2004 (7) TMI 701 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the cheque (Ex.P1) was issued for the discharge of a legally enforceable debt.
2. The applicability of the presumption under Section 139 of the Negotiable Instruments Act.
3. Evaluation of evidence and burden of proof on the complainant and the accused.
4. Consistency and credibility of the complainant's claims and evidence.

Detailed Analysis:

1. Whether the cheque (Ex.P1) was issued for the discharge of a legally enforceable debt:
The appellant's counsel argued that the lower court erred in concluding that Ex.P1 cheque was not issued for the discharge of a legally enforceable debt. The trial court held that the initial burden is on the complainant to establish that the cheque was issued for the discharge of a legally enforceable debt, and only then does the burden shift to the accused to prove otherwise. The complainant's evidence was found inconsistent and lacking credibility, particularly in light of the accused's letter to the bank dated 6-7-1996, stating that a signed blank cheque was missing and requesting a stop payment. This letter predated the issuance of Ex.P1, raising doubts about the complainant's version of events.

2. The applicability of the presumption under Section 139 of the Negotiable Instruments Act:
The appellant's counsel contended that the presumption under Section 139 of the Negotiable Instruments Act should apply, citing authoritative pronouncements from the apex Court in Hiten P. Dalal and K.N. Beena. These cases establish that the court must presume the cheque was issued for discharging a debt or liability unless the contrary is proved by the accused. However, the court found that the complainant did not provide sufficient factual basis to raise such a presumption, as required under Section 139. The evidence presented did not inspire confidence, and thus, the presumption could not be invoked.

3. Evaluation of evidence and burden of proof on the complainant and the accused:
The court emphasized that the initial burden lies with the complainant to prove that the cheque was issued for a legally enforceable debt. The complainant's evidence, including the testimony of P.W.1 and P.W.3, was inconsistent and contradictory. The complainant failed to provide any documentary evidence, such as account books or income tax returns, to substantiate the claim of a debt. The accused's letter to the bank and the inconsistent statements from the complainant further weakened the case. The court concluded that the complainant did not discharge the initial burden of proof, and thus, the burden did not shift to the accused.

4. Consistency and credibility of the complainant's claims and evidence:
The court scrutinized the complainant's claims and found several inconsistencies. P.W.1's testimony about the dealings and the issuance of the cheque was contradictory. The complainant's statement in the legal notice (Ex.P4) did not specify the purpose of the debt, and during cross-examination, P.W.1 admitted that the cheque was filled by a third party. The court noted that the cheque was filled with a different ink than the signature, raising further doubts. Additionally, the accused's explanation of professional rivalry and the missing cheque letter (Ex.D1) provided a plausible defense. The court found that the factual basis for raising the presumption under Section 139 was not established, and the complainant's evidence did not inspire confidence.

Conclusion:
The court concluded that the complainant failed to establish the initial burden of proving that the cheque was issued for a legally enforceable debt. The inconsistencies in the complainant's evidence and the accused's plausible defense led the court to dismiss the appeal. The judgment emphasized that the mere existence of a cheque does not automatically invoke the presumption under Section 139; the complainant must provide a credible factual basis for such a presumption. The criminal appeal was accordingly dismissed.