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2020 (1) TMI 1 - HC - Indian LawsDishonor of cheque - rebuttal of presumption required to be drawn under Section 139 of the NI Act - shortcomings in the evidence of the complainant found - As per the rule of the company, signature of the Chairman and Director are required. Whereas, the cheque in question contained only the signature of accused No.3 - non-production of documents (referred by them during cross-examination) and which are though admitted by the complainant during cross-examination. HELD THAT - The trial Court held that transaction of sale of the material is not proved by the complainant. I have also gone through the examination-in-chief and cross-examination of the complainant s witness. The accused has opened out his defence while cross-examining the complainant s witness. On this background, to show genuineness of the said transaction, he could have examined any witness or produce any documentary evidence. Unfortunately, it has not happened. If goods are sold and delivered through truck, lots of documentary evidence comes into existence in a usual course. So also various persons are involved in the said process. So, why complainant has not examined and produced any documentary evidence - Any explanation has not been offered before the trial Court and before this Court also. Such kind of evidence is not important when the accused pleads that signature on the cheque was taken by applying force. This is not the defence which usually the Court come across - there are no reason to discard with the inferences drawn by the trial Court. Not producing documents - HELD THAT - Neither accused nor the complainant produces documents. Accused justifies their act of non-production due to admission given during cross-examination. Whereas, complainant pleads that the accused believe on those documents, they shall produce it. When none of them have produced documents, Court can only draw inferences about existence of notice, visit and agreement. Court will be handicapped in reading contents of documents. So, issue is merely by admitting those facts, whether any onus shifts on the complainant. To certain extent, it is true. But, onus on complainant to produce those documents on one hand and onus on accused to produce them, if compared together primary onus is certainly on the accused. It does not extent to reading contents of documents. Rebuttal of presumption - HELD THAT - Simple denial of liability and denying the case of complainant does not amount to rebuttal of presumption - In this case the accused on one hand disputes issuance of cheque voluntarily and on other hand pointed out lacunae, loopholes and shortcomings in the evidence of complainant. First part of defence is not accepted. But, accused certainly succeeds in bringing on record the lacunae - the conclusion of the trial Court that the accused is successful in rebutting the presumption is agreed upon. Reason for dishonor of cheque - HELD THAT - Cheque is dishonoured due to insufficient funds. The accused through bank witness ought to have brought on record the reasons for not mentioning in the memo as cheque is incomplete They ought to have brought on record the practice of bank while scrutinizing the cheque. They ought to have brought on record why cheque was not dishonoured for reason cheque is incomplete . Accused lost this opportunity even though they examined bank witness. Hence, we have to hold that cheque was returned for the reason funds insufficient . Trial Court has not drawn any conclusion. It was wrongly held that the complainant ought to have brought on record earlier cheques given to the complainant by accused. There are no reason to disagree with the conclusion drawn by the trial Court - No interference is warranted - Appeal stands dismissed.
Issues Involved:
1. Presumption in favor of the complainant under Section 139 of the Negotiable Instruments Act. 2. Rebuttal of the presumption by the accused. 3. Credibility of the defense without producing documents. 4. Appropriate action if the offense is proven. Issue-wise Detailed Analysis: I. Presumption in Favor of the Complainant under Section 139 of the Negotiable Instruments Act: The court examined whether the presumption under Section 139 of the N.I. Act, which favors the holder of the cheque, could be applied. Section 139 presumes that the cheque was issued for discharging a debt or liability. However, this presumption is rebuttable. The court emphasized the need to consider all presumptions under the N.I. Act together, including the proviso to Section 118(g), which addresses the burden on the holder in due course. II. Rebuttal of the Presumption by the Accused: The accused argued that the cheque was not issued voluntarily but under duress, claiming that the accused No.3 was forced to sign the cheque at gunpoint. The trial court found shortcomings in the complainant's evidence, such as differences in signatures and inconsistencies in the sales documents. The court noted that the accused could rebut the presumption by making their defense probable, which they did by pointing out these lacunae. The court concluded that the accused successfully rebutted the presumption required under Section 139 of the N.I. Act. III. Credibility of the Defense without Producing Documents: The court addressed the issue of whether the defense could be believed without producing the documents referred to during cross-examination. The trial court accepted the accused's defense as probable, considering the admissions made by the complainant's witness during cross-examination. The court noted that while the primary duty to produce documents was on the accused, the complainant also had a duty to produce relevant documents to support their case. The court found that the accused's defense was credible despite not producing all the documents. IV. Appropriate Action if the Offense is Proven: The court discussed the implications if the offense was proven, particularly focusing on the reasons for the dishonor of the cheque. The cheque was dishonored due to insufficient funds, and the court found that the accused failed to prove that the cheque was incomplete due to a lack of required signatures. The court also addressed the issue of receipt of notice, finding that the notice was effectively served as the returned envelopes indicated refusal to accept, which amounts to acceptance. Conclusion: The court upheld the trial court's findings, concluding that the accused successfully rebutted the presumption under Section 139 of the N.I. Act. The court found no reason to interfere with the trial court's judgment, resulting in the dismissal of the appeal. The parties were ordered to bear their own costs.
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