2018 (8) TMI 2048 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - demand notice was properly served or not - HELD THAT - This court finds that the ground on which the impugned judgment and order of acquittal has been structured is preposterous. Section 138(b) of the NI Act casts an obligation on the drawee of the cheque which is dishonoured that after receipt of the information he makes a demand for the payment of the said amount (the amount mentioned in the cheque) by giving a notice in writing to the drawer of the cheque within 30 days from the day of receipt of the information by him from the bank regarding the dishonour of the cheque for insufficiency of the fund etc. The accused-respondent has sought to prove the payment by aid of two chance witnesses and both of them came to the accused-respondent for purpose of taking money. One has claimed to receive 50, 000/- and another has claimed to have 2, 00, 000/-. It appears that they are very close to each other and they are too in a close business relation. The accused-respondent did not care to show on the date of payment from which source he got such huge amount. Whether he had collected from private sources or it was taken out from his account in any bank. Even there is no whisper in this respect. The attempt to rebut the presumption amenable to be drawn out what the complainant-appellant has proved is the foundation fact is apparently very robust but if the entire transaction is scrutinized with resilience it would surface that there is no reason that a prudent person should believe the opposite. This Court has also noticed that the accused-respondent has acted sometimes in a manner which cannot be stated to be bona fide. Even in the Court he has stated that he did not receive the notice but the record from the postal department has squarely established that notice was duly served. Even he did not make any attempt to bring someone from the postal department to demonstrate that the communication dated 23.02.2013 (Exhibit-B) is not based on delivery of the registered article. Even there is no infirmity in the admission of the communication received from the Postal Department. As such this Court does not have any other alternative but to observe that the accused-respondent has grossly failed to rebut the presumption under Section 139 read with Section 138 of the NI Act. The accused-respondent is liable to be convicted and is accordingly convicted under Section 138 of the NI Act - Appeal allowed.

Issues Involved:
1. Legality of the acquittal order.
2. Compliance with Section 138 of the Negotiable Instruments Act, 1881.
3. Presumption under Section 139 of the NI Act.
4. Validity of the demand notice.
5. Evidence of payment and discharge of liability.

Detailed Analysis:

Legality of the Acquittal Order:
The appeal challenges the acquittal order dated 27.05.2016 by the Addl. Chief Judicial Magistrate, West Tripura, Agartala. The court found that the acquittal was based on a "complete non-appreciation of material evidence" and that the reasons for acquittal were "completely in contrast to the provisions of law."

Compliance with Section 138 of the Negotiable Instruments Act, 1881:
The court emphasized the fundamental ingredients required to prove an offence under Section 138 of the NI Act:
1. Legally enforceable debt.
2. Cheque drawn in discharge of debt or liability.
3. Cheque returned due to insufficiency of funds.
The court found that these elements were satisfied, as the accused had admitted to issuing the cheques and the cheques were dishonoured due to insufficient funds.

Presumption under Section 139 of the NI Act:
The court discussed the presumption under Section 139, which states that "it shall be presumed, unless the contrary is proved, that the holder of the cheque received the cheque for the discharge, in whole or in part, of any debt or other liability." The court referred to the case of *Hiten P. Dalai vs. Bratindranath Banerjee* to emphasize that the burden of proof lies on the accused to rebut this presumption. The court found that the accused failed to rebut this presumption effectively.

Validity of the Demand Notice:
The trial court had acquitted the accused partly on the ground that the demand notice did not bear the complainant's signature. However, the High Court clarified that Section 138(b) allows the demand to be made through a lawyer as an authorized agent, and it is not necessary for the complainant himself to sign the demand notice. The court found that this interpretation would frustrate the legislative intent of Section 138.

Evidence of Payment and Discharge of Liability:
The accused claimed to have paid the consideration price in cash in two installments. However, the court found discrepancies in this claim:
1. The accused did not provide any receipt for the alleged cash payment of ?8,00,000.
2. The accused's witnesses were deemed unreliable as they were "chance witnesses" and their presence was considered fictional.
3. PW 2, who allegedly received ?1,00,000 as part of the consideration, testified that the amount was an advance for renting the earth cutter, not for the sale.

The court concluded that the accused failed to provide credible evidence to support his claim of having paid the consideration price in cash. The court found that the complainant had proved the legal liability and the issuance of cheques in discharge of that liability.

Judgment:
The High Court reversed the acquittal and convicted the accused under Section 138 of the NI Act. The accused was sentenced to pay a fine of ?10,00,000, failing which he would suffer simple imprisonment for two years. The amount was to be paid in the court of the Addl. CJM, West Tripura, Agartala, within two months from the date of the order. The appeal was allowed, and the lower court records were sent back forthwith.

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