made by the complainant; that however the accused issued cheque bearing No. 033391 dated 30.11.2000 for Rs. 2,50,000/- drawn on Udupi Taluk Industrial Co-operative Society Limited in favour of the complainant towards the discharge of the aforesaid loan amount due by him; that when the said cheque was presented for encashment, the same was (sic) with the banker''s endorsement ''insufficient funds''; that though complainant caused e legal notice to tha accused information him about the dishonour of the cheque and calling upon him to pay the amount covered by the cheque, the accused has failed to comply with the demands made therein, thereby the accused, is guilty of the offence punishable under section-13Bof the N.I. Act.

On his appearencs before the learned Magistrate, the accused pleaded not guilty for the charge levelled against him and claimed to be tried. The complainant in support of his case examined himself as PW-1 and produced documentary evidence. The accused examined himself as PW-1. The defence of the accused as could be seen from the tenor of cross-examination of PW-1 and assertions on his part during the course of his evidence, was that there was no monetary transaction between the complainant and himself nor he borrowed sum of Rs. 2,50,000/- from the complainant at any time; that the cheque in question was not issued to the camp''s inapt for discharge of any debt or liability due by him; that he had certain transaction with one Thimmappa Chowkimane, a friend of the complainant; that in relation to the said transaction, he had delivered signed blank cheque to said Thimmappa Chowkimane; that though he cleared the transaction with Thimmappa Chowkimane, the signed blank cheque was not returned to him by said Thimmappa Chowkimane an the premise that the said cheque has been destroyed white washing his shirt in which he had kept the same. But later, the accused came to know that the said Thimmappa Chowkimane has misused the said cheque through the complainant Therefore he contended that he is not guilty of the charge levelled against him.

The teamed Magistrate on assessment of oral and documentary evidence recorded finding that the complainant has failed to prove the existence of debt and that the cheque in question was issued for discharge of the said debt. The learned Magistrate further held that the answers elicited in the cross-examination of PW-1 would clearly indicate that the complainant himself was heavily Indebted to the tune of Rs. 25,00,000/-, therefore it is highly difficult to believe that he was in a financial position to give loan of Rs. 2,50,000/- to the accucsed, as such the complainant was not in a position to advance the loan. In that view of the matter, the learned Magistrate acquitted the accused and dismissed the complaint

Aggrieved by the said judgment, complainant is before this Court in this appeal. I have heard the learned counsel appearing for the appellant as well as the respondent and perused the records and the judgment under appeal.

It is the submission of the learned counsel for the appellant that the judgment under appeal is perverse and illegal on account of non -consideration of material evidence on record. It is his submission that the learned Magistrate has failed to see that admittedly the cheque In question relates to the account held by the accused with a banker and it bears the signature of the accused and therefore by virtue of the provisions of section-139 of the N.I. Act, it has to he presumed that the cheque in question was received by the complainant towards the discharge of the loan due to him by the accused and the burden of rebutting the said presumption is on the accused. It is his further submission that the accused has not placed any acceptable evidence to rebut the presumption and therefore in the absence of any ecidence rebutting the statutory presumption, the learned Magistrate ought to have held that the accused is guilty of the offence under section-138 of the N.I. Act He further contended that the defence theory that the cheque in question had been delivered to one Thimmappa Chowkimane, who misused the same through complainant has not been established and though the accused in his evidence stated that he intend to examine the said Thimmappa Chowkimane as a witness in the case, he has failed to do so. Therefore non-examination of Thimmappa Chowkimane is a circumstance to draw an adverse inference against the accused. It is his further submission that merely because the complainant was shown to be indebted to a tune of Rs. 25,00,000/-, that by itself cannot be a ground to come to a conclusion that he had no financial capacity to advance the loan of Rs. 2,50,000/-. Therefore, the learned Magistrate has recorded the findings without taking into consideration the relevant evidence on record and the circumstances brought out, as such the judgment suffers from perversity and illegality warranting interference by this Court.

On the other hand, the learned counsel for the respondent sought to justify the judgment of acquittal recorded by the learned Magistrate. He contended that the judgment under appeal does not suffer from any perversity or illegality since the learned Magistrate has recorded finding of fact on proper appreciation of oral and documentary evidence and such finding of fact recorded by the learned Magistrate does not warrant interference by this Court. It is his submission that the very admission made by the complainant clearly establishes that he is highly indebted to the tune of Rs. 25,00,000/- to various persons, therefore the learned Magistrate is justified in holding that the complainant had no financial capacity to advance substantial amount of Rs. 2,50,000/-. He further contended that in the absence of any documents to evidence to establish the tending of substantial amount of Rs. 2,50,000/-, the learned Magistrate is justified in holding that the presumption under section-139 of the Act stood rabutted, therefore the judgment under appeal does not call for interference by this Court.

In the facts and circumstances of the case and in the light of the submissions made on both sides, the point that arises for my consideration is "whether the judgment under appeal suffers from any perversity and illegality calling for irterfernce by this Court "?

As could be seen from the suggestions put to PW-1 in the cross-examination and also the assertions on the part of the accused in his evidence in-chief, it is manifestly clear that the cheque in question relates to an account held bv the accused in Udupi Taluk Industrial Co-operative Society Limited and it bears his signature. Under section-139 of the N.I. Act, Court is required to presume, unless the contrary is proved, that the holder of the cheque received the same for discharge in whole or in part of any debt or liability, Of course, the said presumption is a rebuttable one. It is fairly well settled law that the accused in order to rebut the said presumption is not required to examine himself nor law requires that he should rebut the said presumption by positive evidence The accused is entitled to rely on the circumstances brought out in the evidence of the prosecution/complainant to point out that the presumption is rebutted. The accused in order to rebut the said presumption will have to show that there was no debt, or that the cheque in question was not issued for discharge of any debt or liability. It is also fairly well settled that the standard of proof for proving the defence is preponderance of probability and not proof beyond reasonable doubt. In the case on hand as noticed supra, the learned Magistrate acquitted the accused on two grounds viz., (i) The complainant has Failed to prove the existence of debt; and (ii) The complainant had no financial capacity to advance Rs. 2,50,000/-.

As could be seen from the records, except the cheque Ex.P1, there is no other documentary evidence to evidence lending of Rs. 2,50,000/-. It is highly difficult to believe that substantial sum of Rs. 2,50,000/- would be lent without obtaining contemporary documents, According to the complainant, loan of Rs. 2,50,000/- was paid by way of cash, Section 269(ss) of the Income Tax Act directs that no amount of loan exceeding Rs. 20,000/-shall be paid or received except through an account payee cheque or Demand Draft. According to the complainant, he is an income tax assesses. Admittedly, the loan in question was not paid by means of account payee cheque or demand draft, It is admitted by PW-1 that he was indebted to a tune of Rs. 23,00,000/- as on the purported date of the loan given to the accused. According to the evidence of PW-1 in order to pay loan of Rs. 2,50,000/- to the accused, he borrowed money from his friends. This also shows that the component had no money of his own to land to the accused. It is highly unnatural that a person in order to lend money to another, would borrow the same from others It is also not the case of the complainant that the loan to the accused was advanced for interest. It is not his say that there was any agreement for payment of interest This conduct is also highly unnatural when complainant himself said to have taken loan from his friends for the purpose of lending to the accused. Therefore the very loan transaction as sought to be made out by the complainant is highly doubtful. He had no financial capacity to lend. In the absence of any documentary evidence to evidence the lending, in my opinion, the learned Magistrate is justified in holding that the statutory presumption under section-139 stood rebutted. The findings recorded by the learned Magistrate ere sound end reasonable having regard to the evidence on record. The judgment of the learned Magistrate does not suffer from any perversity or illegality. Therefore it does not call for interference by this Court. Therefore the appeal is dismissed.