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REPORTABLE

IN THE SUPREME COURT OF INDIA

        CRIMINAL APPELLATE JURISDICTION

      CRIMINAL APPEAL NO. 1026  OF 2013      [@ SPECIAL LEAVE PETITION(Crl) No(s)4628 OF 2009

  C.KESHAVAMURTHY                                   Appellant(s)

                VERSUS

H.K.ABDUL ZABBAR                                  Respondent(s)          

J U D G M E N T

H.L. GOKHALE,J.

1 Heard  Mr.  R.S.  Hegde,  learned  counsel  in  

support  of  this  petition  and  Mr.  G.V.  

Chandrashekhar, learned counsel appearing for the  

respondent.

2 Leave granted.

3 Both  the  counsel  have  made  their  

submissions.

4 The  facts  giving  rise  to  this  criminal  

appeal are as follows _

The respondent had issued four cheques to  

the appellant, which had bounced.   Out of the five  

cheques,  a cheque   dated  31st July, 2003, was  

issued   for   an   amount   of  ` 1,36,000/-, and

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three other cheques dated  10th August, 2003, 15th  

August,  2003  and  18th August,  2003,  respectively  

were for a sum of  ` One lakh each.   Since those  

cheques  got  bounced,  the  appellant  filed  a  

Complaint bearing No.2857 of 2003, in the Court of  

Judicial Magistrate, First Class-II, Davangere, in  

the State of Karnataka, under Section 138 of the  

Negotiable Instruments Act, 1881. The case of the  

appellant  is  that  since  these  cheques  were  

dishonoured, an appropriate order under the law was  

necessary.

5 The  defence  of  the  respondent  was  that  

there was an agreement of sale between the parties,  

and that the Complainant was a businessman dealing  

in lands, and it was in that transaction that the  

respondent  had  issued  some  cheques  earlier,  but  

since transaction did not fructify, he had issued a  

notice dated 28th July, 2003, not to clear those  

cheques.    However,  this  defence  could  not  be  

accepted  for  the  simple  reason  that  all  the  

cheques, which had bounced were issued subsequent  

to  the  said  Notice  dated  28th July,  2003.  

Therefore, no more justification was required for  

allowing the Complaint.   The defence raised by the  

respondent could not be accepted and, therefore,  

the Learned Magistrate considered the factual, as

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well as legal position and allowed the Complaint  

filed by the appellant herein.

6 The  respondent  being  aggrieved  therefrom  

filed  a  Criminal  Appeal  bearing  No.51  of  2005,  

before the Additional Sessions Judge, Fast Track  

Court-II, Davangere.    The learned Judge framed  

necessary points for consideration, namely, whether  

the  impugned  judgment  of  conviction  recorded  by  

JMFC-II, Davangere, could not be sustained under  

law  and  whether  the  punishment  was  in  any  way  

disproportionate.   The learned Judge decided both  

those points in the negative, but passed an order  

whereby  he  partly  allowed  the  appeal.    The  

conviction recorded by the learned JMFC-II Court,  

Davangere,  was  confirmed,  but  the  sentence  was  

modified by him  as follows:

“The  Accused/Appellant  for  the  offence  punishable  under  Section  138  of  the  Negotiable  Instrument  Act  shall  undergo  simple  imprisonment three months and pay  fine of Rs.5,000/-.  In default to  pay  such  fine  he  shall  undergo  simple imprisonment for a further  period of three months. The Accused/Appellant shall pay to  the  Complainant/Respondent  a  sum  of  Rs.4,50,000/-(Four  lakhs  Fifty  thousand)  as  compensation  to  the  Complainant/Respondent.    In  default  to  pay  such  compensation  he  shall  undergo  simple  imprisonment for a further period  of six months.   It  was  further  directed  that  the  Accused/Appellant  shall  pay  the

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fine  amount  and  also  the  compensation  amount  within  45  (forty five) days from this date  and surrender before the J.M.F.C.- II  Court,  Davangere,  to  undergo  the sentence.   In case of failure  to do so, the Learned Magistrate  shall  take  steps  to  enforce  the  sentence.”

7 This  judgment  and  order  rendered  by  the  

Addl. Sessions Judge on 4th May, 2006, was carried  

by  the  respondent  further  in  Criminal  Revision  

Petition No.1295 of 2006.   This time, however, the  

respondent was successful, and the plea raised by  

the respondent based on the Notice dated 28th July,  

2003, was accepted by the learned Single Judge of  

the  Karnataka  High  Court.    The  learned  Single  

Judge referred to the judgment of a Bench of two  

Judges of this Court in Krishna Janardhan Bhat Vs.  

Dattatraya  G.Hegde,  reported  in  [2008(4)SCC  54],  

and  stated  that  the  burden  is  always  on  the  

Complainant  to  establish  not  only  issuance  of  

cheque, but existence of debt or legal liability.  

In the facts of this case, the learned Judge took  

the  view  that  the  respondent  had  raised  an  

acceptable defence.   He therefore,  allowed the  

Revision and set aside the judgment rendered by the  

courts below.  The  accused  respondent  was  

acquitted of the offence under Section 138 of the  

Negotiable Instruments Act, 1888, and the amount

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deposited in court  was directed to be refunded.

8 Being aggrieved by the judgment of the High  

Court dated 8th December, 2008, the present criminal  

appeal has been filed.   Mr. R.S. Hegde, learned  

counsel  for  the  appellant,  submitted  that  the  

approach of the learned  Judge was erroneous on  

facts, as well as on law.   As noted above, though,  

the respondent had given some cheques earlier, and  

had issued a Notice dated 28th July, 2003 not to  

encash those cheques, the  respondent had issued  

the disputed cheques thereafter.   Therefore, the  

defence taken by the respondent that he had issued  

a Notice not to clear those cheques was not tenable  

on facts, and there was no defence as to why those  

cheques  should  not  have  been  put  into  Bank  and  

cleared.    

9 Secondly,  as  far  as  the  proposition  

canvased on the basis of the judgment in  Krishna  

Janardhan  Bhat (supra)  is  concerned,  it  must  be  

noted that the same has been specifically held to  

be  not  a  correct  one  in  paragraph  26  of  the  

judgment  rendered  by  a  three-Judge  Bench  in  

Rangappa vs.  Sri Mohan, reported in [2010(11)SCC  

441].    The  judgment  clearly  held  that  the  

presumption  under  Section  139  of  the  Negotiable  

Instruments Act, 1881, includes the presumption of

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the  existence  at  a  legally  enforceable  debt  or  

liability.   That presumption is required to be  

honoured, and if it is not so done, the entire  

basis  of  making  these  provisions  will  be  lost.  

Therefore,  it has been held that it is for the  

accused to explain his case and defend it once the  

fact of cheque bouncing is prima facie established.  

The burden is on him to disprove the allegations  

once  a  prima  facie  case  is  made  out  by  the  

Complainant.

10 Mr.   G.V.  Chandrashekar,  learned  counsel  

for the respondent, on the other hand, submitted  

that  in  the  facts  of  this  case,  there  was  an  

agreement between the parties.  He contended that  

although  it  is  true  that  the  agreement  was  not  

produced, but the fact of it was not disputed by  

the appellant himself.   That being so, since the  

agreement  was  not  being  acted  upon,  the  cheques  

were not expected to be cleared.   He, therefore,  

submitted  that  the  order  of  the  High  Court  was  

justified on the facts of the particular case.

11 We have noted the submissions of both the  

counsel.   As noted earlier, it has clearly come on  

record that disputed cheques were given subsequent  

to the Notice not to clear the earlier cheques.  

There was no explanation as to why the subsequent

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cheques  could  not  have  been  cleared.    The  

agreement on the basis of which the submission was  

made was not produced in the courts below.   That  

being so, on facts there was no error on the part  

of the learned Magistrate, as well as the learned  

Addl. Sessions Judge, in the view that they have  

taken.   As far as the legal position is concerned,  

in our view, that has been settled adequately in  

Rangappa's case(supra),  which  has   specifically  

explained  the  observations  in  Krishna  Janardhan  

Bhat (supra).

12 This  being  the  position,  we  allow  this  

appeal, set aside the order passed by the learned  

Judge of Karnataka High Court and restore the order  

passed by the Additional Sessions Judge.  The  

parties will bear their own costs.

.....................J (H.L. GOKHALE)

  .....................J

            (J.CHELAMESWAR)         NEW DELHI;       July 23, 2013.