[Cheque Dishonour] When Defence Of Accused Is Not Believable, Court Can Infer That He Issued A Cheque For The Said Transaction: Karnataka HC

The Karnataka High Court has held that in a case of dishonour of cheque registered under the Negotiable Instruments Act when the defence of the accused is not believable, inference can be drawn by the court that he made a transaction with the complainant and issued a cheque for the said transaction.A single judge bench of Justice S Rachaiah observed thus while dismissing a petition filed by one Rangaswamy challenging the order of the conviction passed by the trial court under Section 138 of the Act. As per the complainant Ravi Kumar, it was said the accused is said to have borrowed a sum of Rs.55,000 in the month of September 2012 and agreed to repay the said amount to the complainant within six months. It was stated that after six months when the complainant demanded to repay the amount, the accused said to have issued a cheque for a sum of Rs.55,000/-. When the cheque was presented for encashment, it came to be dishonoured with a 'funds insufficient'. It was stated that thereafter the complainant issued a legal notice calling upon the accused to repay the said cheque amount. Despite the notice having been served, the accused neither repaid the amount nor replied to the said notice. Hence, a complaint was registered by the complainant, it was submitted.The petitioners argued that the trial court failed to consider the non-service of notice which is required mandatorily in terms of Section 138(b) of the N.I Act. It was submitted that the respondent has failed to produce any document to show that he has advanced the loan to the accused. It was stated that despite disproving the existence of a legally recoverable debt, the Trial Court recorded the conviction which was required to be set aside. The complainant justified the conviction stating that despite notice having been served to the accused regarding dishonour of cheque, he has not replied to the said notice. It was argued that though he has denied the transaction, the signature has not been disputed and admitted that the cheque belongs to him. Mere denial of the transaction would not be sufficient to rebut the presumption, it was argued.The bench noted that it is a settled principle of law that the accused has to rebut the presumption by leading the cogent evidence to substantiate his case. Rejecting the contention of the accused that cheques were issued to one Kantharaju and they had been misused by the complainant, the court said “On careful reading of the evidence of DW.1, it is contended that he had issued a cheque to Kantharaju and those cheques have been misused by the complainant-Sri.Ravi kumar and DW.2-Sri.Venkatesh. However, the accused has failed to produce any documents, both oral and documentary, regarding those cheques issued to Kantharaju. When the defence of the accused is not believable, inference can be drawn that he made a transaction with the complainant and issued a cheque for the said transaction.” Thus it held that the trial court's order recording a conviction was justified and did not need to to be interfered with. Accordingly, it dismissed the petition. Appearance: Advocate Harish Babu K N for Petitioner.Advocate Prasanna V R HCGP for respondent. Citation No: 2024 LiveLaw (Kar) 175Case Title: Rangaswamy AND Ravi KumarCase No: CRIMINAL REVISION PETITION NO. 841 OF 2020Click Here To Read/Download Order

[Cheque Dishonour] When Defence Of Accused Is Not Believable, Court Can Infer That He Issued A Cheque For The Said Transaction: Karnataka HC

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[Cheque Dishonour] When Defence Of Accused Is Not Believable, Court Can Infer That He Issued A Cheque For The Said Transaction: Karnataka HC

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