2019 (2) TMI 547 - SC - Indian Laws

Dishonor of Cheque - insufficiency of funds - repayment of friendly loan - Sections 138 of the Negotiable Instruments Act. Whether a revisional Court can, in exercise of its discretionary jurisdiction, interfere with an order of conviction in the absence of any jurisdictional error or error of law? - Held that - It is well settled that in exercise of revisional jurisdiction under Section 482 of the Criminal Procedure Code, the High Court does not, in the absence of perversity, upset concurrent factual findings. It is not for the Revisional Court to re-analyse and re-interpret the evidence on record - As held by this Court in Southern Sales and Services and Others vs. Sauermilch Design and Handels GMBH 2008 (10) TMI 696 - SUPREME COURT OF INDIA , it is a well established principle of law that the Revisional Court will not interfere even if a wrong order is passed by a court having jurisdiction, in the absence of a jurisdictional error - The answer to the first question is therefore, in the negative. Whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, of a cheque duly drawn, having been issued in discharge of a debt or other liability, only because he is in a fiduciary relationship with the person who has drawn the cheque? - Held that - A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted - It is not the case of the respondent-accused that he either signed the cheque or parted with it under any threat or coercion. Nor is it the case of the respondent-accused that the unfilled signed cheque had been stolen. The existence of a fiduciary relationship between the payee of a cheque and its drawer, would not disentitle the payee to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, in the absence of evidence of exercise of undue influence or coercion - The second question is also answered in the negative. The High Court patently erred in holding that the burden was on the appellant-complainant to prove that he had advanced the loan and the blank signed cheque was given to him in repayment of the same. The finding of the High Court that the case of the appellant-complainant became highly doubtful or not beyond reasonable doubt is patently erroneous - appeals are allowed.

Summary

Issues Involved:
1. Whether the High Court was right in reversing the concurrent factual findings of the Trial Court and Appellate Court in exercise of its revisional jurisdiction.
2. Whether a revisional Court can interfere with an order of conviction in the absence of any jurisdictional error or error of law.
3. Whether the payee of a cheque is disentitled to the benefit of the presumption under Section 139 of the Negotiable Instruments Act, 1881, merely because of a fiduciary relationship with the drawer.

Detailed Analysis:

1. Reversal of Concurrent Factual Findings by High Court:
The Supreme Court scrutinized whether the High Court was justified in reversing the concurrent factual findings of the Trial Court and Appellate Court. Both lower courts found that the respondent-accused had issued a cheque for ?15 lakhs to the appellant-complainant in discharge of a debt or liability, which was dishonored due to insufficient funds. The High Court, however, acquitted the respondent-accused, citing a fiduciary relationship between the parties and doubting the complainant's claim of advancing a loan without formal documentation.

2. Revisional Court’s Interference with Conviction:
The Supreme Court reiterated that the revisional jurisdiction under Section 482 of the Criminal Procedure Code does not permit the High Court to upset concurrent factual findings in the absence of perversity. The Court emphasized that it is not the role of the Revisional Court to re-analyze or re-interpret the evidence on record. The Court cited precedents stating that even if a wrong order is passed by a court having jurisdiction, the Revisional Court should not interfere unless there is a jurisdictional error.

3. Presumption under Section 139 of the Negotiable Instruments Act:
The Supreme Court clarified that Section 139 of the Negotiable Instruments Act mandates a presumption that the holder of a cheque received it for the discharge of a debt or liability unless the contrary is proved. This presumption is rebuttable, but the onus of proof lies on the accused. The Court referenced several cases to underline that mere denial or rebuttal by the accused is insufficient; the accused must provide cogent evidence to prove the absence of debt or liability.

The Court observed that the High Court had misconstrued Section 139 by placing the burden of proof on the appellant-complainant rather than the respondent-accused. The Supreme Court noted that the existence of a fiduciary relationship does not negate the presumption under Section 139 unless there is evidence of undue influence or coercion.

Conclusion:
The Supreme Court concluded that the High Court had erred in its judgment by reversing the findings of the lower courts and misinterpreting the legal provisions under the Negotiable Instruments Act. The appeals were allowed, and the High Court’s judgment was set aside. The conviction of the respondent-accused under Section 138 was confirmed, but the sentence was modified to a fine of ?16 lakhs to be paid as compensation to the appellant-complainant, with a provision for imprisonment if the fine was not paid within eight weeks.