1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S).95-96 OF 2019
(Arising out of Special Leave Petition(Crl.) No(s).
3737-3738 of 2016)
ANSS RAJASHEKAR APPELLANT(s)
VERSUS
AUGUSTUS JEBA ANANTH RESPONDENT(s)
J U D G M E N T
DR.DHANANJAYA Y. CHANDRACHUD,J.
Leave granted.
These appeals arise from the judgment and order of a
learned Single Judge of the High Court of Karnataka dated
14 November 2014, reversing the judgment of the Lower
Appellate Court acquitting the appellant of an offence
under Section 138 of the Negotiable Instruments Act, 1881
('the Act').
The case of the respondent-complainant is that on 09
March 2005, the appellant issued a cheque in the sum of
Rs.5 lakhs in his favour, towards discharge of a
liability of Rs.15 lakhs, in repayment of an amount which
2
was borrowed in the month of February, 2004. According
to the complainant, the amount was repayable within six
months. When the complainant presented the cheque on 23
March 2005, it was returned by the bank for insufficiency
of funds. The complainant presented the cheque again for
realisation on 14 July, 2005 but it was returned with the
same result. A notice of demand was issued by the
complainant on 10 August, 2005. In response, the
appellant-accused denied that there was a legally
enforceable debt. In his reply, the appellant stated
thus:
"4. My client and his wife and your
client and his wife had purchased separate
house sites in Survey No. 96/3 at
Hoaramvuagrahara Village, Krishnarajapuram
Hobli, Bangalore on 31.01.2001. All these
sites situate adjacent to each other. Your
client enticed my client and my client�s
wife to give power in his favour so that he
could pursue the matter of getting housing
loan from financial institutions at
Bangalore. However your client prepared the
power deed incorporating the clauses for
sale also. When my client questioned about
the inclusion of clauses for sale, your
client had stated that it had inadvertently
typed and the purpose of power deed is only
for obtaining loan and so it need not be
registered.
5. Besides this power deed your client
also obtained from my client the original
3
document being Document No. 10470/2001 and
Khatha, Tax Receipts, Approved plan and also
4 blank cheques of U.T.I. Bank Ltd,
Tuticorin including the cheque mentioned in
your notice and Vysya Bank, Bangalore Cheque
Book containing 10 leaves.
6. Your client obtained these cheques
stating that the financial institutions will
insist for the cheque leaves when the loan
is sanctioned as to use these cheques for
monthly repayment of loan amount. Your
client has now misused the one such cheque
as if it was issued by my client on
09.03.2005. Subsequently my client and his
wife canceled the power deed and also
requested your client to return the cheques
and documents. However, your client is very
particular to grab house sites along with
half way constructed building for him and
his father. An attempt was also made earlier
in this regard. Your client's father
colluding with your client sent a notice
dated 09.05.05 containing false allegations
to my client to execute the sale deed of
said house site situate at the above
mentioned survey number in favour of him.
Since the attempt frizzled out, now the son,
your client is trying in a different way,
illegally using the mentioned cheque to
harass my client to part with the said house
site."
As the above reply indicates, the defence of the
appellant was that the appellant and his wife and the
complainant and his wife had purchased adjacent house
sites. The complainant was alleged to have persuaded the
appellant to execute a power of attorney in his favour
4
for the purpose of obtaining a housing loan from the
financial institutions in Bangalore. According to the
appellant as many as four blank cheques of U.T.I Bank
Ltd. and a Vysya Bank cheque Book containing ten leaves
were obtained by the complainant from the appellant. One
of the cheques which were handed over by the appellant to
the respondent-complainant was alleged to have been
misused.
The complainant lodged a complaint before the
Additional Chief Metropolitan Magistrate at Bangalore
being CC No. 26999 of 2006 under Section 138 of the Act
on 9 September 2005.
The Trial court by a judgment dated 31 January 2009
acquitted the appellant. The complainant - respondent
filed Criminal Appeal No. 285 of 2009 before the High
Court. By its judgment dated 29 October 2010 the High
Court allowed the appeal and remitted the matter to the
Trial court, having regard to the judgment of this Court
in � Rangappa Versus Sri Mohan � 1
. On remand, the Trial
court by a judgment dated 5 March 2011 convicted the
appellant and sentenced him to undergo imprisonment of
one year and to pay a fine of Rs.7 lakhs out of which an
1 ( 2010) 11 SCC 441
5
amount of Rs.6.75 lakhs was directed to be paid to the
respondent by way of compensation. The appellant
instituted Criminal Appeal No. 245 of 2011 before the
Additional Sessions Jude, Bangalore. By a judgment dated
05 March, 2012, the First Appellate Court reversed the
conviction and sentence recorded by the Trial court. The
respondent thereupon filed a Criminal Appeal before the
High Court, being Criminal Appeal No. 861 of 2012. The
High Court reversed the judgment of acquittal, recording
that while the notice of the appeal was served upon the
appellant, he had remained absent. While recording the
conviction under Section 138 of the Act, the High Court
modified the sentence to the effect that the appellant
shall pay a fine of Rs.5 lakhs which would be paid as
compensation to the respondent and, in default, he shall
suffer imprisonment for a period of three months. The
conviction recorded by the Trial court was maintained but
the amount of fine was reduced, as noted above.
On 29 April 2016, notice was issued on the question
of limitation, there being a delay of 410 days in filing
the special leave petition as well as on the petition.
Having considered the cause shown by the appellant for
6
condoning the delay we deem it appropriate to condone the
delay. We do not find from the record of this case that
there was any deliberate act of neglect on the part of
the appellant in pursuing his remedies.
Assailing the judgment of the High Court, learned
counsel appearing on behalf of the appellant has
addressed the submissions on two aspects. First, it is
submitted that there is an absence of a legally
enforceable debt. Hence, it is urged that the conviction
which has been recorded by the High Court is
unsustainable. Secondly, it is urged that the appellant
discharged the burden which is cast by the provisions of
Section 139 and established a defence on a preponderance
of probabilities as required by the judgment of this
Court in Rangappa (supra). The learned counsel has
extensively relied upon the judgment of acquittal by the
Additional Sessions Judge dated 5 March, 2012, adopting
the appreciation of evidence in that judgment as the
submissions of the appellant in support of the present
appeal. Learned counsel submitted that the High Court
should have been circumspect in overturning the judgment
of acquittal. No reasons have been disclosed in the
7
impugned judgment upon assessment of evidence, much less
reasons for coming to the conclusion that the acquittal
by the first appellate court was either perverse or would
lead to a miscarriage of justice.
On the other hand, learned counsel appearing on
behalf of the complainant-respondent has submitted,
placing reliance on the judgment in Rangappa (supra),
that the appellant failed to discharge the burden which
cast upon him and that the presumption under Section 139
of the Act applies to the facts of the present case.
Adverting to the material on the record it is urged that
the fact that the cheque was signed by the accused and
was drawn on the bank where he has an account is not in
dispute. It is urged that the defence was correctly
appreciated by the Trial court while recording a
conviction under Section 138 and the High Court in
restoring that conviction has not fallen into error.
Section 139 of the Act mandates that it shall be
presumed, unless the contrary is proved, that the holder
of a cheque received it, in discharge, in whole or in
part, of a debt, or liability. The expression "unless the
contrary is proved" indicates that the presumption under
8
Section 139 of the Act is rebuttable. Terming this as an
example of a �reverse onus clause� the three Judge Bench
of this Court in Rangappa (supra) held that in
determining whether the presumption has been rebutted,
the test of proportionality must guide the determination.
The standard of proof for rebuttal of the presumption
under Section 139 of the Act is guided by a preponderance
of probabilities. This Court held thus:
�28 In the absence of compelling
justifications, reverse onus clauses
usually impose an evidentiary burden and
not a persuasive burden. Keeping this in
view, it is a settled position that when an
accused has to rebut the presumption under
Section 139, the standard of proof for
doing so is that of `preponderance of
probabilities'. Therefore, if the accused
is able to raise a probable defence which
creates doubts about the existence of a
legally enforceable debt or liability, the
prosecution can fail . As clarified in the
citations, the accused can rely on the
materials submitted by the complainant in
order to raise such a defence and it is
conceivable that in some cases the accused
may not need to adduce evidence of his/her
own.� (emphasis supplied)
In the present case, it is necessary now to consider
whether the presumption under Section 139 stands rebutted
by the accused-appellant. The defence of the appellant is
9
that he has not borrowed the amount of Rs. 15 lakhs from
the complainant as alleged nor had he issued the cheque
(Exhibit P-1) in discharge of a legally enforceable debt.
Specifically, the defence of the accused is that no
payment was made by the complainant to him, in discharge
of which the cheques have been issued. His defence was
that the cheque was issued to the complainant on an
assurance of a loan which would be obtained from a
financial institution. This, as we have noted, was also
the defence in reply to the notice of demand issued by
the complainant.
It is in this background, it would be necessary to
advert to the material which was relied upon by the first
appellate court to acquit the accused-appellant. During
the course of his cross-examination, PW-1 admitted that a
General Power of Attorney was executed by the appellant
in his favour. Admittedly the appellant and the
respondent are related and there was some civil
litigation between the father of the complainant and the
appellant. The complainant admitted that, as a matter of
fact, he himself received an amount of Rs.10 lakhs from
the appellant under a loan transaction but stated that he
10
had repaid that amount to the appellant. PW-1 stated that
the appellant had requested him for a loan of Rs.15 lakhs
in February 2004. The defence of the appellant being that
no amount was actually paid by the complainant to him,
the evidence of PW-1 in regard to the payment of the loan
assumes significance. According to PW-1, the loan of
Rs.15 lakhs was paid into the hands of a representative
of the appellant at his request. The appellant failed to
indicate even the name of the representative to whom the
alleged amount of Rs.15 lakhs is stated to have been paid
over in cash. The entire amount, significantly, is
alleged to have been paid over without obtaining a
receipt or document evidencing the payment of the amount.
In the notice of demand that was issued by the
complainant to the appellant after the cheque had been
returned for want of funds, the complainant stated that
the appellant had sought a 'financial accommodation' of
Rs.15 Lakhs and paid a sum of Rs.20,000 (corrected
thereafter in a corrigendum). The first appellate court
noted in the course of its judgment that while conducting
the cross-examination of the accused, the complainant had
stated that the accused had demanded a loan of Rs.15
lakhs, but at that time the complainant had only paid an
11
amount of Rs.5 Lakhs as a loan for which the accused
issued Exhibit P1. This suggestion was specifically
denied by the accused. In this context, the first
appellate court observed that whether the complainant had
furnished a hand loan of Rs.15 lakhs to the accused as
stated in the complaint or whether the complainant had
paid Rs.20 lakhs as mentioned in the legal notice dated
10 August 2004 or whether he had paid an amount of Rs.5
lakhs as suggested during the course of cross-examination
was a matter of serious doubt. If the complainant had
paid Rs.15 lakhs to the accused, the suggestion during
the course of cross-examination of having paid an amount
of Rs.5 lakhs casts serious doubt on the existence of a
debt in the first place.
Besides what has been set out above, an important
facet in the matter was that the complainant failed to
establish the source of funds which he is alleged to have
utilized for the disbursal of the loan of Rs.15 lakhs to
the appellant. During the course of his cross-examination
the complainant deposed that earlier, the appellant had
furnished two cheques, one of ICICI Bank for Rs.5 lakhs
and another of Canara Bank for Rs.10 lakhs which he had
12
presented. The complainant admitted that he had not
mentioned anything about the accused having issued these
two cheques in his complaint. Nothing was stated by the
complainant in regard to the fate of the earlier two
cheques which were allegedly issued by the appellant. The
non-disclosure of the facts pertaining to the earlier two
cheques, and the steps, if any, taken for recovery was
again a material consideration which indicated that there
was a doubt in regard to the transaction.
On a totality of the facts and circumstances and
based on the evidence on the record, the first appellate
court held that the presumption under Section 139 of the
Act stood rebutted and that the defence stood
probabalised. From the judgment of the High Court, the
significant aspect of the case which stands out is that
there has been no appreciation of the evidence or even a
reference to the reasons furnished by the first appellate
court. The High Court adverted to the judgment of this
Court in Rangappa (supra). Having adverted to that
decision, the High Court reversed the order of acquittal
by holding that a mere denial of the transactions or an
omnibus denial of the entire transaction could not be
13
considered as a tenable defence. The judgment of the High
Court is unsatisfactory and does not contain any
reference to the evidence whatsoever. There was
absolutely no valid basis to displace the findings of
fact which were arrived at by the first appellate court,
while acquitting the accused.
For the reasons indicated above, we are of the view
that having regard to the law laid down by the three
Judge Bench in Rangappa (supra) the appellant duly
rebutted the presumption under Section 139 of the Act.
His defence that there was an absence of a legally
enforceable debt was rendered probable on the basis of
the material on record. Consequently, the order of
acquittal passed by the first appellate court was
justified.
In the circumstances, we allow these appeals and set
aside the impugned judgment of the High Court convicting
the appellant under Section 138 of the Act. We,
accordingly, restore the order of acquittal passed by the
first appellate court.
14
.... ..........................J.
[DR.DHANANJAYA Y. CHANDRACHUD]
.... ........................J.
[M.R. SHAH]
NEW DELHI;
JANUARY 18, 2019.
15
ITEM NO.39 COURT NO.11 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).
3737-3738/2016
(Arising out of impugned final judgment and order dated
14-11-2014 in CRLAP No. 861/2012 21-01-2016 in IA No.
1/2015 21-01-2016 in CRLAP No. 861/2012 passed by the
High Court Of Karnataka At Bengaluru)
ANSS RAJASHEKAR Petitioner(s)
VERSUS
AUGUSTUS JEBA ANANTH Respondent(s)
Date : 18-01-2019 These petitions were called on for
hearing today.
CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE M.R. SHAH
For Petitioner(s) Mr. Jay Kishor Singh, AOR
For Respondent(s) Mr. Abhay Kumar, AOR
Mr. Saurabh Mishra, Adv.
Mr. Vineet Kumar Singh, Adv.
Mr. Himanshu Pal Singh, Adv.
UPON hearing the counsel the Court made the
following
O R D E R
Leave granted.
(ASHWANI THAKUR) (SAROJ KUMARI GAUR)
16
COURT MASTER (SH) BRANCH OFFICER
17
ITEM NO.39 COURT NO.11 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).
3737-3738/2016
(Arising out of impugned final judgment and order dated 14-11-2014
in CRLAP No. 861/2012 21-01-2016 in IA No. 1/2015 21-01-2016 in
CRLAP No. 861/2012 passed by the High Court Of Karnataka At
Bengaluru)
ANSS RAJASHEKAR Petitioner(s)
VERSUS
AUGUSTUS JEBA ANANTH Respondent(s)
Date : 18-01-2019 These petitions were called on for hearing today.
CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE M.R. SHAH
For Petitioner(s) Mr. Jay Kishor Singh, AOR
For Respondent(s) Mr. Abhay Kumar, AOR
Mr. Saurabh Mishra, Adv.
Mr. Vineet Kumar Singh, Adv.
Mr. Himanshu Pal Singh, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeals are allowed in terms of the signed reportable
judgment.
Pending applicat ion(s), if any, stands disposed of
accordingly.
(ASHWANI THAKUR) (SAROJ KUMARI GAUR)
COURT MASTER (SH) BRANCH OFFICER
(Signed reportable judgment is placed on the file)
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO(S).95-96 OF 2019
(Arising out of Special Leave Petition(Crl.) No(s).
3737-3738 of 2016)
ANSS RAJASHEKAR APPELLANT(s)
VERSUS
AUGUSTUS JEBA ANANTH RESPONDENT(s)
J U D G M E N T
DR.DHANANJAYA Y. CHANDRACHUD,J.
Leave granted.
These appeals arise from the judgment and order of a
learned Single Judge of the High Court of Karnataka dated
14 November 2014, reversing the judgment of the Lower
Appellate Court acquitting the appellant of an offence
under Section 138 of the Negotiable Instruments Act, 1881
('the Act').
The case of the respondent-complainant is that on 09
March 2005, the appellant issued a cheque in the sum of
Rs.5 lakhs in his favour, towards discharge of a
liability of Rs.15 lakhs, in repayment of an amount which
2
was borrowed in the month of February, 2004. According
to the complainant, the amount was repayable within six
months. When the complainant presented the cheque on 23
March 2005, it was returned by the bank for insufficiency
of funds. The complainant presented the cheque again for
realisation on 14 July, 2005 but it was returned with the
same result. A notice of demand was issued by the
complainant on 10 August, 2005. In response, the
appellant-accused denied that there was a legally
enforceable debt. In his reply, the appellant stated
thus:
"4. My client and his wife and your
client and his wife had purchased separate
house sites in Survey No. 96/3 at
Hoaramvuagrahara Village, Krishnarajapuram
Hobli, Bangalore on 31.01.2001. All these
sites situate adjacent to each other. Your
client enticed my client and my client�s
wife to give power in his favour so that he
could pursue the matter of getting housing
loan from financial institutions at
Bangalore. However your client prepared the
power deed incorporating the clauses for
sale also. When my client questioned about
the inclusion of clauses for sale, your
client had stated that it had inadvertently
typed and the purpose of power deed is only
for obtaining loan and so it need not be
registered.
5. Besides this power deed your client
also obtained from my client the original
3
document being Document No. 10470/2001 and
Khatha, Tax Receipts, Approved plan and also
4 blank cheques of U.T.I. Bank Ltd,
Tuticorin including the cheque mentioned in
your notice and Vysya Bank, Bangalore Cheque
Book containing 10 leaves.
6. Your client obtained these cheques
stating that the financial institutions will
insist for the cheque leaves when the loan
is sanctioned as to use these cheques for
monthly repayment of loan amount. Your
client has now misused the one such cheque
as if it was issued by my client on
09.03.2005. Subsequently my client and his
wife canceled the power deed and also
requested your client to return the cheques
and documents. However, your client is very
particular to grab house sites along with
half way constructed building for him and
his father. An attempt was also made earlier
in this regard. Your client's father
colluding with your client sent a notice
dated 09.05.05 containing false allegations
to my client to execute the sale deed of
said house site situate at the above
mentioned survey number in favour of him.
Since the attempt frizzled out, now the son,
your client is trying in a different way,
illegally using the mentioned cheque to
harass my client to part with the said house
site."
As the above reply indicates, the defence of the
appellant was that the appellant and his wife and the
complainant and his wife had purchased adjacent house
sites. The complainant was alleged to have persuaded the
appellant to execute a power of attorney in his favour
4
for the purpose of obtaining a housing loan from the
financial institutions in Bangalore. According to the
appellant as many as four blank cheques of U.T.I Bank
Ltd. and a Vysya Bank cheque Book containing ten leaves
were obtained by the complainant from the appellant. One
of the cheques which were handed over by the appellant to
the respondent-complainant was alleged to have been
misused.
The complainant lodged a complaint before the
Additional Chief Metropolitan Magistrate at Bangalore
being CC No. 26999 of 2006 under Section 138 of the Act
on 9 September 2005.
The Trial court by a judgment dated 31 January 2009
acquitted the appellant. The complainant - respondent
filed Criminal Appeal No. 285 of 2009 before the High
Court. By its judgment dated 29 October 2010 the High
Court allowed the appeal and remitted the matter to the
Trial court, having regard to the judgment of this Court
in � Rangappa Versus Sri Mohan � 1
. On remand, the Trial
court by a judgment dated 5 March 2011 convicted the
appellant and sentenced him to undergo imprisonment of
one year and to pay a fine of Rs.7 lakhs out of which an
1 ( 2010) 11 SCC 441
5
amount of Rs.6.75 lakhs was directed to be paid to the
respondent by way of compensation. The appellant
instituted Criminal Appeal No. 245 of 2011 before the
Additional Sessions Jude, Bangalore. By a judgment dated
05 March, 2012, the First Appellate Court reversed the
conviction and sentence recorded by the Trial court. The
respondent thereupon filed a Criminal Appeal before the
High Court, being Criminal Appeal No. 861 of 2012. The
High Court reversed the judgment of acquittal, recording
that while the notice of the appeal was served upon the
appellant, he had remained absent. While recording the
conviction under Section 138 of the Act, the High Court
modified the sentence to the effect that the appellant
shall pay a fine of Rs.5 lakhs which would be paid as
compensation to the respondent and, in default, he shall
suffer imprisonment for a period of three months. The
conviction recorded by the Trial court was maintained but
the amount of fine was reduced, as noted above.
On 29 April 2016, notice was issued on the question
of limitation, there being a delay of 410 days in filing
the special leave petition as well as on the petition.
Having considered the cause shown by the appellant for
6
condoning the delay we deem it appropriate to condone the
delay. We do not find from the record of this case that
there was any deliberate act of neglect on the part of
the appellant in pursuing his remedies.
Assailing the judgment of the High Court, learned
counsel appearing on behalf of the appellant has
addressed the submissions on two aspects. First, it is
submitted that there is an absence of a legally
enforceable debt. Hence, it is urged that the conviction
which has been recorded by the High Court is
unsustainable. Secondly, it is urged that the appellant
discharged the burden which is cast by the provisions of
Section 139 and established a defence on a preponderance
of probabilities as required by the judgment of this
Court in Rangappa (supra). The learned counsel has
extensively relied upon the judgment of acquittal by the
Additional Sessions Judge dated 5 March, 2012, adopting
the appreciation of evidence in that judgment as the
submissions of the appellant in support of the present
appeal. Learned counsel submitted that the High Court
should have been circumspect in overturning the judgment
of acquittal. No reasons have been disclosed in the
7
impugned judgment upon assessment of evidence, much less
reasons for coming to the conclusion that the acquittal
by the first appellate court was either perverse or would
lead to a miscarriage of justice.
On the other hand, learned counsel appearing on
behalf of the complainant-respondent has submitted,
placing reliance on the judgment in Rangappa (supra),
that the appellant failed to discharge the burden which
cast upon him and that the presumption under Section 139
of the Act applies to the facts of the present case.
Adverting to the material on the record it is urged that
the fact that the cheque was signed by the accused and
was drawn on the bank where he has an account is not in
dispute. It is urged that the defence was correctly
appreciated by the Trial court while recording a
conviction under Section 138 and the High Court in
restoring that conviction has not fallen into error.
Section 139 of the Act mandates that it shall be
presumed, unless the contrary is proved, that the holder
of a cheque received it, in discharge, in whole or in
part, of a debt, or liability. The expression "unless the
contrary is proved" indicates that the presumption under
8
Section 139 of the Act is rebuttable. Terming this as an
example of a �reverse onus clause� the three Judge Bench
of this Court in Rangappa (supra) held that in
determining whether the presumption has been rebutted,
the test of proportionality must guide the determination.
The standard of proof for rebuttal of the presumption
under Section 139 of the Act is guided by a preponderance
of probabilities. This Court held thus:
�28 In the absence of compelling
justifications, reverse onus clauses
usually impose an evidentiary burden and
not a persuasive burden. Keeping this in
view, it is a settled position that when an
accused has to rebut the presumption under
Section 139, the standard of proof for
doing so is that of `preponderance of
probabilities'. Therefore, if the accused
is able to raise a probable defence which
creates doubts about the existence of a
legally enforceable debt or liability, the
prosecution can fail . As clarified in the
citations, the accused can rely on the
materials submitted by the complainant in
order to raise such a defence and it is
conceivable that in some cases the accused
may not need to adduce evidence of his/her
own.� (emphasis supplied)
In the present case, it is necessary now to consider
whether the presumption under Section 139 stands rebutted
by the accused-appellant. The defence of the appellant is
9
that he has not borrowed the amount of Rs. 15 lakhs from
the complainant as alleged nor had he issued the cheque
(Exhibit P-1) in discharge of a legally enforceable debt.
Specifically, the defence of the accused is that no
payment was made by the complainant to him, in discharge
of which the cheques have been issued. His defence was
that the cheque was issued to the complainant on an
assurance of a loan which would be obtained from a
financial institution. This, as we have noted, was also
the defence in reply to the notice of demand issued by
the complainant.
It is in this background, it would be necessary to
advert to the material which was relied upon by the first
appellate court to acquit the accused-appellant. During
the course of his cross-examination, PW-1 admitted that a
General Power of Attorney was executed by the appellant
in his favour. Admittedly the appellant and the
respondent are related and there was some civil
litigation between the father of the complainant and the
appellant. The complainant admitted that, as a matter of
fact, he himself received an amount of Rs.10 lakhs from
the appellant under a loan transaction but stated that he
10
had repaid that amount to the appellant. PW-1 stated that
the appellant had requested him for a loan of Rs.15 lakhs
in February 2004. The defence of the appellant being that
no amount was actually paid by the complainant to him,
the evidence of PW-1 in regard to the payment of the loan
assumes significance. According to PW-1, the loan of
Rs.15 lakhs was paid into the hands of a representative
of the appellant at his request. The appellant failed to
indicate even the name of the representative to whom the
alleged amount of Rs.15 lakhs is stated to have been paid
over in cash. The entire amount, significantly, is
alleged to have been paid over without obtaining a
receipt or document evidencing the payment of the amount.
In the notice of demand that was issued by the
complainant to the appellant after the cheque had been
returned for want of funds, the complainant stated that
the appellant had sought a 'financial accommodation' of
Rs.15 Lakhs and paid a sum of Rs.20,000 (corrected
thereafter in a corrigendum). The first appellate court
noted in the course of its judgment that while conducting
the cross-examination of the accused, the complainant had
stated that the accused had demanded a loan of Rs.15
lakhs, but at that time the complainant had only paid an
11
amount of Rs.5 Lakhs as a loan for which the accused
issued Exhibit P1. This suggestion was specifically
denied by the accused. In this context, the first
appellate court observed that whether the complainant had
furnished a hand loan of Rs.15 lakhs to the accused as
stated in the complaint or whether the complainant had
paid Rs.20 lakhs as mentioned in the legal notice dated
10 August 2004 or whether he had paid an amount of Rs.5
lakhs as suggested during the course of cross-examination
was a matter of serious doubt. If the complainant had
paid Rs.15 lakhs to the accused, the suggestion during
the course of cross-examination of having paid an amount
of Rs.5 lakhs casts serious doubt on the existence of a
debt in the first place.
Besides what has been set out above, an important
facet in the matter was that the complainant failed to
establish the source of funds which he is alleged to have
utilized for the disbursal of the loan of Rs.15 lakhs to
the appellant. During the course of his cross-examination
the complainant deposed that earlier, the appellant had
furnished two cheques, one of ICICI Bank for Rs.5 lakhs
and another of Canara Bank for Rs.10 lakhs which he had
12
presented. The complainant admitted that he had not
mentioned anything about the accused having issued these
two cheques in his complaint. Nothing was stated by the
complainant in regard to the fate of the earlier two
cheques which were allegedly issued by the appellant. The
non-disclosure of the facts pertaining to the earlier two
cheques, and the steps, if any, taken for recovery was
again a material consideration which indicated that there
was a doubt in regard to the transaction.
On a totality of the facts and circumstances and
based on the evidence on the record, the first appellate
court held that the presumption under Section 139 of the
Act stood rebutted and that the defence stood
probabalised. From the judgment of the High Court, the
significant aspect of the case which stands out is that
there has been no appreciation of the evidence or even a
reference to the reasons furnished by the first appellate
court. The High Court adverted to the judgment of this
Court in Rangappa (supra). Having adverted to that
decision, the High Court reversed the order of acquittal
by holding that a mere denial of the transactions or an
omnibus denial of the entire transaction could not be
13
considered as a tenable defence. The judgment of the High
Court is unsatisfactory and does not contain any
reference to the evidence whatsoever. There was
absolutely no valid basis to displace the findings of
fact which were arrived at by the first appellate court,
while acquitting the accused.
For the reasons indicated above, we are of the view
that having regard to the law laid down by the three
Judge Bench in Rangappa (supra) the appellant duly
rebutted the presumption under Section 139 of the Act.
His defence that there was an absence of a legally
enforceable debt was rendered probable on the basis of
the material on record. Consequently, the order of
acquittal passed by the first appellate court was
justified.
In the circumstances, we allow these appeals and set
aside the impugned judgment of the High Court convicting
the appellant under Section 138 of the Act. We,
accordingly, restore the order of acquittal passed by the
first appellate court.
14
.... ..........................J.
[DR.DHANANJAYA Y. CHANDRACHUD]
.... ........................J.
[M.R. SHAH]
NEW DELHI;
JANUARY 18, 2019.
15
ITEM NO.39 COURT NO.11 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).
3737-3738/2016
(Arising out of impugned final judgment and order dated
14-11-2014 in CRLAP No. 861/2012 21-01-2016 in IA No.
1/2015 21-01-2016 in CRLAP No. 861/2012 passed by the
High Court Of Karnataka At Bengaluru)
ANSS RAJASHEKAR Petitioner(s)
VERSUS
AUGUSTUS JEBA ANANTH Respondent(s)
Date : 18-01-2019 These petitions were called on for
hearing today.
CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE M.R. SHAH
For Petitioner(s) Mr. Jay Kishor Singh, AOR
For Respondent(s) Mr. Abhay Kumar, AOR
Mr. Saurabh Mishra, Adv.
Mr. Vineet Kumar Singh, Adv.
Mr. Himanshu Pal Singh, Adv.
UPON hearing the counsel the Court made the
following
O R D E R
Leave granted.
(ASHWANI THAKUR) (SAROJ KUMARI GAUR)
16
COURT MASTER (SH) BRANCH OFFICER
17
ITEM NO.39 COURT NO.11 SECTION II-C
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (Crl.) No(s).
3737-3738/2016
(Arising out of impugned final judgment and order dated 14-11-2014
in CRLAP No. 861/2012 21-01-2016 in IA No. 1/2015 21-01-2016 in
CRLAP No. 861/2012 passed by the High Court Of Karnataka At
Bengaluru)
ANSS RAJASHEKAR Petitioner(s)
VERSUS
AUGUSTUS JEBA ANANTH Respondent(s)
Date : 18-01-2019 These petitions were called on for hearing today.
CORAM : HON'BLE DR. JUSTICE D.Y. CHANDRACHUD
HON'BLE MR. JUSTICE M.R. SHAH
For Petitioner(s) Mr. Jay Kishor Singh, AOR
For Respondent(s) Mr. Abhay Kumar, AOR
Mr. Saurabh Mishra, Adv.
Mr. Vineet Kumar Singh, Adv.
Mr. Himanshu Pal Singh, Adv.
UPON hearing the counsel the Court made the following
O R D E R
Leave granted.
The appeals are allowed in terms of the signed reportable
judgment.
Pending applicat ion(s), if any, stands disposed of
accordingly.
(ASHWANI THAKUR) (SAROJ KUMARI GAUR)
COURT MASTER (SH) BRANCH OFFICER
(Signed reportable judgment is placed on the file)
