2015 (6) TMI 1131 - HC - Indian Laws

Guilty under Section 138 of the Negotiable Instruments Act - proof of legally enforceable debt or liability - Held that - There is a vast difference between proof of execution of the promissory note and the proof of the signature of the executant in the document. Law requires not the proof of signature alone, but the proof of execution of the document. Here in this case, though the signatures have been admitted by the accused, that will not automatically go to prove the execution of the promissory note. Therefore, this argument of the learned counsel for the respondent is only liable to be rejected. The learned counsel for the petitioner would submit that if once the execution of the promissory note is not proved and the payment of loan is not proved, then the entire case of the complainant should collapse. I am in full agreement with the same. Mere issuance of the cheque without there being any legally enforceable debt or liability would not make out any offence under Section 138 of the Act, even though the cheque is dishonoured for want of sufficient funds. In this case, the complainant has failed to prove that the cheque in question was issued as against any legally enforceable debt. In this case, assuming that the defence taken by the accused, on the face of the transaction between Rajaraman and the accused, may not be true, even then the complainant has to fail in the case, because he has failed to prove the legally enforceable debt on the part of the accused. In view of the same, inclined to allow this revision and set aside the conviction and sentence imposed by the trial Court, which was confirmed by the lower appellate Court.Criminal Revision Petition is allowed and the conviction and sentence imposed on the petitioners are set aside and the petitioners are acquitted.

Summary

Issues involved:
1. Conviction and sentencing under Section 138 of the Negotiable Instruments Act.
2. Dispute regarding the issuance of a cheque and promissory note.
3. Examination of evidence and legal arguments presented by both parties.

Detailed Analysis:
1. The petitioners were accused in a case under Section 138 of the Negotiable Instruments Act. They were convicted and sentenced by the trial court and the appellate court upheld the decision. The petitioners challenged this conviction and sentence through a revision before the High Court.
2. The respondent alleged that the accused borrowed money and issued a cheque that was dishonored. The respondent presented evidence including the promissory note, cheque, legal notices, and witness testimony. The accused claimed the cheque was not issued to the respondent but to another party. They also disputed the execution of the promissory note.
3. The defense argued that the promissory note was not proved adequately as the attestor was not examined. They also questioned the evidence regarding the execution of the promissory note and the legally enforceable debt. The respondent contended that the debt was proven, and the accused's defense was an afterthought.
4. The High Court analyzed the evidence and legal arguments. It noted discrepancies in the proof of the promissory note's execution and the debt. The court emphasized the requirement to prove the execution of the promissory note and the existence of a legally enforceable debt for a conviction under Section 138.
5. The court also considered the exchange of notices between the accused and another party, suggesting a possible motive for the complaint. It highlighted the importance of proving a legally enforceable debt for convicting under Section 138. Ultimately, the court found the complainant failed to establish the debt, leading to the acquittal of the petitioners.

In conclusion, the High Court allowed the revision petition, set aside the conviction and sentence, and acquitted the petitioners. It also ordered the refund of a deposited sum. The judgment focused on the crucial elements of proving a legally enforceable debt and the execution of the promissory note for a successful prosecution under Section 138 of the Negotiable Instruments Act.