No acquittal on the ground of discrepancy in cheque amount

Negotiable Instruments Act, 1881 - Section 18 -Discrepancy in the cheque - Section 138 - Offence Under -Acquittal - Appealed against -Amount stated differently in figures and words - Held, Discrepancy in the cheque, i.e., if the amount is stated differently in figures and words, the amount stated in words shall be the amount under taken or ordered to be paid - The discrepancy in the cheque will not be fatal to the case of the complainant - Further Held, When the respondent admits the issuance of the cheque, the Trial Court ought to have drawn presumption in respect of the offence committed by the respondent under Section 138 of the Negotiable Instruments Act.

 2009CriLJ1213, ILR 2008 KARNATAKA 4361, 2009(1)KarLJ481, 2008(4)KCCR2414, 2012(1)RCR(Civil)909, 2012(1)RCR(Criminal)579

IN THE HIGH COURT OF KARNATAKA

Criminal Appeal No. 144/2005

Decided On: 25.07.2008

Appellants: Sri N. Hasainar
Vs.
Respondent: Sri M. Hasainar

1.The appellant-complainant has filed this appeal challenging the judgment and order of acquittal dated 31-12-2004 passed by the Add. Civil Judge [Jr Dvn] and JMFC, Puttur, D.K., in C.C. No. 469/2002 acquitting the respondent for the offence punishable under Section 138 of N.I. Act.

2. Heard the arguments of the learned Counsel for both parties and perused the records, the point that arises for my consideration is "Whether the order of acquittal passed by the trial court is incorrect, illegal, perverse and capricious?"

3. It is an undisputed fact that the respondent issued the cheque-Ex. P.1, to the appellant towards repayment of loan amount borrowed by him from the appellant. The said cheque-Ex. P.1, came to be dishonoured on account of insufficient funds when presented for encashment. It is also an admitted fact that in the cheque-Ex. P.1 the amount in figures is mentioned as Rs. 75,000/-, whereas in words it is written as 'Rupees Seventy Thousand Only'. The appellant got issued the demand notice through his advocate demanding the cheque amount as Rs. 75,000/- but inspite of service of said notice the respondent failed to pay the cheque amount, hence the appellant filed the complaint. At this stage it is necessary to make it clear that merely because there is discrepancy in the cheque-Ex. P.1 and there is difference in amount mentioned in words and figure, the cheque-Ex. P.1 cannot be termed as invalid, in this regard Section 18 of N.I Act provides as follows:

Where Amount is Stated Differently in Figures and Words: If the amount undertaken or ordered to be paid is stated differently in figures and in words, the amount stated in words shall be the amount undertaken or ordered to be paid.

4. However the trial court acquitted the respondent holding that the notice sent by the appellant is not in conformity with Section 138(b) of N.I Act and that the amount mentioned in the notice is not correct and thus held that the appellant has not complied with the mandatory provisions of the Section 138of N.I. Act to convict the respondent for the said offence. In this regard the counsel for the appellant had relied on a decision rendered by this Court in case of Devi Tyres v. Nawab Jan AIR 2001 KAR. 2154 reported in wherein it is held as follows:

[E] Notice of demand mentioning amount of Rs. 18,500/- to be paid by accused whereas subject matter of cheque was Rs. 16,250/- Divergence of two figures, held, not fatal to the prosecution.

From the reading of the above decided law it is clear that the notice issued by the appellant demanding the cheque amount of Rs. 75,000/- wherein fact under the cheque-Ex. R1 the respondent is liable to pay only Rs. 70,000/-, will not invalidate the notice issued by the appellant and the same will not be fatal to the case of the appellant-complainant.

5. In the instant case, the appellant-complainant has examined himself before the trial court and deposed to the effect that the respondent issued the cheque-Ex. P.1 towards legally recoverable debt and under Section 118 and 139 of N.I. Act a presumption is to be drawn in favour of the appellant-complainant that the respondent issued the said cheque towards repayment of any legally recoverable debt or other liability and it is for the respondent to rebut the said presumption, but in the instant case the respondent failed to enter witness box before the trial court and failed to lead any evidence, the defence taken by the respondent that there is no legally recoverable debt under the cheque-Ex. P.1, cannot be believed unless the same is corroborated with evidence, mere denial of the case of the appellant-complainant will not constitute rebuttal of the evidence of the appellant-complainant, the respondent had failed to prove before the Court that as on the date of dishonour of the cheque in question, he had sufficient amount in his account and that the cheque has been dishonoured for the reason other than want of sufficient funds. Thus it cannot be held that the respondent had successfully rebutted the presumption available in favour of the appellant-complainant under the Act.

6. However the trial court failed to draw presumption in favour of the appellant-complainant and wrongly acquitted the respondent for the offence punishable under Section 138 of N.I. Act holding that the appellant-complainant has not proved his capacity to lend such amount to the respondent, but the trial court failed to note that when the respondent admits the issuance of the cheque, the court ought to have drawn presumption in favour of appellant under the N.I. Act and it is for the respondent-accused to disprove the same. The trial court had discussed much about the capacity of the appellant to lend money in its judgment, which is not warranted in the facts and circumstances of the case. Further the trial court also wrongly held that there is no compliance of the mandatory provisions of Section 138(b) of the N.I. Act, however in view of law laid down in case of Devi Tyres v. Nawab Jan cited supra it is clear there is valid compliance of mandatory provisions of the Act. The trial court on a technical ground has dismissed the complaint, without proper appreciation of the evidence and had failed to consider the basic intent behind enactment of the N.I. Act, wrongly interpreted the provision of law and if such an interpretation is allowed to continue, would defeat the basic intention behind enactment of the act, which should not be allowed.

7. For the foregoing reasons and the discussions this appeal is allowed. The judgment and order of acquittal passed by the trial court is hereby set aside. The respondent is convicted for the offence punishable under Section 138 of N.I Act and is sentenced to pay fine of Rs. 80,000/-, in default of payment of fine the respondent shall under go S.I for 3 months.

8 On deposit of fine amount the entire fine amount be released in favour of the appellant-complainant as compensation.