K. Ilayarajalingam Vs. K. Karthikeyan - (High Court of Madras) (20 Jun 2022)

Offence under Section 138 of Negotiable Instruments Act will get attracted, if the debt is legally enforceable

MANU/TN/4633/2022

Criminal

The revision Petitioner is the accused on the file of the Judicial Magistrate, in a private complaint initiated under Section 138 of Negotiable Instruments Act, 1881. The cheque dated 16th November, 2015 drawn by the Petitioner for a sum of Rs. 9 lakhs in favour of one K. Karthikeyan/Respondent is the subject matter of the complaint.

The trial Court held that, the complainant failed to prove the fundamental fact that the cheque was issued towards legally enforceable debt. The complainant preferred Appeal before the II Additional Sessions Court. The appellate Court held that, the accused failed to rebut the presumption under Section 139 of the Act. The capacity to advance loan of Rs. 9 lakhs need not be proved by the complainant and therefore, dismissal of the complaint by the trial Court is erroneous. The Appellate Court reversed the order of the acquittal and convicted the accused.

When a specific defence raised by the accused person at the inception itself even before filing the complaint, the complainant is bound to explain in his complaint regarding the source of income. Failure to explain his source of income is fatal to the complaint. The person capacity to advance loan of Rs. 9 lakhs is a very fundamental fact, when the capacity is questioned. To add, the complainant admits that he did not receive any other document for advancing loan of Rs. 9 lakhs, except the post-dated cheque given to him. In any transaction, when cheque is issued, it is presumed to be issued to discharge the existing debt.

Offence under Section 138 of Act will get attracted, if the said debt happens to be legally enforceable. Therefore, the existing debt pre-suppose a presumption. If the accused able to prove by preponderance of probabilities that there was no existing debt on the date on which the cheque bears, then the complainant under Section 138 of the Act cannot have the advantage of the statutory presumption under Section 139 of the Act.

As pointed out by the Hon'ble Supreme Court in Basalingappa v. Mudiasappa, when the capacity to advance loan or transaction for which the alleged cheque given is denied, the complainant cannot take advantage of Section 139 of the Act without discharging his burden of proving the fundamental fact regarding transaction, which has created an existing debt (or) his capacity to advance loan atleast equivalent to the amount found in the cheque. In present case, for the cheque amount is Rs. 9 lakhs, no other previous existing debt (or) transaction claimed in the complaint. No evidence was produced by the complainant to prove his financial capacity to advance a huge sum of Rs. 9 lakhs.

Taking into consideration his background admittedly a small time farmer holding 6 acres of land and not even a bank savings account claiming he advanced loan of Rs. 9 lakhs as against the post-dated cheque and no other document obtained for the money transaction, is bound to be suspected. Present Court holds that the appellate Court erred in reversing the trial Court judgment. The finding of the appellate Court is legally not sustainable. Present Criminal Revision Case is allowed.

Tags : FINANCIAL CAPACITY DEBT PROOF