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IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 1699  OF 2008

[Arising out of SLP(Crl.) No. 6189/2006]

P. VENUGOPAL ... APPELLANT(S)

:VERSUS:

MADAN P. SARATHI ... RESPONDENT(S)

O R D E R

Leave granted.

Appellant is before us aggrieved by and dissatisfied with the judgment and

order  dated  21.8.2006  passed  by  the  learned  Single  Judge  of  the  High  Court  of

Karnataka  at  Bangalore  in  Criminal  Revision  No.1020/2006,  whereby  and

whereunder the revision application filed by him from the judgment dated 14.10.2006

passed by the VIth Fast Track Court at Bangalore in Criminal Appeal No. 4050/2005

affirming the judgment and order dated 22.10.2005 passed by the XVIth Additional

Chief Metropolitan Magistrate, Bangalore in CC NO. 3400/2002, was dismissed.

Respondent allegedly gave a hand loan of Rs. 1,20,000/- to the appellant on

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4.10.2000.  In  discharge  of  the  said  debt  the  appellant  is  said  to  have  issued  two

cheques  for  Rs.  60,000/-  each  on  26.4.2001  and  5.4.2001.  The  said  cheques  were

presented before the bank on July 10, 2001 and were returned dishonoured on the

ground that sufficient fund therefor was not available.   

Upon service of notice upon the respondent, a criminal complaint was filed.

By an order dated 20th November, 2002, cognizance of the offence under Section 138 of

the Negotiable Instruments Act, 1881, was taken by the learned Magistrate.  

Before the learned Trial Judge, the parties examined themselves.  One of the

contentions raised by the appellant was that there did not exist any relationship of

creditor and debtor between the parties.   It was furthermore urged that  notice in

terms of the proviso appended to Section 138 of the Negotiable Instruments Act was

not served upon the appellant.  

Learned Additional Metropolitan Magistrate upon considering the materials

brought  on record by  the  parties,  including  the  report  of  a  hand  writing  expert,

opined that the signatures appearing on Exhibit P-11 (Postal Acknowledgment) was

not  that  of  the  appellant.   The  signatures  of  the  appellant  on  the  said  Postal

Acknowledgment  was  compared  with  his  signatures  on  the  cheque.  Respondent,

however, examined the postal peon - BA Subramanium as PW-2.

He stated that he knew the appellant very well.

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The learned Metropolitan Magistrate did not place any reliance upon the

said report of the hand writing expert and held that the notice was in fact served upon

the appellant.  It was also not disputed that the address of the appellant stated by the

complainant was the correct address.  

So far as the contention raised by the learned counsel that the appellant had

failed  to prove the  relationship  of  creditor  and debtor is  concerned,  yet  again  on

appreciation of the evidence brought on record, the learned Trial Judge opined that

the said relationship had been established.    

Another contention which was raised by the appellant  before the learned

Trial Jude was that the cheque had in fact been issued to one Satya Murthy who was a

property dealer, in respect whereof the learned Trial Judge held:

“In the present case, the accused, to prove the arguments, has not

produced  any documentary evidence  supports  before  the  Court.

On the contrary, the Accused has admitted his  Signature on the

document Ex.P.12 produced by the Complainant. It is marked as

Ex.P12-A. In the Ex.P12, there is writing to the effect of  having

given the disputed cheques to the Complainant. As stated in this,

these cheques are produced on 2.7.01. Therefore, in the absence of

arguments of this Accused, having not produced in support, cannot

be accepted. In case,  if  this Accused had really having given the

Cheques  to  Sathyamurthy,  if  he,  having  mingled  with  this

Complainant,  had filed this Complaint,  the Accused should have

taken legal action against this Sathysmurthy and the Complainant,

for  having  mis-used  the  alleged  Cheques,  but,  there  are  no

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evidences  before  the  Court,  for  having  taken  such  any  legal

proceedings.  Therefore,  the  defence  evidence,  raised  by  this

Accused,  having  been  rejected,  the  evidence  produced  by  the

Complainant, and the Rulings reported hereinabove, coupled with

the  and  keeping  in  mind  the  rulings  reported  by  the  Learned

Counsel for the Complainant, in AIR 2005 Karnataka Page 4486;

ILR 1998 Page 1825; ILR 2001 Karnataka Page 4027; by coming to

the  conclusion  that,  the  Accused  has  committed  the  offence

punishable under Section 138 of N.I. Act, I answer the Point No.

One in the 'Affirmative'. “  

On  the  aforementioned  finding  that  the  respondent  had  proved  its  case

against the appellant beyond any shadow of doubt, a sentence of three months' simple

imprisonment as also a fine of Rs. 1,55,000/- was imposed upon the appellant.  Out of

the  said  amount  of  fine,  Rs.  1,50,000/-  was,  however,  directed  to  be  paid  to  the

complainant and the remaining amount of Rs. 5,000/-  was directed to be credited to the

Government.

An appeal was preferred thereagainst wherein the appellant inter alia raised

a contention that he had filed an application for adduction of additional evidence to

prove  that  he,  in  fact,  had  filed  a  complaint  petition  against  the  respondent  –

complainant for misuse of cheque. Opining that no sufficient reason has been assigned

for allowing the said application for adduction of additional evidence, it was held that

the burden was on the appellant - accused to rebut the case of the complainant.  It was

held that no material has been brought on record by the appellant to show that the

cheques  had been issued in favour of Satyamurthy,  particularly,  when he had not

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been examined.

Before  the  Appellate  Court,  a  further  contention  was  raised  that  the

complainant had not been residing at the address given by him, in support whereof a

purported report of a police constable was produced.   

The learned Appellate Court opined:

“All the said contentions are of no use as it is not his concern to see if

complainant  is  residing  at  the  said  address  or  not.  Even  if  it  is

presumed for a while that complainant has no residence, it does not

mean that he cannot transact with any other person. In the light of

the  same,  what  is  required  is  had  there  been  any  transaction

between complainant and the accused, had the accused in order to

discharge the legally  enforceable debt,  issued the cheque, had the

cheque issued was dishonoured when presented for realization and

had inspite of statutory notice being issued and served, the accused

did not discharge the legally enforceable debt.”  

On  the  aforementioned  finding,  the  appeal  was  dismissed.  The  revision

application  filed  by  the  appellant  was  also  dismissed  by  reason  of  the  impugned

judgment.  

Mr. Hegde, learned counsel appearing on behalf of the appellant reiterated

the aforementioned contentions raised by the appellant before the Courts below. In

support of the said contentions, the learned counsel strongly relied upon a decision of

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this Court in Krishna Janardhan Bhat vs. Dattatraya G. Hegde, [2008 (4) SCC 54].   

Section 138 of the Negotiable Instruments Act reads as under:

“Dishonour of  cheque for insufficiency,  etc.,  of  funds in

the account.- Where any cheque drawn by a person on an account maintained by him with a banker for payment of  any amount of

money to another person from out of that account for the discharge,

in whole or in part, of any debt or other liability, is returned by the

bank unpaid, either because of the amount of money standing to the

credit of that account is insufficient to honour the cheque or that it

exceeds the amount arranged to be paid from that account by an

agreement made with  that  bank,  such person shall  be deemed to

have committed an ofence and shall, without prejudice to any other

provision  of  this  Act,  be  punished with  imprisonment for a term

which may be extended to two years, or with fine which may extend

to twice the amount of the cheque, or with both:

Provided that nothing contained in this section shall apply

unless-

(a)  the  cheque  has  been presented  to  the  bank  within  a

period of six months from the date on which it is drawn or within

the period of its validity, whichever is earlier;

(b) the payee or the holder in due course of the cheque, as

the  case  may  be,  makes  a  demand  for  the  payment  of  the  said

amount of money by giving a notice in writing, to the drawer of the

cheque, within thirty days of the receipt of information by him from

the bank  regarding the return of the cheque as unpaid; and

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(c) the drawer of such cheque fails to make the payment of

the said amount of money to the payee or as the case may be, to the

holder in due course of the cheque within fifteen days of the receipt

of the said notice.”

The Act raised two presumptions; one contained in Section 118 of the Act

and other in Section 139 thereof.  Section 118(a) reads as under:

“118.  Presumption as to negotiable instruments.-  Until  the contrary is proved, the following presumptions shall be made:-

(a)  of consideration.-  that every negotiable instrument was  made  or  drawn  for  consideration,  and  that  every  such

instrument,  when  it  has  been  accepted,  indorsed,  negotiated  or

transferred, was accepted, indorsed, negotiated or transferred for

cosideration;

Provided  that,  where  the  instrument  has  been  obtained

from its lawful owner, or from any person in lawful custody thereof,

by means of an offence or fraud,  or has been obtained from the

maker or acceptor thereof by means of an offence or fraud, or for

unlawful consideration, the burden of proving that the holder is a

holder in due course lies upon him.”

Section 139 of the Act reads:

“139. Presumption in favour of 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.”

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Indisputably, in view of the decisions of this Court in Krishna Janardhan

Bhat (supra), the initial burden was on the complainant.  The presumption raised in

favour of  the  holder  of  the  cheque must  be kept  confined  to the matters  covered

thereby.  The presumption raised does not extend to the extent that the cheque was

issued for the discharge of any debt or liability which is required to be proved by the

complainant. In a case of this nature, however, it is essentially a question of fact.  

The  complainant  contended  that  he  gave  a  loan  of  Rs.  1,20,000/-  to  the

appellant.   He  denied  and  disputed  the  said  fact.   Both  parties  adduced  their

respective evidences.  

All  the three Courts  below have arrived at a concurrent  finding that  the

complainant has been able to prove his case of grant of a loan. Admittedly the burden

of  proof  shifted  to  the  appellant.  Again  a finding  of  fact  was  arrived  at  that  the

appellant had failed to discharge his burden.

In the aforementioned situation, we are of the opinion that the finding of fact

arrived at by the Courts below cannot be said to be such which warrants interference

by us.  

So far as the question of service of notice in terms of the proviso appended to

Section 138 of the Act is concerned, again the same is essentially a question of fact.  If

the evidence of PW-2 has been believed by the learned Trial Judge as also by the

Appellate Court and the revisional  Court, we in exercise of our jurisdiction under

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Article 136 of the Constitution of India should not interfere therewith.  

So far as the address of the complainant is concerned, it appears, he is a

resident  of  Marenahalli,  J.P.  Nagar,  Bangalore,  as  it  appears  from  the  affidavit

affirmed in support of the counter affidavit.  From a perusal of the memo of appeal

filed by the appellant himself before the Appellate Court, it would appear that therein

also the same address was given, namely,  Marenahalli, J.P. Nagar, Bangalore.

Appellant,  therefore,  was aware that the respondent had been residing at

Marenahalli, J.P. Nagar, Bangalore as also the fact that he had shifted from his earlier

residence, namely, No. 326, 41st Cross Road, 8th Block, Jayanagar, Bangalore.

For the reasons aforementioned, we are of the opinion that no case has been

made out for our interference with the impugned judgment.  The appeal is dismissed.  

As  the  amount  of  fine  has  already  been  deposited,  the  Trial  Court  shall

release the amount of Rs. 1,55,000/- in favour of the respondent, if it has not already

been withdrawn.  

...........................J (S.B. SINHA)

...........................J   (CYRIAC JOSEPH)    NEW DELHI,

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OCTOBER 17, 2008.