SRI DATTATRAYA versus SHARANAPPA

Citation: [2024] 8 S.C.R. 121 · Decided: 07-08-2024 · Supreme Court of India · Bench: B.V. NAGARATHNA · Disposal: Dismissed

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Judgment (excerpt)

[2024] 8 S.C.R. 121 : 2024 INSC 586
Sri Dattatraya 
v. 
Sharanappa
(Criminal Appeal No. 3257 of 2024)
07 August 2024
[B.V. Nagarathna and Augustine George Masih,* JJ.]
Issue for Consideration
Whether the High Court had rightly affirmed the acquittal of the 
respondent in a complaint case moved for the offence punishable 
u/s. 138 of the Negotiable Instruments Act, 1881 by its judgment 
dated 03.03.2023.
Headnotes†
Negotiable Instruments Act, 1881 – ss.118, 138, 139 – 
Complainant-appellant case was that respondent had 
borrowed rupees two lakhs from him – Against the said loan 
the respondent issued a cheque, as a guarantee against 
repayment – Since the respondent failed to repay the loan 
despite repeated requests, the appellant presented the 
concerned cheque for encashment, as per the Bank Memo, 
the cheque was dishonoured on account of “insufficient  
funds” – A demand notice sent by the appellant – In reply 
to the demand notice, the respondent claimed that the 
accusations made by the appellant were false – Appellant filed 
a complaint case – The Trial Court adjudicated in favour of the  
respondent – The decision was affirmed by the High Court – 
Interference required or not:
Held: Applying the settled legal position to the present factual matrix, 
it is apparent that there existed a contradiction in the complaint 
moved by the appellant as against his cross-examination relatable 
to the time of presentation of the cheque by the respondent as per 
the statements of the appellant – This is to the effect that while the 
appellant claimed the cheque to have been issued at the time of 
advancing of the loan as a security, however, as per his statement 
during the cross-examination it was revealed that the same was 
presented when an alleged demand for repayment of alleged loan 
amount was raised before the respondent, after a period of six 
* Author
122
[2024] 8 S.C.R.
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months of advancement – Furthermore, there was no financial 
capacity or acknowledgement in his Income Tax Returns by the 
appellant to the effect of having advanced a loan to the respondent – 
Even further the appellant has not been able to showcase as to 
when the said loan was advanced in favour of the respondent 
nor has he been able to explain as to how a cheque issued by 
the respondent allegedly in favour of one M landed in the hands 
of the instant holder, that is, the appellant – The Trial Court had 
rightly observed that the appellant was not able to plead even a 
valid existence of a legally recoverable debt as the very issuance 
of cheque is dubious based on the fallacies and contradictions 
in the evidence adduced by the parties – Furthermore, the fact 
that the respondent had inscribed his signature on the agreement 
drawn on a white paper and not on a stamp paper as presented 
by the appellant, creates another set of doubt in the case – Since 
the accused has been able to cast a shadow of doubt on the case 
presented by the appellant, he has therefore successfully rebutted 
the presumption stipulated by Section 139 of the NI Act 1881 – The 
instant case pertains to challenge against concurrent findings of 
fact favouring the acquittal of the respondent, it is settled that this 
Court would ordinarily not interfere with such view considering the 
principle of liberty enshrined in Article 21 of the Constitution of India, 
unless perversity is blatantly forthcoming and there are compelling 
reasons – Thus, the present challenge to the aforesaid impugned 
judgment dated 03.03.2023 by the High Court is bereft of any merits 
and does not call for any interference. [Paras 27, 29, 31(ii), 33]
Negotiable Instruments Act, 1881 – Three essential conditions 
for invoking proceedings u/s.138:
Held: The NI Act 1881 enlists three essential conditions that ought 
to be fulfilled before the said provision of law can be invoked – 
Firstly, the cheque ought to have been presented within the period 
of its validity – Secondly, a demand of payment ought to have been 
made by the presenter of the cheque to the issuer, and lastly, the 
drawer ought to have had failed to pay the amount within a period 
of 15 days of the receipt of the demand. [Para 14]
Negotiable Instruments Act, 1881 – s.138 – Period of limitation:
Held: While referring to the period of limitation of one month of 
filing a complaint for the purpose of Section 138 of the NI Act 
1881, the same is to begin after the drawer of the cheque has 
[2024] 8 S.C.R. 
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