2019 (10) TMI 1483 - SC - Indian Laws

Dishonor of Cheque - acquittal of accused - failure to prove the guilt of the Accused - rebuttal of statutory presumption - Section 138 of the N.I. Act - HELD THAT - Admittedly the parties had entered into an Agreement of Sale dated 28.02.2012. It is also an admitted fact that the Respondent-complainant had paid Rs. 2, 50, 000/- as an advance/earnest money to the Appellant-Accused as per the terms of the Agreement. As pointed out by the High Court the Appellant-Accused has not disputed his signature on the said cheque presented for clearance. Contention of the Appellant that the cheque issued in the name of the Firm named Synergy and Solution Incorporation was removed from his office table is not convincing nor the same is supported by any evidence - As pointed by the High Court in the statutory presumption Under Section 139 of N.I. Act the Appellant-Accused has not satisfactorily rebutted the statutory presumption. The High Court has directed the Appellant to deposit Rs. 5, 00, 000/- and also costs of Rs. 20, 000/- whereas the cheque amount is only Rs. 2, 50, 000/-. Though Section 138 of the N.I. Act enable the court to impose the higher amount than the cheque amount however considering the facts and circumstances of the case we are of the view that the amount of Rs. 5, 00, 000/- ordered to be deposited is on the higher side and the same has to be reduced to Rs. 2, 80, 000/- plus costs of Rs. 20, 000/-. Appeal disposed off.

Summary

Issues:
1. Reversal of acquittal under Section 138 of the Negotiable Instruments Act, 1881 by the High Court.
2. Interpretation of evidence regarding the issuance of a cheque from a firm's account.
3. Application of statutory presumption under Section 139 of the N.I. Act.
4. Assessment of the fine amount imposed by the High Court.

Analysis:
1. The appeal stemmed from the High Court's decision to reverse the acquittal of the Appellant under Section 138 of the Negotiable Instruments Act, 1881. The case revolved around an Agreement of Sale between the parties, where the Appellant agreed to sell a property to the Respondent. The Appellant issued a cheque for the earnest money, which was later dishonored due to "Account Closed." The Trial Court acquitted the Appellant, citing lack of evidence linking him to the firm's account. However, the High Court reversed the acquittal, emphasizing the statutory presumption under Section 139 of the N.I. Act and the Appellant's failure to rebut it effectively.

2. The Trial Court had acquitted the Appellant on the grounds that the cheque was issued from a firm's account, not directly in his name. However, the High Court noted that the Appellant did not dispute his signature on the cheque and failed to provide substantial evidence to support his claim that the cheque was removed from his office table. The High Court highlighted the statutory presumption favoring the holder of the cheque, shifting the burden to the Accused to disprove it. This analysis led to the reversal of the Trial Court's decision and the Appellant's conviction under Section 138 of the N.I. Act.

3. The High Court's decision was influenced by the application of Section 139 of the N.I. Act, which creates a statutory presumption in favor of the holder of the cheque. The burden lies on the Accused to rebut this presumption effectively. In this case, the High Court found that the evidence presented was sufficient to establish that the cheque was issued to discharge a legally enforceable debt, justifying the conviction under Section 138 of the N.I. Act. The Appellant's failure to counter this statutory presumption played a crucial role in the final judgment.

4. Regarding the fine amount imposed by the High Court, the Supreme Court acknowledged the discretion granted under Section 138 of the N.I. Act to impose an amount higher than the cheque's value. However, after assessing the circumstances of the case, the Supreme Court deemed the imposed fine of Rs. 5,00,000 to be excessive. Consequently, the fine was reduced to Rs. 2,80,000, along with the costs of Rs. 20,000. The remaining amount was directed to be disbursed to the Respondent-complainant, with the balance to be returned to the Appellant-Accused, including any accrued interest.

In conclusion, the Supreme Court upheld the High Court's decision to convict the Appellant under Section 138 of the N.I. Act, emphasizing the importance of statutory presumptions and burden of proof in such cases. The fine amount imposed was adjusted by the Supreme Court to align with the circumstances of the case, ensuring a fair outcome for both parties involved.