Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 1860 OF 2011
K.S. Ranganatha .…Appellant(s)
Versus
Vittal Shetty …. Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
1. The appellant is before this Court assailing the
judgment dated 18.08.2010 passed by the High Court of
Karnataka in Criminal Appeal No. 485 of 2008. By the said
judgment, the Learned Single Judge has allowed the appeal
Signature Not Verified
filed by the respondent herein and set aside the judgment of
Digitally signed by
SATISH KUMAR YADAV
Date: 2021.12.08
16:49:15 IST
Reason:
acquittal passed by the IIIrd Additional Civil Judge (Junior
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Division) and JMFC, Udupi in favour of the appellant herein
in Criminal Case No. 3207 of 2004. Consequently, the
appellant herein was convicted and sentenced to pay
compensation of Rs.4,00,000/ (Rupees four lakhs) within
four months. In default thereto, the appellant was sentenced
to simple imprisonment for a period of six months. The
appellant was further ordered to pay a fine of Rs.5,000/ to
the State, in default, to undergo simple imprisonment for a
period of 15 days. The appellant therefore is claiming to be
aggrieved by the judgment impugned herein.
The factual matrix, in brief, is that the appellant and
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the respondent are known to each other. Both of them hail
from Udupi in Karnataka. The respondent filed a private
complaint under Section 2(d) read with Section 200 of the
Code of Criminal Procedure (‘Cr.PC’ for short) against the
appellant seeking that he be punished for committing the
offence punishable under Section 138 of the Negotiable
Instruments Act, 1881 (‘NI Act’ for short). The complaint was
filed on 17.03.2004 before the II Additional Civil Judge (Junior
Division) and JMFC, Udupi in P.C. No. 213 of 2004 which was
thereafter registered as CC No. 3207 of 2004. It was the case
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of the respondent that the appellant carried on the business
of money lending and land brokerage for which he used to
take loan from the respondent as and when required. In one
such transaction, as per the case put forth by the respondent
is that the appellant borrowed a sum of Rs. 3,75,000/
(Rupees three lakh seventyfive thousand) from the
respondent on 12.06.2003 and executed an ‘on demand
promissory note’ and a receipt in acknowledgment. The
appellant also issued a postdated cheque bearing No. 062589
for Rs. 4,00,000/ (Rupees four lakhs) dated 12.12.2003,
which included interest for six months. The said cheque was
drawn on Corporation Bank, Ambalpady Branch, Udupi.
3. As per the case of the respondent, when the cheque was
presented for realisation on 17.02.2004, the same was
dishonoured by the bank for “insufficient funds” in the
account of the appellant. Having got issued a legal notice
dated 18.02.2004 and on the demand for payment of
Rs.4,00,000/ (Rupees four lakhs) not being complied, the
respondent filed the complaint in the jurisdictional court, the
details of which is referred to supra. The appellant however
came out with the defence that though he had borrowed an
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amount of Rs.80,000/ from the respondent in the year 1995,
the same was repaid with interest, amounting to
Rs.3,20,000/ (Rupees three lakh twenty thousand) through
various cheques and there was no further amount due and
payable. The appellant therefore denied that he had taken any
loan on 12.06.2003, as alleged. It was the further case of the
appellant that the respondent had assaulted and threatened
him on 20.01.2004 and by force had obtained his signatures
on blank papers as also on some cheque leaves which were
being misused. The appellant had in that regard lodged a
complaint on 02.02.2004, the trial of which was held in the
Court of Additional Civil Judge (Junior Division) and JMFC,
Udupi in CC No. 6318/2004. However, admittedly the
respondent herein was acquitted in the said proceedings,
through the judgment dated 06.12.2006 which has attained
finality.
In order to contend that the complaint filed by the
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respondent alleging dishonour of cheque was motivated, the
appellant alleged that as he had incurred debts, he decided to
sell one of the properties belonging to him, which was
purchased in the year 1994, so as to clear the said debts. The
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respondent evinced interest to purchase the same for
Rs.3,00,000/ (Rupees three lakh) but the appellant declined
to sell it to the respondent as according to him, the said
property was worth more than Rs.7,00,000/ (Rupees seven
lakh). The appellant alleged that the respondent had therefore
filed the instant complaint, based on false allegations.
5. On the rival contentions, the learned trial Judge raised
the point for consideration, as to whether the respondent
herein had proved that the cheque dated 12.12.2003 for Rs.
4,00,000/ (Rupees four lakh) was issued by the appellant to
discharge the legal debt or liability and thereby committed the
offence punishable under Section 138 N.I Act. The learned
trial Judge having accepted the version put forth by the
appellant passed an order of acquittal. The learned Judge of
the High Court, has on the other hand, accepted the case of
the respondent herein and taking into account the
presumption that had arisen on the cheque being issued and
such presumption not being rebutted for the reasons
indicated by it, has allowed the appeal and convicted the
appellant which has resulted in this appeal.
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6. We have heard Mr. S.N. Bhat, learned counsel for the
appellant, Mr. Ranji Thomas, learned senior counsel with Mr.
V.N. Raghupathy, learned counsel for the respondent and
perused the appeal papers.
7. From the rival contentions urged before us and the
facts which emerge from the records, it is clear that cheque
bearing No.062589 dated 12.12.2003 drawn on Corporation
Bank, Ambalpady Branch, Udupi for the sum of Rs.
4,00,000/ (Rupees four lakh), which is the subject matter of
the complaint in CC No.3207 of 2004, has been brought on
record. However, in the light of the defence that was raised,
the point which arises for consideration is as to whether the
said cheque was in fact issued by the appellant on 12.06.2003
by postdating it to 12.12.2003 and making it payable on or
after that date, towards discharge of a legal debt.
The legal aspect relating to the presumption arising in
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law when a cheque is issued, is to be noted at the threshold.
No doubt, as noted by the trial court with reference to the
decision of this Court in K.Prakashan vs. P.K. Surendran
(2008) 1 SCC 258, the initial burden is placed on the
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complainant to discharge. Learned counsel for the appellant
has further relied on the decision of this Court in Reverend
(2013) 1
Mother Marykutty vs. Reni C. Kottaram & Anr.
SCC 327 with reference to para 13, which reads as hereunder;
“13. That apart, having considered the
conclusions of the learned trial Judge, we find
that those conclusions were drawn by
adducing cogent and convincing reasoning
and we do not find any fault in the said
conclusions drawn by the learned trial Judge.
In the circumstance, the principles set out in
the decision relied upon by the learned
counsel for the appellant in M.S. Narayana
Menon as regards the presumption to be
drawn and the preponderance of probabilities
to be inferred, as set out in paras 31 to 33, are
fully satisfied. Those principles, set out in
paras 31 to 33, can be usefully referred to
which are as under:
“31. A Division Bench of this Court in Bharat
Barrel & Drum Mfg. Co. v. Amin Chand Payrelal
albeit in a civil case laid down the law in the
following terms:
(SCC PP.50-51 para 12)
‘12. Upon consideration of various judgments
as noted hereinabove, the position of law
which emerges is that once execution of the
promissory note is admitted, the presumption
under Section 118(a) would arise that it is
supported by a consideration. Such a
presumption is rebuttable. The defendant can
prove the non-existence of a consideration by
raising a probable defence. If the defendant is
proved to have discharged the initial onus of
proof showing that the existence of
consideration was improbable or doubtful or
the same was illegal, the onus would shift to
the plaintiff who will be obliged to prove it as
a matter of fact and upon its failure to prove
would disentitle him to the grant of relief on
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the basis of the negotiable instrument. The
burden upon the defendant of proving the
non-existence of the consideration can be
either direct or by bringing on record the
preponderance of probabilities by reference to
the circumstances upon which he relies. In
such an event, the plaintiff is entitled under
law to rely upon all the evidence led in the
case including that of the plaintiff as well. In
case, where the defendant fails to discharge
the initial onus of proof by showing the non-
existence of the consideration, the plaintiff
would invariably be held entitled to the
benefit of presumption arising under Section
118(a) in his favour. The court may not insist
upon the defendant to disprove the existence
of consideration by leading direct evidence as
the existence of negative evidence is neither
possible nor contemplated and even if led, is
to be seen with a doubt.’
This Court, therefore, clearly opined that it is
not necessary for the defendant to disprove
the existence of consideration by way of direct
evidence.
32. The standard of proof evidently is
preponderance of probabilities. Inference of
preponderance of probabilities can be drawn
not only from the materials on record but also
by reference to the circumstances upon which
he relies.
33. Presumption drawn under a statute has
only an evidentiary value. Presumptions are
raised in terms of the Evidence Act.
Presumption drawn in respect of one fact may
be evidence even for the purpose of drawing
presumption under another.”
Applying the abovesaid principles to the case
on hand, we find that the judgment of the trial
court in having drawn the conclusions to the
effect that the appellant sufficiently rebutted
the initial presumption as regards the
issuance of the cheque under Sections 138
and 139 of the Act, was perfectly justified. We
also find that the preponderance of
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probabilities also fully supports the stand of
the appellant as held by the learned trial
Judge. The judgment of the High Court in
having interfered with the order of acquittal
passed by the learned trial Judge without
proper reasoning is, therefore, liable to be set
aside and is accordingly set aside.
Consequently, the conviction and sentence
imposed in the impugned judgment [ Criminal
Appeal No. 1707 of 2007, order dated 17-3-
2010 (Ker)] is also set aside.”
The learned senior counsel for the respondent on the
9.
other hand, relied on the decision of this Court in
Kalamani
Tex & Anr. vs. P. Balasubramanian (2021) 5 SCC 283
which is as hereunder:
“16. The appellants have banked upon the
evidence of DW 1 to dispute the existence of
any recoverable debt. However, his deposition
merely highlights that the respondent had an
over-extended credit facility with the bank and
his failure to update his account led to debt
recovery proceedings. Such evidence does not
disprove the appellants' liability and has a
little bearing on the merits of the respondent's
complaint. Similarly, the appellants' mere bald
denial regarding genuineness of the deed of
undertaking dated 7-11-2000, despite
admitting the signatures of Appellant 2
thereupon, does not cast any doubt on the
genuineness of the said document.
17. Even if we take the arguments raised by
the appellants at face value that only a blank
cheque and signed blank stamp papers were
given to the respondent, yet the statutory
presumption cannot be obliterated. It is useful
to cite Bir Singh v. Mukesh Kumar [Bir
Singh v. Mukesh Kumar, where this Court held
that: (SCC p. 209, para 36)
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“36. Even a blank cheque leaf,
voluntarily signed and handed over
by the accused, which is towards
some payment, would attract
presumption under Section 139 of the
Negotiable Instruments Act, in the
absence of any cogent evidence to
show that the cheque was not issued
in discharge of a debt.”
18. Considering the fact that there has been
an admitted business relationship between
the parties, we are of the opinion that the
defence raised by the appellants does not
inspire confidence or meet the standard of
“preponderance of probability”. In the
absence of any other relevant material, it
appears to us that the High Court did not err
in discarding the appellants' defence and
upholding the onus imposed upon them in
terms of Section 118 and Section 139 of NIA.
19. As regards the claim of compensation
raised on behalf of the respondent, we are
conscious of the settled principles that the
object of Chapter XVII of NIA is not only
punitive but also compensatory and
restitutive. The provisions of NIA envision a
single window for criminal liability for
dishonour of cheque as well as civil liability for
realisation of the cheque amount. It is also
well settled that there needs to be a
consistent approach towards awarding
compensation and unless there exist special
circumstances, the courts should uniformly
levy fine up to twice the cheque amount along
with simple interest @ 9% p.a.
10. It would also be apposite to take note of a decision in
in Criminal Appeal
Triyambak S. Hegde vs. Sripad
Nos.849850 of 2011 dated 23.09.2021 wherein it was
observed as hereunder:
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“12. Insofar as the payment of the
amount by the appellant in the context
of the cheque having been signed by
the respondent, the presumption for
passing of the consideration would
arise as provided under Section 118(a)
of N.I. Act which reads as hereunder:
“118. Presumptions as to negotiable
instruments – Until the contrary is proved,
the following presumptions shall be made:
(a) of consideration – that every
negotiable instrument was made or
drawn for consideration, and that
every such instrument, when it has
been accepted, indorsed, negotiated
or transferred, was accepted,
indorsed, negotiated or transferred
for consideration. ”
13. The above noted provisions are
explicit to the effect that such
presumption would remain, until the
contrary is proved. The learned
counsel for the appellant in that
regard has relied on the decision of
this court in
K. Bhaskaran vs.
Sankaran Vaidhyan Balan & Anr.
(1999) 7 SCC 510 wherein it is held as
hereunder:
“ 9. As the signature in the cheque is
admitted to be that of the accused,
the presumption envisaged
in Section 118 of the Act can legally
be inferred that the cheque was
made or drawn for consideration on
the date which the cheque
bears. Section 139 of the Act enjoins
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on the Court to presume that the
holder of the cheque received it for
the discharge of any debt or liability.
The burden was on the accused to
rebut the aforesaid presumption.
The Trial Court was not persuaded
to rely on the interested testimony of
DW1 to rebut the presumption. The
said finding was upheld by the High
Court. It is not now open to the
accused to contend differently on
that aspect.”
14. The learned counsel for the
respondent has however referred to the
decision of this Court in
Basalingappa vs. Mudibasappa
(2019) 5 SCC 418 wherein it is
held as hereunder:
“25. We having noticed the ratio laid
down by this Court in the above
cases on Sections 118 (a) and 139,
we now summarise the principles
enumerated by this Court in
following manner:
25.1. Once the execution of cheque
is admitted Section 139 of the Act
mandates a presumption that the
cheque was for the discharge of any
debt or other liability.
25.2. The presumption
under Section 139 is a rebuttable
presumption and the onus is on the
accused to raise the probable
defence. The standard of proof for
rebutting the presumption is that of
preponderance of probabilities.
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25.3. To rebut the presumption, it
is open for the accused to rely on
evidence led by him or the accused
can also rely on the materials
submitted by the complainant in
order to raise a probable defence.
Inference of preponderance of
probabilities can be drawn not only
from the materials brought on
record by the parties but also by
reference to the circumstances upon
which they rely.
25.4. That it is not necessary for the
accused to come in the witness box
in support of his defence, Section
139 imposed an evidentiary burden
and not a persuasive burden.
25.5. It is not necessary for the
accused to come in the witness box
to support his defence.”
11. The position of law as noted above makes it crystal
clear that when a cheque is drawn out and is relied upon by
the drawee, it will raise a presumption that it is drawn
towards a consideration which is a legally recoverable
amount; such presumption of course, is rebuttable by
proving to the contrary. The onus is on the accused to raise a
probable defence and the standard of proof for rebutting the
presumption is on preponderance of probabilities.
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12. In the backdrop of the legal position being enunciated,
the facts herein are to be noted. It was the case of the
respondent herein that the appellant had borrowed the sum of
Rs.3,75,000/ (Rupees three lakh seventyfive thousand) on
12.06.2003 which was agreed to be repaid with interest in six
months. Hence, cheque No.062589 dated 12.12.2003 for
Rs.4,00,000/ (Rupees four lakh) drawn on Corporation Bank
was issued. It is true that the respondent had relied on an ‘on
demand promissory note’ and had stated that one Mr. Harish
Moolya was also present. The said Mr. Harish Moolya who had
also signed as witness to the ‘on demand promissory note’ was
not examined as a witness due to which the learned trial
Judge held the transaction as not proved and in that context
it was held that the respondent has failed to prove the case
beyond reasonable doubt. However, it is to be noted that the
respondent had tendered evidence relating to the cheque
being issued and had discharged the initial burden.
13. The entire consideration by the learned Trial Judge to
arrive at his conclusion was predicated on the allegation
levelled by the appellant that an incident had occurred on
20.01.2004 when the respondent is stated to have obtained
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the cheque and signatures on certain blank papers by using
force. Much is made about the respondent having presented
the cheque during February 2004 to assume that he would
not have waited that long if the cheque was really dated
12.12.2003 and was issued earlier. Such an assumption
would not be justified when, in fact, the cheque is dated
12.12.2003 and was presented within its period of validity. To
assume the incident alleged by the appellant to have occurred
on 20.01.2004 to be true, the cheque ought to have been
dated on or after 20.01.2004. The date of presentation of the
cheque is of no consequence provided it is presented within its
validity period. That the alleged offence had been committed
by the respondent on 20.01.2004 itself, was considered in
C.C. No.6318/2004. When a jurisdictional Court had gone
into the very same allegation and had rendered its judgment
on 06.12.2006, another court exercising coordinate
jurisdiction could not have brushed it aside lightly.
The learned Judge of the High Court also referred to the
14.
earlier proceedings only as a passing reference. In the instant
case, what needs to be noted is the defence that had been put
forth before the learned Magistrate to defeat the case of the
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respondent herein, so as to consider whether such contention
of the appellant can still be considered as a probable defence.
The defence put forth by the appellant in the instant case i.e.,
Section 138 NI Act proceedings in C.C. No.3207 of 2004 as
referred to by the learned Magistrate in the course of the
judgment, reads as hereunder:
“It is further alleged that during the year
2003, in order to clear off the dues to some
others, the accused has decided to sell the
above referred property and the accused
expressed his desire to sell his property before
the complainant. At that time, the
complainant proposed to purchase the said
property from the accused for Rs.3,00,000/,
but the accused has refused to sell the said
property to the complainant for the above said
amount of Rs.3,00,000/- since, the property is
worth Rs. 7 lakh. In view of the proposal made
by the complainant for small amount, the
accused is declined to sell his property to him.
Thereafter, the accused himself began to
search the customers for purchasing the said
property at that time the complainant mislead
the proposed purchasers who are ready to
purchase the said property representing that
the said property was pledged by the accused
for the purpose of loan which was obtained by
the accused from the finance of the
complainant and accordingly, the purchasers
who are come forward to purchase the same
refused to purchase the said property thereby,
the accused transferred some of the portion of
the said property to his creditors and some of
the portion was transferred in the name of his
wife. When facts stood thus, on 20.1.04, when
the accused went to taluk office at Udupi with
his bike, the complainant chased the accused
in his Maruthi Omni Van and thereafter,
kidnapped the accused and took him to his
office which was situated at Sri. Rama Building
at Udupi, wherein the complainant wrongfully
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restrained the accused and assaulted him with
hands and also with iron rods and forcibly
obtained various signatures on some blank
papers and also on some cheque leaves only
with an intention to knock off the property of
the accused. It is further alleged that at that
time the complainant warned the accused to
get some papers from the wife of the accused
since the property was stands in the name of
the wife of the accused. At that time the
complainant further threatened that he will
finish the life of the accused as well as wife
and children of the accused, if the said alleged
act is intimated by the accused to the police.
Thereafter the said incident, the complainant
appointed the paid goondas to watch the
activities of the accused and the said goonda
people also always watched the activities of
the accused nearby the compound of the
accused, thereby, there was delay in lodging
the complaint and accordingly, the accused
herein lodged the complaint against the
complainant on 2.2.04 nearly after lapse of 12
days from the date of incident. It is further
alleged that the complainant is having
criminal mind and he has got every criminal
background and also faced various criminal
charges like offences punishable u/s. 302 and
326 of IPC and also engaged in Criminal
activities amongst those, this incident is also
one of the charge faced by the accused. It is
further alleged that the accused never issued
the cheque in question voluntary and the
same was obtained by the complainant by
force and accordingly, the case was registered
against the complainant for the offences
punishable u/s. 365, 342, 323 and 506 of IPC
and accordingly, the cheque in question and
some other documents also misused by the
complainant against the accused. In the light
of the above said defence, the accused
humbly prayed for acquittal.”
A close perusal of the above indicates that the sum and
15.
substance of the defence is that the documents and cheque
had been obtained by the respondent on 20.01.2004 by
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threatening the appellant. In that regard, the circumstances
thereto were referred and it has been categorically stated that
the appellant had filed a complaint, pursuant to which a case
was registered against the respondent for the offence
punishable under Sections 365, 342, 323 and 506 of IPC. This
makes it relevant for us to take note of the aspect that was
considered in the above noted criminal complaint filed by the
appellant. The said case was registered as C.C. No.6318 of
2004. In that case, the learned Magistrate, on taking note of
the allegation made by the appellant, had raised the points for
consideration and the findings were summarised. They are as
follows:
“5. Heard both sides and perused the record.
Now, the points that arise for the due
consideration of this Court are as follows:
(1) Whether the prosecution proves
beyond all reasonable doubts that on
20.1.2004 at about 11 p.m. within the
jurisdiction of Udupi Town PS at Shivalli
Village in Sriram Building at Room No. 11
i.e. inside Svitha Finance, having old
hatred, the accused locked up CW1 K.S.
Rangnathan inside the said finance,
thereby wrongfully confined CW1
committed the offence punishable U/s.
342 of IPC?
(2) Whether the prosecution further
proves beyond all reasonable doubts that
on the same date, place and time, the
accused in continuation voluntarily
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assaulted with his hands on the face,
neck and other parts of the body of CWl
and thereby committed the offence
punishable U/s. 323 of IPC?
(3) Whether the prosecution further
proves beyond all reasonable doubts that
on the same date, place and time, the
accused in continuation threatened the
life of CWl, his wife and children if CWl
will not return the loan amount within the
prescribed time and thereby committed
the offence punishable U/s. Part II of 506
of IPC.
(4) What order?
6. Now the findings of this Court on the above
said points that arisen for due consideration are
answered as follows:
Point No. 1 : In the Negative
Point No. 2: In the Negative
Point No. 3: In the Negative
Point No. 4: As per final order for the
following:”
16. To arrive at the negative findings on the points
raised, the learned Magistrate has assigned detailed
reasons and has arrived at the conclusion that the
evidence of the complainant in respect of the incident
alleged to have taken place near the Taluk office, is not at
all acceptable and therefore the prosecution has failed.
Further, though an investigation was conducted in the
said proceedings and the trial had proceeded, no material
objects had been seized, which has been commented
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upon by the learned Magistrate. The same would indicate
that the cheques and other documents relied upon in the
present proceedings, were not found to be created by
threatening the appellant, as alleged. The Court had
therefore arrived at the conclusion that the prosecution
had miserably failed to prove its case beyond all
reasonable doubts against the accused for the alleged
offences. The said finding and conclusion arrived at in the
relevant proceedings would indicate that the incident
alleged to have occurred on 20.01.2004, was not proved
to have taken place.
17. If that be the position, the defence sought to be put
forth in the instant case and the witnesses examined in
the instant proceedings are only by way of improvement
in respect of the same cause of action. Therefore, the
defence sought to be put forth relating to the cheque and
other documents having been obtained by force, cannot
be accepted as a probable defence when the respondent
successfully discharged the initial burden cast on him of
establishing that the cheque signed by the appellant was
issued in his favour toward discharge of a legally
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recoverable amount. The fact that the appellant has
admitted about an earlier transaction where according to
him, he had borrowed the amount and repaid the same in
the year 1995, would indicate that the appellant and the
respondent had entered into financial transactions earlier
as well and another transaction was probable between the
parties who were known to each other. In the light of the
other circumstances established by the respondent, it
would indicate that the respondent had discharged the
burden of proving that the transaction had actually taken
place. To rebut the same, the very case put forth by the
appellant cannot be accepted as probable defence since
the said aspect had already been considered in a separate
proceeding (C.C.No.6318/2004) and the respondent had
been acquitted in the said proceedings.
18. Hence, the conclusion reached by the learned
Magistrate in C.C. No.3207/2004 to acquit the appellant
herein, was not justified. The learned Single Judge of the
High Court was therefore justified in his conclusion
though detailed reasons have not been assigned. In that
view, we see no reason to interfere with the judgment
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dated 18.08.2010, passed by the High Court in Criminal
Appeal No.485/2008, impugned in this appeal.
19. Accordingly, the appeal being devoid of merit stands
dismissed. The parties shall bear their own costs.
20. Pending applications, if any, shall stand disposed of.
….…………………….CJI.
(N.V. RAMANA)
..……………………….J.
(A.S. BOPANNA)
…….……………………J.
(HIMA KOHLI)
New Delhi,
December 08, 2021
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