Telangana High Court

Suddal Narasimha Chary vs Vattikooti Srinivas Murthy State ... on 9 November, 2021

Bench: G.Radha Rani

         THE HON'BLE Dr. JUSTICE G. RADHA RANI

          CRIMINAL REVISION CASE No.2155 of 2005


ORDER:

This Criminal Revision Case is filed by the respondent No.1 -

de facto complainant against the Judgment in Criminal Appeal No.

184 of 2003 on the file of II Additional District & Sessions Judge

(FTC), Medak at Sangareddy dated 02-05-2005.

2. The facts of the case in brief are that the accused borrowed

an amount of Rs.2,60,000/- from the 1st respondent - de facto

complainant on 04-04-1999 and executed two promissory notes with a

promise to return the amount within six months, but failed to return

the same. When the complainant approached the accused, he gave

two cheques for Rs.1,10,000/- and Rs.1,50,000/- dated 29-04-2000

and 12-05-2000, respectively, and the complainant returned the

promissory notes to the accused. After presentation of the cheques in

the bank, both the cheques were returned by the bank on the ground of

"insufficient funds". The complainant issued a legal notice. The

accused refused the same. Thereafter, the complainant filed the

complaint under Section 138 of the Negotiable Instruments Act (for

short 'the Act').

3. The defence of the accused was that he did not know the

complainant - SN Chary. He issued two blank cheques to one PSN

Chary, co-brother of the complainant for security purpose in

connection with the loan amount advanced by him and the Dr.GRR,J

complainant made use of the said cheques by filling the contents and

filed the present case. He denied receiving any notice.

4. The de facto complainant examined himself as PW.1 and

examined one of the bank employee as PW.2. Exs.P1 to P7 were

marked by the de facto complainant. The accused was examined as

DW.1. No documents were marked by the accused.

5. After considering the evidence on record, the Addl. Judicial

Magistrate of First Class, Sangareddy, convicted the accused for the

offence under Section 138 of NI Act, sentencing him to undergo

simple imprisonment for a period of 6 months and to pay a fine of

Rs. 5,000/- in default to undergo simple imprisonment for 4 months.

6. Aggrieved by the said conviction and sentence, the accused

preferred an appeal which was decided by the II Additional District &

Sessions Judge (FTC), Medak at Sangareddy and after re-appreciating

the evidence on record, the learned Sessions Judge allowed the appeal

by setting aside the judgment of conviction imposed by the trial Court

and directed the fine amount to be refunded to the appellant - accused.

7. Aggrieved by the said reversal of the judgment, the

complainant preferred this revision contending that the appellate

Court should have seen that the respondent No.1/accused admitted his

signature on the cheque, the presumption would lie in favour of the

complainant that the cheque was issued in discharge of a legally

enforceable debt, the appellate Court should have seen that the

complainant returned the promissory notes to the respondent No.1

when the cheques were issued, hence the question of filing the Dr.GRR,J

promissory notes would not arise. As the accused refused to receive

the notice, it would amount to service of notice and the case was filed

within the time. The petitioner was a practicing advocate and his name

was SN Chary and the letter 'P' was added before his name. It could

be presumed that the petitioner was the same person to whom the

accused issued two cheques. To avoid the payment, the accused was

saying that he issued two cheques to one PSN Chary, but had not

produced any proof to that effect and prayed to set aside the order

under revision.

8. Heard the learned counsel for the revision petitioner. There

is no representation by learned counsel for the respondent/accused.

9. Perused the record. As per the facts of the case, the accused

admitted his signature on the cheque, but denied that it was issued to

the complainant in discharge of any legally enforceable debt. Though

he contended that he had issued two signed blank cheques to one PSN

Chary and the complainant SN Chary was not the said person, but was

co-brother of PSN Chary, failed to prove that there was any other

person by name PSN Chary and as to how the said cheques came into

possession of the complainant-SN Chary. Though he stated that PSN

Chary was the co-brother of the complainant, the complainant in his

evidence stated the names of his co-brothers as 'Subrahmanyam' and

'Damodar'. When the accused admitted his signature on the cheque,

presumption would lie in favour of the complainant under Section 118

of the NI Act that unless the contrary is proved, it is to be presumed

that the negotiable instruments (including the cheque) had been made Dr.GRR,J

or drawn for consideration. As per Section 139 of the NI Act, the

Court has to presume unless contrary is proved that the holder of the

cheque received the cheque for discharge, in whole or in part, of a

debt or liability. In complaints under Section 138 of NI Act, the Court

has to presume that the cheque has been issued for a debt or liability

but the said presumption is rebuttable. The burden of proving that the

cheque has not been issued for a debt or the liability, is on the

accused. The Hon'ble Apex Court in the case of Rangappa v. Sri

Mohan1 observed that:

"The presumption under Section 139 of the NI Act is in the nature of rebuttal 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."

In paragraph - 27, it was held that:

"Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof.

10. The accused can discharge the burden laid upon him by

preponderance of probability. But, mere denial regarding existence of

debt would not serve any purpose.

2010 (11) SCC 441 Dr.GRR,J

11. The story put-forward by the accused that the cheques were

issued to one PSN Chary for security purpose and the complainant

was not the said person, could not be believed as he failed to produce

any evidence to show as to who was PSN Chary and that the said

cheques were not issued in discharge of any subsisting debt or

liability.

12. As the notice sent to the accused was returned as 'refused'

the contention of the accused that he did not receive the notice also