Saturday, 28 November 2015

What is relevance of printed pro forma date on cheque leaf in dishonour of cheque case?

 The High Court in appeal reversed the concurrent
finding of the learned Magistrate and learned Sessions
Judge. The High Court found that the cheque was
actually from the cheque book that was issued prior to
2000 as the cheque leaf itself mentioned the date in
printed ink as “__/__/199__”. The High Court observed
that it is hard to believe that a business transacting
party would give a cheque which is of the decade 1990
in relation to the transaction in 2007. The High Court
accepted the argument of the defendant that the
Complainant used the old cheque due to ill will because
of denial of the defendant firm to release the film
“Pokari” in his theatre. 
In the present case since the cheque as
well as the signature has been accepted by the accused
respondent, the presumption under Section 139 would
operate. Thus, the burden was on the accused to
disprove the cheque or the existence of any legally
recoverable debt or liability. To this effect, the
accused has come up with a story that the cheque was
given to the complainant long back in 1999 as a
security to a loan; the loan was repaid but the
complainant did not return the security cheque.
According to the accused, it was that very cheque used
by the complainant to implicate the accused. However,
it may be noted that the cheque was dishonoured because
the payment was stopped and not for any other reason.
This implies that the accused had knowledge of the
cheque being presented to the bank, or else how would
the accused have instructed her banker to stop the
payment. Thus, the story brought out by the accused is
unworthy of credit, apart from being unsupported by any
evidence.
 Further, the High Court relied heavily on the
printed date on the cheque. However, we are of the view
that by itself, in absence of any other evidence,
cannot be conclusive of the fact that the cheque was
issued in 1999. The date of the cheque was as such
20/05/2006. The accused in her evidence brought out
nothing to prove the debt of 1999 nor disprove the loan
taken in 2006.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTON
CRIMINAL APPEAL NO.728 OF 2015
(Arising out of SLP (Crl.) No. 8091 of 2011)
T. VASANTHAKUMAR ...APPELLANT
:Versus:
VIJAYAKUMARI ...RESPONDENT
Citation;(2015) 8 SCC378

2. This appeal, by special leave, arises from the
judgment and order dated 22-07-2011 passed by the High
Court of Karnataka in Criminal Revision Petition
No.263/2011 by which the High Court set aside the
judgments of the two Courts below and acquitted the
respondent herein.
3. The genesis of the litigation in the present case
is that a complaint under Section 138 of the Negotiable
Instruments Act, 1881 was filed by the complainant
before the XII Magistrate, Bangalore. The learned
Magistrate had, after trial, found the defendant guilty
and sentenced her to pay Rs.5,55,000/- and in default
of payment of the said amount, to undergo simple
imprisonment for a period of five months. This order of
the learned Magistrate was challenged in the appeal
before the Fast Track Court, Bangalore, but the same
was dismissed by the Fast Track Court. The defendant
preferred a revision of the Fast Track Court's order
before the High Court, being Criminal Revision Petition
No.263/2011.
4. The case of the complainant is that he is the
owner of the Ullas Theatre situated at Yashwantpur,
Bangalore, while the defendant is the distributor of
films. The two parties had a business relationship
whereunder the defendant provided movies to the
complainant for screening at his Theatre. In May 2006,
the defendant sought a loan of Rupees Five Lakhs from
the complainant for supporting the making of a Tamil
movie “Pokari”. The said loan was advanced by the
complainant on 20-05-2006. The defendant had promised
to repay the loan on release of the said movie.
However, the defendant failed to repay the said loan.
On repeated requests made by the complainant, the
defendant on 16-01-2007, gave a cheque for Rs.5 lakhs,
bearing No.822408, drawn on State Bank of Mysore,
Vyalikaval Branch, Bangalore. This cheque was presented
by the complainant on the same day through his banker
Vijaya Bank, Yeshwantpur Branch, Bangalore. But the
cheque was returned on 18-01-2007 by the Bank with the
remarks: “Stop Payment”. Thereafter, the complainant
issued a legal notice to the defendant on 27-01-2007,
at the office address as well as residential address of
the defendant. The notice sent at the residential
address through RPAD was duly received, while the one
sent at the office address of the defendant was
returned with the report: “Absent - Information
delivered”. Even after the notice was served, the
defendant neither made the payment nor responded to the
same.
5. The defendant's case is that she is only the name
lender to the business of films distribution run in the
name of Vijayakumari Films which is actually controlled
and managed by her husband Kuppuswamy. She has disputed
taking any loan from the complainant as claimed by him.
According to her, she never visited the place of
complainant and never borrowed any money. The defendant
has claimed that Vijayakumari Films had differences
with the complainant in the year 2006, over release of
the film “Pokari”. The defendant's husband had denied
to release the film in the complainant's theatre on the
ground that at the time of the release of the said
movie, another Kannada movie was being shown there and
it could have been a sensitive matter. The defendant's
case is that the alleged cheque was given to the
complainant in the year 1999 as security against loan
of Rs.5 lakhs taken then. After the defendant paid the
loan, the complainant did not return the said cheque
saying that he had misplaced it. The defendant alleges
that the complainant, due to ill will in release of the
movie “Pokari”, used this old cheque to take revenge
against the defendant firm.
6. The Trial Court found the defendant guilty under
Section 138 of Negotiable Instruments Act and sentenced
her to pay a fine of Rs.5,55,000/-, in default of
payment, she was to undergo simple imprisonment for
five months. The first appellate Court found that
although the defendant disputed the transaction, they
did not dispute the cheque or her signature on it. The
learned Sessions Judge (Fast Track Court) found that
there was no evidence forthcoming to show that the
cheque was issued in 1999. It noted that there was no
suggestion put to the defendant with respect to the
loan taken in 1999 or cheque given to him as security
in 1999. Further the Court relied on the presumption in
favour of the complainant under Section 139 and held
that the defendant had failed to rebut that
presumption. The Court also rejected the claim of the
defendant that she and her husband were not in
Bangalore on the alleged date when the loan was
advanced i.e. 20-05-2006. The defendant had produced
hotel bills of Chennai for those dates, but the Court
held that the bills do not prove the presence of the
Defendant along with her husband in Chennai. On these
grounds the Court did not find weight in the case of
the defendant.
7. The High Court in appeal reversed the concurrent
finding of the learned Magistrate and learned Sessions
Judge. The High Court found that the cheque was
actually from the cheque book that was issued prior to
2000 as the cheque leaf itself mentioned the date in
printed ink as “__/__/199__”. The High Court observed
that it is hard to believe that a business transacting
party would give a cheque which is of the decade 1990
in relation to the transaction in 2007. The High Court
accepted the argument of the defendant that the
Complainant used the old cheque due to ill will because
of denial of the defendant firm to release the film
“Pokari” in his theatre. Further, the High Court noted
that the complainant in his statement has deposed that
he had withdrawn the amount of Rs.5 lakhs, 2 days prior
to giving it to the defendant but he failed to bring on
record any receipt or other proof of such withdrawal of
money from bank. The High Court found the case of the
complainant lacking to prove the offence under Section
138 of the Negotiable Instruments Act.
8. We have heard the learned counsel appearing for
the appellant as also the learned counsel appearing for
the respondent. The complainant has alleged that the
money (loan) was advanced to the defendant on
20-05-2006 in relation to which the cheque was issued
to him by the defendant on 16-01-2007. The cheque was
for Rs.5 lakhs only, bearing No.822408. It is of great
significance that the cheque has not been disputed nor
the signature of the defendant on it. There has been
some controversy before us with respect to Section 139
of Negotiable Instruments Act as to whether complainant
has to prove existence of a legally enforceable debt
before the presumption under Section 139 of the
Negotiable Instruments Act starts operating and burden
shifts to the accused. Section 139 reads as follows:
“139. Presumption in favour of the holder- It
shall be presumed, unless the contrary is
proved, that the holder of a cheque received
the cheque of the nature referred to in Section
138 for the discharge, in whole or in part, of
any debt or other liability.”
9. This Court has held in its three judge bench
judgment in Rangappa v. Sri Mohan (2010) 11 SCC 441:
“The presumption mandated by Section 139 includes
a presumption that there exists a legally
enforceable debt or liability. This is of course
in the nature of a rebuttable presumption and it
is open to the accused to raise a defence wherein
the existence of a legally enforceable debt or
liability can be contested. However, there can be
no doubt that there is an initial presumption
which favours the respondent complainant.”
10. Therefore, in the present case since the cheque as
well as the signature has been accepted by the accused
respondent, the presumption under Section 139 would
operate. Thus, the burden was on the accused to
disprove the cheque or the existence of any legally
recoverable debt or liability. To this effect, the
accused has come up with a story that the cheque was
given to the complainant long back in 1999 as a
security to a loan; the loan was repaid but the
complainant did not return the security cheque.
According to the accused, it was that very cheque used
by the complainant to implicate the accused. However,
it may be noted that the cheque was dishonoured because
the payment was stopped and not for any other reason.
This implies that the accused had knowledge of the
cheque being presented to the bank, or else how would
the accused have instructed her banker to stop the
payment. Thus, the story brought out by the accused is
unworthy of credit, apart from being unsupported by any
evidence.
11. Further, the High Court relied heavily on the
printed date on the cheque. However, we are of the view
that by itself, in absence of any other evidence,
cannot be conclusive of the fact that the cheque was
issued in 1999. The date of the cheque was as such
20/05/2006. The accused in her evidence brought out
nothing to prove the debt of 1999 nor disprove the loan
taken in 2006.
12. In light of the above reasoning, we find that the
learned High Court was misplaced in putting the burden
of proof on the complainant. As per Section 139, the
burden of proof had shifted on the accused which the
accused failed to discharge. Thus, we find merit in
this appeal.
13. The appeal is allowed. The judgment and order
passed by the High Court is accordingly set aside and
the judgment dated 22.01.2011, delivered by the
Presiding Officer, Fast Track Court-I, Bengaluru,
confirming the order passed by the XIIth Addl. Chief
Metropolitan Magistrate, Bengaluru, convicting the
respondent for an offence under Section 138 of the
Negotiable Instruments Act and sentencing her to pay a
fine of Rs.5,55,000/-, in default to suffer Simple
Imprisonment for five months, is hereby restored.
……………………………………………………J
(J. CHELAMESWAR)
……………………………………………………J
 (PINAKI CHANDRA GHOSE)
New Delhi;
April 28, 2015. 
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