2010 (3) TMI 1260 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the cheque was issued for the discharge of a legally enforceable debt or liability.
2. Whether the statutory presumptions u/s 118 and 139 of the N.I. Act were rebutted by the accused.
3. Whether the trial court's judgment of acquittal was justified.

Summary:

Issue 1: Legally Enforceable Debt or Liability
The appellant challenged the judgment dated 06th April 2009, where the respondent was acquitted of the offence u/s 138 of the N.I. Act. The trial court held that the complainant failed to prove that the cheque for Rs. 1,55,000/- was issued for the discharge of a legally enforceable debt or liability. The cheque was dishonored due to "funds insufficient," and despite a demand notice, the accused did not pay the amount.

Issue 2: Statutory Presumptions u/s 118 and 139 of the N.I. Act
The complainant argued that statutory presumptions u/s 118 and 139 of the N.I. Act should aid him unless rebutted by the accused. The complainant provided evidence of the agreement to sell and the issuance of the cheque as a refund plus compensation. The trial court's approach was deemed perverse as it failed to consider these statutory presumptions properly. The accused's defense that the cheque was forcibly obtained was not substantiated with evidence.

Issue 3: Justification of Trial Court's Judgment
The High Court found that the trial court misled itself by not properly considering the statutory presumptions in favor of the complainant. The trial court's logic that the accused's denial of the agreement to sell and his signature meant it was not proved was flawed. The High Court emphasized that Section 138 aims to punish unscrupulous drawers of cheques and that the trial magistrate must prevent miscarriage of justice. The High Court reversed the acquittal, finding the accused guilty u/s 138 of the N.I. Act.

Conclusion:
The High Court sentenced the accused to imprisonment till rising of the court and to pay compensation of Rs. 1,55,000/- plus Rs. 10,000/- as prosecution costs within two months. In default, the accused would undergo simple imprisonment for six months. The trial court was directed to execute the order, and if compensation was not paid, it would be recovered as a fine. The appeal was allowed accordingly.