SC: Dishonour of cheque


Court :
Supreme Court of India

Brief :
The Supreme Court bench comprising of Justices J. Chelameswar and Pinaki Chandra Ghose held that the printed date on the cheque, in absence of any other evidence, cannot be conclusive of the fact that the cheque was issued on that particular date.

Citation :
T. Vasanthakumar vs. Vijayakumari

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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

REPORTABLE

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respondent herein. 

2

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. 

New Delhi;

April 28, 2015. 

……………………………………………………J

(J. CHELAMESWAR)

……………………………………………………J

   (PINAKI CHANDRA GHOSE)

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