2019 (4) TMI 1984 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - accused has failed to rebut the presumption - statutory presumption under Sections 118 and 139 of Negotiable Instruments Act ignored - HELD THAT - The presumption under Section 139 of Negotiable Instruments Act is a rebuttal presumption and such rebuttal need not be beyond any reasonable doubt even preponderance of probability is sufficient. When the facts of the case is looked upon whether the drawer of the cheque has rebutted the presumption with any degree of probability it is found that except the reply notice and his oral evidence there is no material to indicate that he and the complainant were in long association and he had trusted the complainant to the extent of leaving his belongings at his house including signed cheque leaves. When the accused has initially denied the signature in the cheque he should have at least placed some material to substantiate his defence - As far as the loss of cheque leaves it is the case of the complainant that after 2011 election he and the complainant were fallen out. If it is so the cheques should have been taken away by the complainant before the year 2011 whereas the cheque is dated 01.10.2012. Therefore from May 2011 i.e. the general election till October 2012 the accused has not given any police complaint or directed the bank to stop the payment. Therefore both the defence taken by the complainant is only an afterthought and mere denial. Considering the length of time taken for disposal of this matter and the nature of the transaction and relationship between the complainant and the accused this Court is of the view that the sentence imposed on the respondent is liable to be modified - the period of imprisonment imposed by the trial Court is modified from one year Simple Imprisonment to two months Simple Imprisonment. The compensation amount stands unaltered - Appeal allowed.

Summary

Issues:
1. Dispute over a loan and post-dated cheque issuance.
2. Conviction under Section 138 of Negotiable Instruments Act.
3. Appeal based on rebuttal of presumption under Sections 118 and 139.
4. Legal interpretation of cheque issuance and liability under Section 138.

Analysis:
1. The appellant claimed that the respondent borrowed a sum and issued a post-dated cheque as security, but it bounced due to insufficient funds. A statutory notice was sent under Section 138 of the Negotiable Instruments Act.

2. The Trial Court convicted the respondent based on the prima facie burden of proof by the complainant. The accused failed to rebut the presumption, leading to a sentence of 1-year imprisonment and compensation. The accused appealed to the II Additional Sessions Court, which acquitted him.

3. The revision petitioner argued that the Lower Appellate Court ignored the statutory presumption under Sections 118 and 139. The accused's denial and changing theories were questioned, with emphasis on the importance of proving the debt beyond reasonable doubt.

4. The legal counsel for the respondent contended that the complaint was not maintainable under Section 138. The defense raised doubts about the issuance and misuse of the cheque, challenging the complainant's credibility and financial capacity.

5. The High Court analyzed the rebuttal presumption under Section 139, emphasizing the need for the accused to substantiate his defense. The court found the accused's actions and explanations lacking credibility, citing relevant Supreme Court judgments.

6. Ultimately, the High Court allowed the appeal, setting aside the Lower Appellate Court's judgment. The sentence was modified due to the prolonged legal process, but the compensation amount remained unchanged. The accused was directed to serve the remaining sentence, with provisions for set off under Section 428 IPC.