ANSS RAJASHEKAR vs. AUGUSTUS JEBA ANANTH

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.

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').

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:

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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.

Additional Chief Metropolitan Magistrate at Bangalore being CC No. 26999 of 2006 under Section 138 of the Act on 9 September 2005.

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

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.

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.

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

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.

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.

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

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:

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.

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.

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.

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

reference to the reasons furnished by the first appellate court. The High Court adverted to the judgment of this

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.

that having regard to the law laid down by the three

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.

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 application(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)