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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

J U D G M E N T Pinaki Chandra Ghose, J.

1. Leave granted.

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

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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

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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

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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

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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

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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

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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

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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

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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,

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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

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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.