2023 (11) TMI 1116 - HC - Indian Laws

Dishonour of Cheque - validity of acquittal of accused - seeking reversal of conviction imposed - HELD THAT - The respondent did not refuse the case of the appellant in his chief examination and he took defence stating that the case was filed with other ulterior motive to deny payment of sales commission which was allegedly due to him. The respondent in his cross-examination has admitted that the purchase orders and other defence documents of the respondent did not contain any signatures which was not credible enough to prove that the respondent has no liability with the appellant. The respondent has admitted in his cross examination the modus operandi followed by Ex.P.5 to Ex.P.10 and Ex.P.18 to Ex.P.21 which are invoices and stock transfer challans - the defence raised by the respondent also fails to ground for the reasons discussed. Hence this Court has no hesitation to hold that in view of the discussion in the preceding paragraphs the appellant is entitled for statutory presumption and in the absence of any positive evidence much less any evidence to rebut the statutory presumption by the accused the charge under Section 138 of N.I. Act stands proved and hence the reasoning rendered by the lower Appellate Court stands vacated and the same is set aside - this Court holds that the appellant has produced sufficient material in support of the charge and the respondent has not let in any positive evidence to rebut the presumption. Consequently the conviction and sentence passed by the trial Court is hereby restored. Appeal allowed.

Summary

Issues Involved:
The appeal against the order of acquittal in a criminal case involving dishonor of a cheque under Section 138 of the Negotiable Instruments Act.

Summary of Judgment:

Issue 1: Conviction under Section 138 of the Negotiable Instruments Act

The appellant filed a criminal appeal against the order of acquittal in a case where a cheque issued by the respondent was dishonored. The appellant, a manufacturer of drip irrigation system materials, supplied materials to the respondent on credit basis. The respondent failed to remit payment for the supplied materials, resulting in the appellant filing a complaint. The trial court and the lower appellate court held that the appellant was entitled to the statutory presumption under Sections 108 and 139 of the Negotiable Instruments Act. The respondent failed to rebut this presumption with cogent evidence, leading to the restoration of the conviction and sentence by the High Court.

Issue 2: Failure to Rebut Presumption and Defense Raised

The respondent did not reply to the legal notice in time and failed to provide evidence to rebut the statutory presumption under the Negotiable Instruments Act. The defense raised by the respondent, stating that the cheque was issued for security purposes, was not accepted by the courts. The respondent's admission regarding the modus operandi of transactions and lack of evidence to support the security purpose defense led to the rejection of the respondent's contentions.

Issue 3: Legal Principles and Precedents

The High Court referred to legal precedents emphasizing the requirement for the accused to provide credible evidence to rebut the presumption under Section 139 of the Negotiable Instruments Act. Mere raising doubts without substantial evidence is insufficient to discharge the burden of proof. The court cited relevant judgments to support the decision that a probable defense without positive evidence is inadequate to rebut the statutory presumption.

Conclusion:

The High Court allowed the criminal appeal, setting aside the order of acquittal and restoring the conviction and sentence imposed by the trial court. The compensation awarded under Section 357 of the Cr.P.C. for the cheque amount was also restored. The judgment highlighted the importance of providing credible evidence to rebut statutory presumptions in cases involving dishonor of cheques under the Negotiable Instruments Act.