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Once the cheque was issued , it is valid and it is for consideration unless it is rebutted properly by the accused, no evidence on the part of the accused adduced, confusing other cases statements of same accused by the relatives of the complainant is a gross misunderstanding of the facts as each case is independent , should not jumbled and read together to come to a conclusion, their lordships awarded punishment.


Hight court of the state of Andhra pradesh loc...

Hight court of the state of Andhra pradesh located at hyderabad. self-photographed. (Photo credit: Wikipedia)

Criminal Appeal No.234 of 2007


N. Narsingarao

Srinivasa Chary and another

Counsel for the Petitioner : Sri Eranki Phani Kumar

Counsel for the 1st Respondent: G. Venu Gopal Reddy
Counsel for the 2nd respondent: Public Prosecutor


1. Unsuccessful complainant in the case relating to offence punishable under
Section 138 of the Negotiable Instruments Act (in short, the Act) is the
appellant herein. He filed C.C.No.289 of 2003 on the file of Special Judicial
Magistrate of the First Class for Excise Cases, Mahaboobnagar against the
accused alleging offence under Section 138 of the Act on the ground that the
accused borrowed hand loan of Rs.70,000/- on 03.05.2000 and that subsequently
the accused gave Ex.P-1 cheque dated 04.09.2002 for Rs.1,09,200/- to the
complainant towards settlement of the said debt and that the said cheque when
presented for encashment, was dishonoured as per Ex. P-2 dishonour memo. After
issuing Ex.P-3 statutory notice, the complainant filed the case in the lower
court. During trial in the lower court, the complainant examined himself as
P.W.1 and marked as Exs.P-1 to P-7 on his behalf. No evidence was let in by the
accused. The lower court after considering contentions of both the parties,
found the accused not guilty of the offence under Section 138 of the Act and
acquitted the accused.

2. There is no dispute about Ex.P-1 cheque containing signature of the
accused. The banker also did not dispute signature of the accused contained in
Ex.P-1. It is contention of the accused that the accused and the complainant’s
brother Mohanlal did joint business in real-estate ventures and that in that
connection, the accused handed over a blank cheque book with his signatures to
accommodate the said Mohanlal for running the business. The accused did not let
in any evidence in support of his contention. The accused did not even examine
himself as a witness in this case. He did not file any documents to prove the
alleged joint real estate ventures of himself with Mohanlal. It is contended by
the 1st respondent’s counsel that even though the accused did not lead any
evidence, the complainant could not prove the alleged lending of Rs.70,000/- to
the accused. When there is statutory presumption under Section 139 of the Act
to the effect that there is legally enforceable debt for the cheque, it is for
the accused to lead evidence and to rebut the presumption contained under
Section 139 of the Act.

In Hiten P. Dalal v. Bratindranath Banerjee1, the Supreme Court observed that
Sections 138 and 139 of the Act introduced exceptions to the general rule as to
the burden of proof in criminal cases and shifted the onus on the accused, in
the following manner:
“Because both Sections 138 and 139 require that the Court “shall presume” the
liability of the drawer of the cheques for the amounts for which the cheques are
drawn, as noted in State of Madras v. A. Vaidyanatha Iyer, AIR 1958 SC 61, it is
obligatory on the Court to raise this presumption in every case where the
factual basis for the raising of the presumption had been established. “it
introduced an exception to the general rule as to the burden of proof in
criminal cases and shifts the onus on to the accused” (ibid ). Such a
presumption is a presumption of law, as distinguished from a presumption of fact
which describes provisions by which the Court “may presume” a certain state of
affairs. Presumptions are rules of evidence and do not conflict with the
presumption of innocence, because by the latter all that is meant is that the
prosecution is obliged to prove the case against the accused beyond reasonable
doubt. The obligation on the prosecution may be discharged with the help of
presumptions of law or fact unless the accused adduces evidence showing the
reasonable possibility of the non-existence of the presumed fact.”

In K.N. Beena v. Muniyappan2, the Supreme Court observed that it would be
erroneous approach in case the burden is cast on the prosecution/complainant to
prove that the cheque was issued for a debt or liability. The Supreme Court
further observed that the accused had to prove in the trial by leading cogent
evidence that there was no debt or liability and that the accused not having led
any evidence could not be said to have discharged the burden cast on him.
In Rangappa v. Mohan3 also the Supreme Court held that existence of
legally recoverable debt or liability is a matter of presumption under Section
139 of the Act.

3. If the present case is scrutinised in the light of above decisions
rendered by the Supreme Court, this Court has no hesitation to conclude that
the accused/1st respondent made no attempt at all in leading evidence in order
to rebut the presumption contained under Section 138 of the Act. The 1st
respondent’s counsel pointed out certain discrepancies in cross-examination of
the complainant as P.W.1 with regard to date of lending money and with regard to
date of obtaining money through chit for lending the same to the accused.
When the complainant was being examined after four years of the lending, such
discrepancies in dates do occur. The said errors in giving dates cannot be
taken as a circumstance to rebut the presumption under Section139 of the Act.
Therefore, this Court finds that Ex.P-1 cheque is supported by legally
enforceable debt owed by the accused to the complainant.

4. It is contended by the 1st respondent’s counsel that there is no
compliance of statutory requirement by way of issuing notice to the accused
after dishonour of cheque and calling upon the accused to pay amount covered by
the cheque. The complainant as P.W.1 filed Ex.P-3 legal notice dated 16.09.2002
got issued by him to the accused. The notice was sent not only by registered
post but also by courier service and also under certificate of posting which are
evident from Exs.P-4 to P-6. Registered notice addressed to the accused was
returned as per Ex.P-7 stating that the addressee left and new address is not
known. I am of the opinion that there is valid compliance of the statutory
requirement of issuing notice to the accused.

5. Since the cheque was drawn on State Bank of Hyderabad (ADB),
Mahaboobnagar, it cannot be said that the Magistrate court at Mahaboobnagar has
no jurisdiction to entertain the case.

6. On a reading of judgment of the lower court, it is evident that the
Magistrate bungled and became confused because of simultaneous dealing of four
cases filed by the accused and his family members simultaneously. The lower
court should not have brought the material relating to other cases into the
present case and should have confined to assessment of evidence let in in the
present case.

7. Thus, on reading and evaluation of the entire evidence on record, this
Court finds that judgment of acquittal passed by the lower court is erroneous,
perverse and is not sustainable both on facts and in law.

8. In the result, the criminal appeal is allowed setting aside acquittal
recorded by the lower court and finding the accused/1st respondent guilty of
offence under Section 138 of the Act. Accordingly, the accused/1st respondent
is convicted for the offence under Section 138 of the Act and is sentenced to
Simple Imprisonment for 6 months and pay fine of Rs.5,000/-(Rupees five
thousand only) apart from payment of compensation amount of Rs.70,000/- (Rupees
seventy thousand only) to the complainant/appellant. The lower court is
directed to issue conviction warrant accordingly.

?1 AIR 2001 Supreme Court 3897
2 2001(2) ALD (Crl.) 824 (SC)
3 AIR 2010 Supreme Court 1898


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