Supreme Court Restores Conviction in Cheque Bounce Case, Overturns Karnataka High Court's Acquittal, Presumptions under Negotiable Instruments Act Reinforced; High Court's Revisional Jurisdiction Exceeded in Reappreciating Evidence
In a significant decision, the Supreme Court of India has restored the conviction of Thurubaiah under Section 138 of the Negotiable Instruments Act, 1881, reversing the Karnataka High Court's order that had acquitted him. The Supreme Court, comprising Justices B.V. Nagarathna and Ujjal Bhuyan, emphasized the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, which are mandatory and shift the burden of proof onto the accused.
The case originated from a complaint by Kuntegowda, who alleged that Thurubaiah had defaulted on a cheque of Rs. 4,50,000, issued for a loan. The cheque was dishonored due to insufficient funds, leading to the filing of a complaint under Section 138 of the Negotiable Instruments Act. The trial court convicted Thurubaiah, a decision upheld by the Sessions Court with a modified sentence. However, the High Court of Karnataka, exercising its revisional jurisdiction, acquitted Thurubaiah, questioning the financial capacity of Kuntegowda to lend the amount.
The Supreme Court criticized the High Court for acting beyond its revisional jurisdiction by reappreciating evidence and substituting the concurrent findings of the lower courts. The apex court highlighted that the High Court's role in revision is supervisory, intended to correct gross miscarriages of justice, not to act as an appellate body.
The judgment underscores the importance of statutory presumptions under the Negotiable Instruments Act, which mandate that once the execution of a cheque is admitted, it is presumed to be for consideration unless the accused can provide credible evidence to the contrary. The court found the High Court erred in dismissing the presumptions based on mere questioning of the complainant's financial capacity without substantial evidence.
This ruling reinforces the integrity and efficacy of banking operations and the negotiability of instruments, ensuring that cheques remain a reliable mode of payment. The decision also serves as a reminder of the limited scope of revisional jurisdiction, cautioning against its use as a substitute for appellate review.
Bottom Line:
Presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881, is statutory and mandatory, shifting the burden of proof upon the accused to rebut the same with cogent evidence.
Statutory provision(s):
Negotiable Instruments Act, 1881 Sections 118, 138, 139; Criminal Procedure Code, 1973 Section 397 (now Section 438 of Bharatiya Nagarik Suraksha Sanhita, 2023).
Kuntegowda v. Thurubaiah, (SC) : Law Finder Doc id # 2953687
