Lender filed a complaint under section 138 against borrower, wherein Trial Court passed an order of conviction against the borrower. The borrower filed appeal against the order on the ground that cheques in question were issued to lender's father and same were misused by the lender. Sessions Court passed an order of acquittal of the borrower as the lender failed to prove existence of debt or liability of the borrower. The lender filed an appeal against the order on the ground that as signature was admitted by the borrower and he did not reply to legal notice so statutory presumption under section 139 was in favour of the lender. Held: The lender did not anywhere mention date or year of loan transaction and failed to produce any evidence regarding advancing of hand loan to the borrower. Even though the borrower admitted his signature on the cheques but burden to prove existence of debt or liability was on the lender, which he failed to prove. Statutory presumption under section 139 cannot automatically be raised without any clear reference to a loan transaction. Further, it was proved by the borrower that the cheques were issued as part of a sale agreement between the borrower and lender's father and only for security purpose. Such cheques did not bear name of the drawee so was misused by the lender. The bank account from which the cheques were drawn was closed as the borrower was employee of such bank but got transferred to another branch. Thus, the Sessions Court rightly passed the order of acquittal of the borrower.
IN THE KARNATAKA HIGH COURT
SREENIVAS HARISH KUMAR, J.
Shekar Shetty v. Shanker Shetty
Criminal Appeal No. 1161 of 2014
17 October, 2022
Appellant by: K. Jeevan, Advocate
Respondents by: H. Pavan Chandra Shetty, Advocate
This appeal is filed under section 378(4) of the Code of Criminal Procedure by the complainant in C.C. No. 3028/2008.
2. The facts in brief are that the complainant initiated action under section 200 Cr.P.C. in the Court of Magistrate First Class, Mangalore for the offence punishable under section 138 of N.I. Act against the accused as two cheques dated 2-5-2007 and 2-6-2007 drawn on Vijaya Bank, Mulki for a sum of Rs. 35,000 each were dishonoured for the reasons that the accused had closed his account and that there was no sufficient balance in the account. The complainant got issued demand notice to the accused and as the latter failed to comply with the demand, accused came to be prosecuted.
3. After assessing the evidence, both oral and documentary produced by the complainant as also the accused, the learned Magistrate recorded conviction and sentenced the accused to fine of Rs. 79,000 and directed him to undergo imprisonment for one year in case of default in paying fine. Out of fine amount, Rs. 77,000 was ordered to be paid as compensation to the complainant. The accused approached the Sessions Court, Mangalore by filing Criminal Appeal No. 133/2013, which was allowed on 3-11-2014 and the accused came to be acquitted. Aggrieved by the judgment of the Sessions Court, this appeal has been preferred.