2023 (9) TMI 705 - HC - Indian Laws

Dishonour of Cheque - existence of legally recoverable debt or liability - non-reporting of giving of cheques in question as security for transaction of sale of plot - HELD THAT - Under Section 397 of the Cr.P.C the Court is vested with the power to call for and examine the record of any inferior Court for the purpose of satisfying itself as to legality and regularity of any proceedings or order made in a case. The object of this provision is to correct the patent defect or an error of jurisdiction or the perversity which has crept in the proceedings. The High Court in revision exercises supervisory jurisdiction of a restricted nature. It cannot re-appreciate the evidence as Second Appellate Court for the purposes of determining whether the concurrent finding of fact reached by the learned Magistrate and the learned Additional Sessions Judge was correct. The Supreme Court BHARAT BARREL DRUM MANUFACTURING COMPANY VERSUS AMIN CHAND PAYRELAL 1999 (2) TMI 627 - SUPREME COURT held that once execution of the promissory note is admitted the presumption under Section 118( a ) would arise that it is supported by consideration. The accused has failed to establish his defence even on preponderance of probability therefore there was no occasion to shift onus of proof on the complainant to establish existence of legally recoverable debt or liability. Manoj Kushwaha (PW-1) Hotam Singh (PW-2) and Amrit Lal Kushwaha (CW-1) also stated about availability of funds sufficient to advance the loan therefore considering the statutory presumption in favour of holder of cheque absence of documentary evidence to establish financial capacity of the complainant is immaterial. In opinion of this Court no patent illegality perversity or impropriety is made out in the concurrent finding of conviction by learned Trial Court and the First Appellate Court. The sentence imposed by learned trial Court and affirmed by the First Appellate Court is proper and appropriate. Consequently no interference in concurrent finding of conviction of petitioner for offence punishable under Section 138 of the Negotiable Instruments Act and sentence imposed is called for in exercise of revisional jurisdiction. Revision petition dismissed.

Summary

Issues Involved:
1. Legally recoverable debt or liability.
2. Misuse of cheques given as security.
3. Lack of documentary evidence supporting the loan.

Summary:

1. Legally Recoverable Debt or Liability:
The petitioner challenged the judgments of the trial court and the appellate court, arguing that both courts failed to consider the existence of a legally recoverable debt or liability in the absence of positive evidence. The petitioner contended that the complainant did not prove his financial capacity to extend a loan of Rs. 6,27,500/-. The High Court noted that under Section 397 of the Cr.P.C, it has limited supervisory jurisdiction and cannot re-appreciate evidence as a second appellate court. The Supreme Court's precedent in cases like Malkeet Singh Gill v. State of Chhattisgarh and others was cited to emphasize the restricted scope of interference in revision.

2. Misuse of Cheques Given as Security:
The petitioner argued that the cheques were given as security for purchasing a plot and were misused by the complainant despite full payment. The High Court observed that the presumption under Sections 118 and 139 of the Negotiable Instruments Act favors the holder of the cheque unless the contrary is proved. The testimony of witnesses and the admission of cheque execution by the accused supported the complainant's case. The court concluded that the accused failed to establish the probability of his defense and that the cheques were issued for consideration and discharge of debt or liability.

3. Lack of Documentary Evidence Supporting the Loan:
The petitioner argued that the complainant's story of advancing a loan was not supported by any documentary evidence, making the loan story doubtful. The High Court held that the accused failed to establish his defense even on the preponderance of probability, and thus, there was no occasion to shift the onus of proof to the complainant. The court noted that the absence of documentary evidence to establish the complainant's financial capacity was immaterial, given the statutory presumption in favor of the holder of the cheque.

Conclusion:
The High Court found no patent illegality, perversity, or impropriety in the concurrent findings of conviction by the trial court and the appellate court. The sentence imposed was deemed proper and appropriate. Consequently, the revision petition was dismissed for being devoid of merit.