V. Ramachandra vs Sri S.R. Venkatesh

V. Jagannathan

This Criminal Revision Petition is by the accused, who has been convicted by the trial court in respect of an offence u/s 138 of the Negotiable Instruments Act and sentenced to pay Rs. 2,65,000/- as fine out of which Rs. 2,62,000/- was to be paid as compensation to the complainant. The said judgment was confirmed by the lower appellate court by dismissing the petitioner''s appeal. The case of the respondent-complainant is that, the petitioner availed hand loan of Rs. 2,50,000/- from him by way of cash on 3.3.2003 and the rate of interest was 2% per month and towards the discharge of the loan, the accused issued three cheques out of which two cheques were for Rs. 1,00,000/- each and one cheque was for Rs. 50,000/-. The said cheques, on presentation to the bank, were returned with the endorsements "insufficient funds/payment stopped by the drawer". Legal notice issued by the complainant had no avail and, therefore, the complainant presented a complaint u/s 200 of the Cr.P.C. against the petitioner alleging the offence u/s 138 of the N.I. Act.

After appearance of the parties before the trial court, the evidence of the complainant was adduced as P.W. 1 along with 13 documents and the accused examined himself as D.W.1 and relied on Ex. D-1, a note book. The trial court, after appreciating the evidence on record, held that the accused had committed the offence u/s 138 of the N.I. Act and consequently, he was convicted and sentenced as aforesaid. The lower appellate court also agreed with the trial court and dismissed the appeal preferred by the accused.

Learned Counsel Shri V.B. Shiva Kumar for the petitioner contended that though the issuance of the cheques is not in dispute and so also the signatures of the accused on the said cheques, yet, the existence of legally recoverable debt was not established by the complainant before the trial court and, therefore, the conviction of the petitioner cannot be sustained in law. In this connection, it is argued that, even according to the complainant, the loan was given on behalf of a Hindu Undivided Family and Ex. D-1 shows that the payments made by the accused were endorsed by the complainant as well as his brother Prakash. The said Prakash is not examined by the trial court and, therefore, the question of the accused being legally liable to pay the amount to the complainant does not arise.

The Learned Counsel pointed out from the judgment of the trial court that no finding is given with regard to the existence of legal recoverable debt and, therefore, the judgments of the courts below are liable to be interfered with by this Court. Section 138 of the N.I. Act was also brought to the attention of the court to contend that the cheque, though is presumed to have been issued towards discharge, in whole or in part of any debt or other liability, yet the burden is there on the complainant to establish that there exists legally recoverable debt towards the satisfaction of which the cheques in question were issued. Therefore, the petition be allowed by setting aside the judgments of the courts below.

Learned Counsel Shri Pramod N. Kathavi for the respondent, on the other hand, argued that both the courts have considered the entire evidence on record in proper perspective and the very fact that the accused has produced Ex. D-1 and admits that the amounts mentioned in the said document were the interest paid towards the principal amount itself is sufficient to conclude the loan transaction between the complainant and the accused and secondly, both the courts have also recorded a finding that the accused is not a trustworthy person for two reasons. The first reason is that the accused claims to be a stranger to the complainant but admits in his evidence that his shop is adjacent to the shop of the complainant and both of them have been doing business there for over twenty years. The second factor is that the accused says in his evidence that he has given reply notice to the notice issued by the complainant, but the copy of the reply notice is not placed on record. Therefore, the courts below took the view that the accused is not telling the truth.

As far as the presumption is concerned, it is argued that Section 138 of the N.I. Act makes it clear that the cheque is presumed to have been issued towards the discharge of any debt or other liability and once the said presumption is deemed in favour of the complainant, the burden shifts on the accused to place rebuttal evidence to show that the cheque was not issued towards the discharge of any legally recoverable debt. In the instant case, the accused has not placed any iota of material to rebut the presumption in favour of the holder of the cheque. Therefore, the view taken by the courts below calls for no interference.

It is also argued that the admission of D.W. 1 that Ex. D-1 is the note book maintained by him and contains the endorsement of the complainant and one Prakash towards payment of interest at 2% per month itself is sufficient proof of the loan having been availed by the accused from the complainant. For all these reasons, the petition be rejected.

Having thus heard both sides, insofar as the position of law is concerned, as admitted by both sides, the Apex Court, in the case of Krishna Janardhan Bhat Vs. Dattatraya G.Hegde. reported in 2008 AIR SCW 738, has held that Section 139 of the N.I. Act merely raises a presumption in favour of the holder of the cheque that the cheque has been issued for discharge of any debt or other liability. As far as the existence of debt is concerned, the Apex Court held that, that is not a matter of presumption u/s 139 of the N.I. Act. Keeping the aforesaid principle in view, if the present case is examined, the following picture emerges.

Issuance of three cheques by the accused as per Exs. P-2 to P 4 and signatures on the said cheques being that of the accused are not in dispute. Ex. D-1 is the note book produced by the accused himself which, according to him, shows the entries in respect of payment of interest by the accused to the complainant and his brother Prakash. It is the case of the complainant that the accused took Rs. 2,50,000/- hand loan on payment of 2% interest per month. The accused has not replied to the legal notice issued to him as no such copy of the reply notice is placed on record. Both the courts have observed that the accused is not a believable person because, he says in one breath that he has given reply to the notice issued by the complainant but does not produce a copy of the reply notice. Secondly, the accused has taken a stand that the complainant is a total stranger to him, whereas the evidence on record reveals that the accused has his shop adjacent to the shop of the complainant and both of them have been doing business there for over twenty years and there have been transactions between the accused on one hand and the complainant and his brother on the other. Thus, the accused himself has projected an image of unreliable person and both the courts have taken note of this conduct of the accused.

As far as the cheques being issued and being dishonoured by the bank is concerned, the complainant has placed enough material on record and in view of the accused also not disputing either the contents of the cheques or his signatures, the presumption u/s 139 of the N.I. Act has to be drawn in favour of the holder of the cheques. No rebuttal evidence is placed by the accused to dislodge the said statutory presumption in favour of the complainant. Ex. D-1, which is a note book produced by the accused, itself is sufficient to reinforce the case of the complainant with regard to the loan transaction and the accused having been paid Rs. 2,50,000/- as loan. As the findings of the courts below do not suffer from the defect of perversity, in my view, the revision petition, therefore, lacks merit and is accordingly dismissed.