2020 (9) TMI 108 - HC - Indian Laws

Dishonor of cheque - whether the petitioner/accused in the present case has succeeded to rebut the presumption arising in favour of the respondent/complainant in terms of Section 118 read with Section 139 of the Negotiable Instruments Act? HELD THAT - From the evidence and materials adduced by the parties it is manifest that the petitioner has not disputed the issuance of cheque in question and the signature found therein. As such the presumption lies in favour of the respondent that the cheque in question was issued by the petitioner for legally enforceable liability. In such circumstances the petitioner has to rebut the same through preponderance of probability whereas the oral evidence adduced by him would only disclose the fact that there were money transactions between the two. Though he replied to the legal notice issued by the respondent the contents of the same were not substantiated by any oral or documentary evidence. Further nothing has been elicited from the cross examination of P.W.1. That apart the petitioner has not subjected himself to witness box which is fatal to his case. In the considered opinion of this Court a mere denial of the averments made by the respondent is not sufficient for rebutting the presumptions arising in his favour and it is for the petitioner to demonstrate that there exists preponderance of probabilities that the cheque in question was not issued towards discharge of any legally enforceable debt/liability but the petitioner has failed to do so. On the other hand the respondent has proved his case that the petitioner committed the offence under Section 138 of the Negotiable Instruments Act - Hence the trial Court has rightly convicted the petitioner for the same and the same was also affirmed by the Appellate Court. Criminal Revision Case stands dismissed.

Summary

Issues Involved:
1. Legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act.
2. Presumptions under Sections 118 and 139 of the Negotiable Instruments Act.
3. Rebuttal of presumptions by the accused.
4. Evidence and burden of proof.

Detailed Analysis:

1. Legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act:
The petitioner was convicted for an offence under Section 138 of the Negotiable Instruments Act for issuing a cheque of Rs. 15,00,000/- which was dishonoured due to insufficient funds. The trial court sentenced him to one year of simple imprisonment and to pay the cheque amount as compensation under Section 357(3) Cr.P.C. This conviction was upheld by the appellate court, leading to the petitioner filing the present Criminal Revision Case.

2. Presumptions under Sections 118 and 139 of the Negotiable Instruments Act:
The court examined Sections 118 and 139 of the Negotiable Instruments Act, which deal with presumptions in favor of the holder of the cheque. Section 118 presumes that every negotiable instrument was made for consideration, while Section 139 presumes that the holder of a cheque received it for the discharge of any debt or other liability. These presumptions are rebuttable.

3. Rebuttal of presumptions by the accused:
The petitioner argued that the cheque was issued as security for a previous business transaction and not for a legally enforceable debt. He claimed that he had repaid the earlier loan, but the respondent did not return the cheques and misused them for filing the complaint. The court noted that the petitioner did not provide sufficient evidence to rebut the presumption of a legally enforceable debt. The petitioner’s denial and the evidence provided were insufficient to shift the burden of proof back to the complainant.

4. Evidence and burden of proof:
The court emphasized that the petitioner did not dispute the issuance of the cheque or the signature. Therefore, the presumption was in favor of the respondent that the cheque was issued for a legally enforceable liability. The petitioner needed to rebut this presumption through a preponderance of probability, which he failed to do. The oral evidence provided by the petitioner only indicated money transactions between the parties but did not substantiate his claims. The petitioner’s failure to subject himself to cross-examination was also noted as detrimental to his case. The court concluded that the respondent had successfully proved the petitioner’s guilt under Section 138 of the Negotiable Instruments Act.

Conclusion:
The court dismissed the Criminal Revision Case, affirming the judgments of the lower courts. It directed the trial court to secure the petitioner and commit him to prison to serve the remaining sentence. The court also allowed for the possibility of compounding the offence under Section 147 of the Negotiable Instruments Act if the parties reached an agreement. Any amount deposited by the accused was to be disbursed to the complainant or his legal heirs. The registry was instructed to transmit the original records to the respective courts.