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2020 (10) TMI 1175 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - offence punishable under Section 138 of the Negotiable Instruments Act - Whether the impugned order of conviction and sentence passed by the trial Court and confirmed by the First Appellate Court against the petitioner for the offence punishable under Section 138 of the Negotiable Instruments Act suffer any illegality, impropriety or incorrectness? HELD THAT - There cannot be any dispute that once the issuance of the cheque and signature of the accused on the cheque are admitted, the presumption under Section 139 of the Negotiable Instruments Act that the cheque was issued towards discharge of legally recoverable debt arises. Then the burden shifts to the accused to rebut the said presumption by acceptable evidence. The accused/DW.1 in his cross-examination has uneqivocally admitted that the notice - Ex.P3 was served on him. If Shivanna and the complainant colluded with each other to commit fraud on the accused and presented the cheque which contains huge amount, in the ordinary course at the first instance the accused should have replied Ex.P3 denying the contents or his liability. Thereby, there was a deemed admission of the contents of the notice. That circumstance went against the accused - Either by way of reply to the notice or in the cross-examination of PW.1, there was no denial of lending capacity of the complainant. Even in the evidence of the accused, there was no denial of the lending capacity. Therefore, the contention of the learned counsel for the petitioner regarding the lending capacity is apparently untenable. Considering the material on record and the judgment of the Hon'ble Supreme Court in RANGAPPA VERSUS SRI MOHAN 2010 (5) TMI 391 - SUPREME COURT regarding the presumption under Section 139 of the Negotiable Instruments Act, the Trial Court rightly rejected the defence of the accused and convicted him. Revision dismissed.
Issues involved:
Validity of conviction and sentence under Section 138 of the Negotiable Instruments Act. Analysis: 1. Presentation of Cheque and Notice: The complainant presented a cheque for realization, which was dishonored due to insufficient funds. Subsequently, a notice was issued to the accused informing him of the dishonor and demanding payment. The accused failed to respond or pay the amount, leading to the filing of a complaint under Section 138 of the NI Act. 2. Trial Court Proceedings: The Trial Court examined the parties and evidence, leading to the conviction of the accused under Section 138. The accused's defense regarding a loan transaction was considered, but the Court found that the accused failed to rebut the presumption that the cheque was issued towards the discharge of a legally recoverable debt. 3. Appeal and Defense: The accused challenged the conviction in the Sessions Court, which upheld the Trial Court's decision. The accused's defense centered around a tractor transaction involving his father-in-law, but the Court found discrepancies and lack of evidence to support his claims. 4. Presumption under Section 139: The Court emphasized the presumption under Section 139 of the NI Act, stating that once the issuance of the cheque and the accused's signature are admitted, the burden shifts to the accused to rebut this presumption with acceptable evidence. 5. Witnesses and Evidence: The accused failed to produce crucial witnesses, such as Ningegowda, to support his defense. The Court noted that the accused's failure to present key witnesses and provide substantial evidence worked against him. 6. Legal Precedents: The judgment referenced legal precedents, such as the case of Rangappa v/s Mohan, to emphasize the burden on the accused to rebut the presumption under Section 139. The Court reiterated that the accused must provide credible evidence to counter the presumption in favor of the complainant. 7. Dismissal of Revision Petition: Based on the evidence, legal principles, and precedents cited, the Court dismissed the revision petition, concluding that the accused failed to provide sufficient evidence to challenge the conviction and sentence under Section 138 of the NI Act. In summary, the judgment analyzed the validity of the conviction and sentence under Section 138 of the Negotiable Instruments Act, highlighting the importance of evidence, legal precedents, and the burden on the accused to rebut the presumption arising from the issuance of the cheque. The Court found the accused's defense lacking in credibility and dismissed the revision petition accordingly.
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