Krishna Automation And Software Solution Private Limited & Ors vs Balaachandra S. Mule

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The petitioners, a private limited company and its two directors, challenged the concurrent findings of conviction by the trial court and the first appellate court for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complainant, a Class-I Civil Contractor, alleged that he had advanced Rs. 5 lakhs to the accused, who issued a cheque in discharge of the debt, which was subsequently dishonoured with the endorsement 'payment stopped by drawer'. All statutory requirements under Section 138(a) to (c) of the N.I. Act, including presentation of the cheque, service of demand notice, and filing of the complaint within the prescribed period, were duly complied with.

The High Court, relying on the Supreme Court judgments in APS Forex Services Pvt. Ltd. v. Shakti International Fashion Linkers (AIR 2020 SC 945) and P. Rasiya v. Abdul Nazer (2022 SCC OnLine SC 1131), reaffirmed that once the issuance of the cheque and the signature of the accused are admitted or proved, the statutory presumptions under Sections 118 and 139 of the N.I. Act stand raised in favour of the complainant. The burden then shifts to the accused to rebut these presumptions by adducing sufficient evidence to show that the cheque was not issued in discharge of any legally enforceable debt or liability.

The Court proceeded to examine whether the rebuttal evidence placed on record by the accused, including the testimony of DW1 and documents Exs. D1 to D12, was sufficient to displace the statutory presumption. The judgment was truncated in the extracted text; however, the Court's analysis centred on the specific defences raised by the accused in their reply to the demand notice and the adequacy of the defence evidence in displacing the presumption.

Catchwords: Negotiable Instruments Act · cheque dishonour · Section 138 NI Act · statutory presumption · Section 118 NI Act · Section 139 NI Act · payment stopped by drawer · legally enforceable debt · criminal revision · rebuttal evidence · demand notice · complaint within limitation