Case: T.P. MURUGAN(DEAD) THROUGH LRS Vs. BOJAN

and sentenced him to undergo R.I. for six months and Fine of Rs.5000/-, failing which, he shall undergo one months R.I. 4. Aggrieved by the said judgment, the respondent-accused filed Criminal Appeal Nos. 437-438 of 2006 before the District and Sessions Judge, Fast Track Court No. III, Coimbatore. The District and Sessions Judge held that the presumption under Sections 118 and 139 of the N.I. Act was not rebutted by the respondent. It was proved by the complainants that there were insufficient funds in the bank account of the respondent at the time of issuance of the cheques. The respondent had with mala fide intention issued "Stop Payment" instructions. The respondent failed to give any explanation as to how the Pronote came into possession of the appellant. Furthermore, the Sessions Court discarded the evidence adduced by the accused, of DW.2 Mahesh, as being an interested witness, who had falsely stated that he was an employee of N.R.R. Finances. This was rebutted by two witnesses viz. PW.2 and PW.4, who were Directors of N.R.R. Finances who deposed that DW.2 was never employed by this Company. The District and Sessions Court affirmed the conviction and sentence awarded by the Trial Court. 5. Aggrieved by the judgment and order dated 26.11.2008 passed by the District and Sessions Judge, Fast Track Court No. III, Coimbatore, the respondent-accused filed two Criminal Revision Nos. 1657-1658 of 2008 before the Madras High Court. That even though the appellants herein- complainants had initially participated in the proceedings, the present appellant was unrepresented during the final hearing. The hearing of the Criminal Revision Petitions proceeded ex parte. The High Court recorded that the respondent-accused had not denied either the issuance of the cheques, or his signatures on the Pronote and cheques. The denial was only with regard to the circumstances, the manner and the period during which the cheques were issued. The High Court took the view that the burden cast on the respondent-accused was only to raise a doubt in the mind of the Court about the nature of the transaction. The Ld. Single Judge accepted the contention of the respondent that since the cheques and the Pronote were issued on the same date, it could only be treated as a security, and was not towards any debt or liability. By raising a doubt with respect to the circumstances in which the Pronote and cheques were issued, the respondent had discharged the presumption under S. 139 of the N.I. Act. The High Court held that the Trial Court and the Sessions Court erred in applying the legal principles of standard of proof for the complainant to prove their case. The High Court, while exercising its revisional jurisdiction, reversed the concurrent findings of the Courts below, and set aside the judgment of conviction and sentence passed against the accused. 6. Aggrieved by the judgment and order dated 27.09.2013 passed in Criminal Revision Nos. 1657-1658 of 2008, the appellant-complainants filed the present Special Leave Petitions. Mrs. V. Mohana, Sr. Adv. represented the appellants, and submitted that the respondentaccused has admitted his signatures on the two dishonoured cheques and on the Pronote. The appellants-complainants had adduced sufficient evidence to prove their case. Reliance was placed by the Senior Counsel on the decisions of this Court in Rangappa vs. Shrimohan [(2010) 11 SCC 441] , K.N. Beena vs. Muniyappan and Anr. [(2001)8 SCC 458] ; and T. Vasanthakumar vs. Vijayakumari [(2015)8 SCC 378] in support of her case. 7. Mr. R. Basanth, Sr. Counsel appeared on behalf of the respondent-accused, and contended inter alia that the cheques were not issued towards discharge of a legally enforceable debt, but as a security, and that the judgment under challenge required no interference. 8. We have heard Senior Counsel for both parties, and perused the record. Under Section 139 of the N.I. Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability1. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan. In the present case, the respondent has failed to produce any credible evidence to rebut the statutory presumption. This would be evident from the following circumstances:- (i) The respondent-accused issued a Pronote for the amount covered by the cheques, which clearly states that it was being issued for a loan; (ii) The defence of the respondent that he had allegedly issued 10 blank cheques in 1995 for repayment of a loan, has been disbelieved both by the Trial Court and Sessions Court, on the ground that the respondent did not ask for return of the cheques for a period of seven years from 1995. This defence was obviously a cover-up, and lacked credibility, and hence was rightly discarded. (iii) The letter dated 09.11.2002 was addressed by the respondent after he had issued two 1 Refer to K.N. Beena Vs. Muniyappan and Another[(2001) 8 SCC 458 ; para 6] and Rangappa vs. Shrimohan [(2010) 11 SCC 441 ; para 26] 9 cheques on 07.08.2002 for Rs.37,00,000/- and Rs.14,00,000/- knowing fully well that he did not have sufficient funds in his account. The letter dated 09.11.2002 was an after-thought, and was written to evade liability. This defence also lacked credibility, as the appellants had never asked for return of the alleged cheques for seven years. (iv) The defence of the respondent that the Pronote dated 07.08.2002 signed by him, was allegedly filled by one Mahesh-DW.2, an employee of N.R.R. Finances, was rejected as being false. DW.2 himself admitted in his cross-examination, that he did not file any document to prove that he was employed in N.R.R. Finances. On the contrary, the appellants - complainants produced PW.2 and PW.4, Directors of N.R.R. Finances Investment Pvt. Ltd., and PW.3, a Member of N.R.R. Chit funds, who deposed that DW.2 was never employed in N.R.R. Finances.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]We have heard Senior Counsel for both parties, and perused the record. Under Section 139 of the N.I. Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for athe present case, the respondent has failed to produce any credible evidence to rebut the statutory presumption. This would be evident from the followinged issued a Pronote for the amount covered by the cheques, which clearly states that it was being issued for aThe defence of the respondent that he had allegedly issued 10 blank cheques in 1995 for repayment of a loan, has been disbelieved both by the Trial Court and Sessions Court, on the ground that the respondent did not ask for return of the cheques for a period of seven years from 1995. This defence was obviously aand lacked credibility, and hence was rightlyThe letter dated 09.11.2002 was addressed by the respondent after he had issued twocheques on 07.08.2002 for Rs.37,00,000/ng fully well that he did not have sufficient funds in his account. The letter dated 09.11.2002 was anand was written to evade liability. This defence also lacked credibility, as the appellants had never asked for return of the alleged cheques for sevenThe defence of the respondent that the Pronote dated 07.08.2002 signed by him, was allegedly filled by onean employee of N.R.R. Finances, was rejected as being false. DW.2 himself admitted in histhat he did not file any document to prove that he was employed in N.R.R. Finances. On the contrary, the appellantscomplainants produced PW.2 and PW.4, Directors of N.R.R. Finances Investment Pvt. Ltd., and PW.3, a Member of N.R.R. Chit funds, who deposed that DW.2 was never employed in N.R.R. Finances.