T. VASANTHAKUMAR Vs. VIJAYAKUMARI

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Crl.), 728 of 2015, Judgment Date: Apr 28, 2015

                                                                  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.

Leave granted.

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 respondent herein.

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.

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  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  returned  with  the  report:  “Absent   -   Information
delivered”. Even after the notice was served,  the  defendant  neither  made
the payment nor responded to the same.

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 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.

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
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.

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 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.

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 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.”

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.”

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 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.

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, 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.

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.

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 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.