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2004 DIGILAW 1179 (AP)

V. Munikrishnaiah v. C. Janakirama Naidu

2004-10-12

C.Y.SOMAYAJULU

body2004
C. Y. SOMAYAJULU, J. ( 1 ) ALLEGING that the cheque dt. 15-03-1994 for Rs. 50,000/- drawn by the first respondent, in his favour, on Akonam Cooperative Urban limited, Arkonam, towards part payment of the price payable by him forthe chowke trees sold to the first respondent was returned with an endorsement of insufficient funds and that he (first respondent) ended to receive the statutory notice sent to him under section 138 of the Negotiable Instruments act, 1881 (the Act), after knowing the contents therein and failed to pay the amount converted by the dishonored cheque, appellant filed a private complaint under Section 138 of the act against the first respondent and examined himself as P. W. 1 and marked Exs. P-1 to p-9 on his behalf. First respondent who denied the offence did not examine any witness on his behalf. ( 2 ) NEGATIVING the contention of the first respondent that there is no proper service of the statutory notice on him, on the basis that appellant failed to establish that the dishonoured cheque was issued towards part payment of a legally enforceable debt, the learned Magistrate, acquitted the first respondent. Hence, this appeal by the complainant. ( 3 ) THOUGH the case is being listed for hearing, neither the learned counsel for the appellant nor the learned counsel for the first respondent is present. Since an appeal admitted for hearing cannot be dismissed for default, and has to be disposed of on merits as held in Shyam Deo v. State of Bihar and khaili v. State of U. P. ,1 am considering the appeal on merits. ( 4 ) SINCE the finding of the learned magistrate is that there is valid service of the statutory notice as contemplated by section 138 of the Act on the first respondent, the only point for consideration is whether the dishonored cheque was issued by the first respondent towardsa legally enforceable debt or liability due to the appellant or not. ( 5 ) A reading of the judgment under appeal shows that the learned Magistrate placed the burden of proof to establish that the dishonoured cheque was issued towards discharge of a legally enforceable debt on the appellant, obviously without taking notice of Section 139 of the Act, which reads:"presumption in favour of holder. ( 5 ) A reading of the judgment under appeal shows that the learned Magistrate placed the burden of proof to establish that the dishonoured cheque was issued towards discharge of a legally enforceable debt on the appellant, obviously without taking notice of Section 139 of the Act, which reads:"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, or any debt or other liability". shall presume as per Section 4 of Evidence act means that the Court has to presume the fact as proved till it is disproved by the opposite party. The Apex Court had occasions to consider the effect Section 139 of the Act in a number of decisions. In Maruti Udyog Ltd. v. Narender it is held:"in view of the express provision of section 139 of the Negotiable instruments Act, 1881, a presumption must be drawn that the holder of the cheque received the cheque, of the nature referred to in Section 138, forthe discharge of any debt or other liability unless the contrary is proved. Therefore, the High Court was not justified in entertaining and accepting the plea of the accused-respondent at the initial stage of the proceedings and quashing the complaints filed by the appellant. "in M. M. T. C. v. Medchil Chemicals and pharma it is held at page 240 as follows:"here is therefore no requirement that the complainant must specifically allege in the complaint that there was subsisting liability. The burden of proving that there was noexistingdebt or liability was on the respondents. This they have to discharge in the trial" (underlining mine) in K. N. Beena v. Muniyappar it is held:"under Section 139 the court has to presume, unless the contrary was proved, that the holder of the cheque received the cheque for discharge, in whole or in part, of a debt or liability. Thus in complaints under Section 138, the court has to presume that the cheque had been issued for a debt or liability. This presumption is rebuttable. "in Anil Hada v. Indian Acrylic Limited at para-15 at page 214 it is held:"the aforesaid presumption is in favor of the holder of the cheque. It is not mentioned in the section that the said presumption would operateonly against the drawer. This presumption is rebuttable. "in Anil Hada v. Indian Acrylic Limited at para-15 at page 214 it is held:"the aforesaid presumption is in favor of the holder of the cheque. It is not mentioned in the section that the said presumption would operateonly against the drawer. After all a presumption is only of casting the burden of proof as to who should adduce evidence in a case. It is open to any one of the accused to adduce evidence to rebut the said presumption. In a persecution where both the drawer company and its office bearers are arrayed as accused, and if the drawer company does not choose to adduce any rebuttal evidence it is open to the other office bearers-accused to adduce such rebuttal evidence. If that be so, even in a case where the drawn company is not made an accused but the office bearers of the company alone are made the accused such office bearers-accused are well within their rights to adduce rebuttal evidence to establish that the company did not issue the cheque towards any antecedent liability. " ( 6 ) IN view of the above, it is clear that the burden to establish that the dishonoured cheque was not issued towards any legally enforceable debt or liability is on the first respondent, who is the drawer of the dishonoured cheque, but not on the appellant, who is the payee. For reasons best known to himfirst respondent, did not choose to adduce any evidence to rebut the presumption under section 139 of the Act in favour of the appellant. So, it has to be taken that the dishonoured cheque was issued by the first respondent towards a legally enforceable debt or liability to the appellant and, so, it cannot but be said that the appellant established the guilty of the first respondent for an offence under Section 138 of the Act beyond all reasonable doubt. ( 7 ) IN view thereof acquittal of the first respondent by the trial Court cannot but be side to be perverse and in ignorance of the statutory presumption. So, the appellant has to be allowed. ( 8 ) THEREFORE, the appeal is allowed. First respondent is convicted for an offence under section 138 of the Act and is sentenced to suffer rigorous imprisonment for a period of four monthsand a fine of Rs. So, the appellant has to be allowed. ( 8 ) THEREFORE, the appeal is allowed. First respondent is convicted for an offence under section 138 of the Act and is sentenced to suffer rigorous imprisonment for a period of four monthsand a fine of Rs. 50,000/- (Rupees fifty thousand only) out of which Rs. 48,000/- (Rupees forty eight thousand only) shall be paid to the appellant as compensation.