C. KESHAVAMURTHYversusH.K. ABDUL ZABBAR

                    [2013] 8 S.C.R. 429


                   C. KESHAVAMURTHY                              A
                              v.
                   H.K. ABDUL ZABBAR
            (Criminal Appeal No. 1026 of 2013)
                       JULY 23, 2013
                                                                 B
     [H.L. GOKHALE AND J. CHELAMESWAR, JJ.]

     Negotiable Instruments Act, 1881 - ss. 138 and 139 -
Dishonour of cheque - Complaint - Conviction by trial court
and appellate court - Acquittal by revisional court - On         C
appeal, held: Once the complaint case of cheque bouncing
is prima facie established, the burden is on the accused to
disprove the allegations - The accused in the instant case
failed to disprove the a/legation - Hence, order of conviction
upheld.                                                          D

     Four cheques issued by respondents, in favour of
the appellants were dishonoured. Appellant filed
complaint u/s. 138 of Negotiable Instruments Act, 1881.
Respondent took the plea that the cheques were issued            E
in respect of some business transaction and the
payments of the cheques were stopped by him by a
notice. Trial court convicted the respondent not accepting
his plea. Appellate Court confirmed the conviction. In
revision, High Court acquitted him holding that the
respondent had raised an acceptable defence. Hence the           F
present appeal.

    Allowing the appeal, the Court

     HELD: The presumption under Section 139 of the              G
Negotiable Instruments Act, 1881, includes the
presumption of the existence at a legally enforceable debt
or liability. That presumption is required to be honoured,
and if it is not so done, the entire basis of making these
                             429                                 H
    430      SUPREME COURT REPORTS              [2013) 8 S.C.R.


A provisions will be lost. Therefore, it is for the accused to
  explain his case and defend it once the fact of cheque
  bouncing is prima facie established. The burden· is on him
  to disprove the allegations once a prima facie case is
  made out by the Complainant. In the instant case, it has
B clearly come on record that disputed cheques were
  given subsequent to the Notice not to clear the earlier
  cheques. There was no explanation as to why the
  subsequent cheques could not have been cleared. The
  agreement on the basis of which the submission was
c made was not produced in the courts below. That being
  so, on facts there was no error on the part of the trial court
  as well as the appellate court in the view that they have
  taken. [Paras 9 and 11] [433-H; 434-A-B, E-F]
          Rangappa vs. Sri Mohan 2010 (11) SCC 441: 2010 (6)
D SCR 507 - relied on.
         Krishna Janardhan Bhat vs. Dattatraya G. Hegde 2008
    (4) SCC 54: 2008 (1) SCR 605 - referred to.
                      . Case Law reference:
E
          2008 (1) SCR 605       referred to         Para 7
          2010 (6) SCR 507       relied no           Para 9
        CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
F   No{s). 1026 of 2013.

        From the Judgment and Order dated 08.12.2008 of the
    High Court of Karnataka at Bangalore in Crl R.P. No. 1295 of
    2006.
G       R.S. Hegde, Girish Anantmurthy, Chandra Prakash, Rajeev
    Singh, for the Appellant.

        G.V. Chandrashekar, Anjana Chandrashekar for the
    Respondent.
H
   C. KESHAVAMURTHY v. H.K. ABDUL ZABBAR                    431


    The Judgment of the Court was delivered by:                    A

     H.L. GOKHALE, J. 1 Heard Mr. R.S. Hegde, learned
counsel in support of this petition and Mr. G.V. Chandrashekhar,
learned counsel appearing for the respondent.

    2. Leave granted.                                              B

    3. Both the counsel have made their submissions.

     4. The facts giving rise to this criminal appeal are as
follows
                                                                   c
     The respondent had issued four cheques to the appellant,
which had bounced. Out of the five cheques, a cheque dated
31st July, 2003, was issued for an amount of' 1,36,000/-, and
three other cheques dated 10th August, 2003, 15th AugL1st,
2003 and 18th August, 2003, respectively were for a sum of '       D
One lakh each. Since those cheques got bounced, the appellant
filed a Complaint bearing No.2857 of 2003, in the Court of
Judicial Magistrate, First Class-II, Davangere, in the State of
Karnataka, under Section 138 of the Negotiable Instruments
Act, 1881. The case of the appellant is that since these           E
cheques were dishonoured, an appropriate order under the law
was necessary.

     5. The defence of the respondent was that there was an
agreement of sale between the parties, and that the
                                                                   F
Complainant was a businessman dealing in lands, and it was
in that transaction that the respondent had issued some
cheques earlier, but since transaction did not fructify, he had
issued a notice dated 28th July, 2003, not to clear those
cheques. However, this defence could not be accepted for the       G
simple reason that all the cheques, which had bounced were
issued subsequent to the said Notice dated 28th July, 2003.
Therefore, no more justification was required for allowing the
Complaint. The defence raised by the respondent could not be
accepted and, therefore, the Learned Magistrate considered
                                                                   H
    432      SUPREME COURT REPORTS                 [2013] 8 S.C.R.


A the factual, as well as legal position and allowed the Complaint
  filed by the appellant herein.

       6. The respondent being aggrieved therefrom filed a
  Criminal Appeal bearing No.51 of 2005, before the Additional
8 Sessions Judge, Fast Track Court-II, Davangere, The learned
  Judge framed necessary points for consideration, namely,
  whether the impugned judgment of conviction recorded by
  JMFC-11, Davangere, could not be sustained under law and
  whether the punishment was in any way disproportionate. The
C learned Judge decided both those points in the negative, but
  passed an order whereby he partly allowed the appeal. The
  conviction recorded by the learned JMFC-11 Court, Davangere,
  was confirmed, but the sentence was modified by him as
  follows:

D         "The Accused/Appellant for the offence punishable under
          Section 138 of the Negotiable Instrument Act shall undergo
          simple imprisonment three months and pay fine of
          Rs.5,000/-. In default to pay such fine he shall undergo
          simple imprisonment for a further period of three months.
E
          The Accused/Appellant shall pay to the Complainant/
          Respondent a sum of Rs.4,50,000/-(Four lakhs Fifty
          thousand) as compensation to the Complainant/
          Respondent. In default to pay such compensation he shall
          undergo simple imprisonment for a further period of six
F
          months. It was further directed that the Accused/Appellant
          shall pay the fine amount and also the compensation
          amount within 45 (forty five) days from this date and
          surrender before the J.M.F.C.-11 Court, Davangere, to
          undergo the sentence. In case of failure to do so, the
G         Learned Magistrate shall take steps to enforce the
          sentence."

      7. This judgment and order rendered by the Addi. Sessions
  Judge on 4th May, 2006, was carried by the respondent further
H in Criminal Revision Petition No.1295 of 2006. This time,
         C. KESHAVAMURTHY v. H.K. ABDUL ZABBAR                    433
                    [H.L. GOKHALE, J.]
     however, the respondent was successful, and the plea raised          A
     by the respondent based on the Notice dated 28th July, 2003,
..   was accepted by the learned Single Judge of the Karnataka
     High Court. The learned Single Judge referred to the judgment
     of a Bench of tWo Judges of this Court in Krishna Janardhan
     Bhat Vs. Dattatraya G.Hegde, reported in [2008(4)SCC 54],            B
     and stated that the burden is always on the Complainant to
     establish not only issuance of cheque, but existence of debt or
     legal liability. In the facts of this case, the learned Judge took
     the view that the respondent had raised an acceptable defence.
     He therefore, allowed the Revision and set aside the judgment        c
     rendered by the courts below. The accused respondent was
     acquitted of the.offence under Section 138 of the Negotiable
     Instruments Act, 1888, and the amount deposited in court was
     directed to be refunded.

            8. Being aggrieved by the judgment of the High Court          D
       dated 8th December, 2008, the present criminal appeal has
       been filed. Mr. R.S. Hegde, learned counsel for the appellant,
       submitted that the approach of the learned Judge was
       erroneous on facts, as well as on law. As noted above, though,
       the respondent had given some cheques earlier, and had             E
     · issued a Notice dated 28th July, 2003 not to encash those
       cheques, the respondent had issued the disputed cheques
       thereafter. Therefore, the defence taken by the respondent that
       he had issued a Notice not to clear those cheques was not
       tenable on facts, and there was no defence as to why those         F
       cheques should not have been put into Bank and cleared.

           9. Secondly, as far as the proposition canvased on the
      basis of the judgment in Krishna Janardhan Bhat (supra) is
      concerned, it must be noted that the same has been specifically     G
      held to be not a correct one in paragraph 26 of the judgment
      rendered by a three-Judge Bench in Rangappa vs. Sri Mohan,
      reported in [2010(11 )SCC 441 ]. The judgment clearly held that
      the presumption under Section 139 of the Negotiable
      Instruments Act, 1881, includes the presumption of the
                                                                          H
    434     SUPREME COURT REPORTS                  [2013] 8 S.C.R.


A existence at a legally entorceable debt or liability. That
  presumption is required to be honoured, and if it is not so done,
  the entire basis of making these provisions will be lost.
  Therefore, it has been held that it is for the accused to explain
  his case and defend it once the fact of cheque bouncing is
B prima facie established. The burden is on him to disprove the
  allegations once a prima facie case is made out by the
  Complainant.
        10. Mr. G.V. Chandrashekar, learned counsel for the
  respondent, on the other hand, submitted that in the facts of this
C case, there was an agreement between the parties. He
  contended that although it is true that the agreement was not
  produced, but the fact of it was not disputed by the appellant
  himself. That being so, since the agreement was not being
  acted upon, the cheques were not expected to be cleared. He,
D therefore, submitted that the order of the High Court was
  justified on the facts of the particular case.
       11. We have noted the submissions of both the counsel.
  As noted earlier, it has clearly come on record that disputed
E cheques were given subsequent to the Notice not to clear the
  earlier cheques. There was no explanation as to why the
  subsequent cheques could not have been cleared. The
  agreement on the basis of which the submission was made
  was not produced in the courts below. That being so, on facts
  there was no error on the part of the learned Magistrate, as well
F as the learned Addi. Sessions Judge, in the view that they have
  taken. As far as the legal position is concerned, in our view,
  that has been settled adequately in Rangappa's case(supra),
  which has specifically explained the observations in Krishna
  Janardhan Bhat (supra).
G
       12. This being the position, we allow this appeal, set aside
  the order passed by the learned Judge of Karnataka High Court
  and restore the order passed by the Additional Sessions Judge.
  The parties will bear their own costs.
H K.K.T                                           Appeal allowed.