2021 (1) TMI 1181 - HC - Indian Laws

Dishonor of Cheque - defence taken by the accused is that the cheque was given in the year 2006 itself in respect of some other transaction, but it has been retained by the complainant and later it was mis-used by him - Section 138 of the Negotiable Instruments Act - HELD THAT - It is pertinent to note that though accused has taken a stand that cheque in question at Ex.P-1 was issued in the year 2006, to establish the same, what prevented the accused to summon the Cheque Issue Register from the Bank. So also, nothing prevented the accused to show that there was a previous transaction wherein he had tendered the cheque to the complainant by producing the counterfoil or the slips attached to the cheque book, wherein necessary details are entered by the accused during the usual course. When accused has taken the plea that the cheque came to be issued in the year 2006, it is for him to establish that cheque in fact was issued in the year 2006 and he has honoured the cheque which is preceding Ex.P-1 and which has been issued subsequent to Ex.P-1. But, no such evidence is placed by the accused in this regard. It is also pertinent to note that there was no reply sent by the accused to the statutory notice - In the absence of such evidence placed by the accused, this court is of the considered opinion that the finding recorded by the learned Magistrate which was upheld by the first Appellate Court that the accused has failed to establish his defence and failed to rebut the presumption available to the complainant u/s.139 of the Negotiable Instruments Act, is based on sound legal principles and does not suffer from any legal infirmity whatsoever. The finding recorded by the learned Magistrate and the first Appellate Court that accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act is not suffering from any patent defect or error of jurisdiction nor suffering from illegality. Admittedly, the Trial Court has taken into consideration the cheque while sentencing the accused. The learned Magistrate has convicted the accused for the offence punishable under Section 138 of the Negotiable Instruments Act and ordered to pay a fine of ₹ 1,98,000/- and out of that a sum of ₹ 1,93,000/- is ordered to pay as compensation which is the cheque amount and a sum of ₹ 5,000/- is ordered to pay as fine to the State with a default sentence - In the considered opinion of this court, when the accused has failed to establish his defence, the sentence passed by the learned Magistrate and confirmed by the first Appellate Court ordering only fine amount to the extent of the cheque amount as compensation is perfectly justified in the facts and circumstances of the case. Accordingly, there is no need for interference of the order of the learned Magistrate confirmed by the first Appellate Court. Revision petition dismissed.

Summary

Issues:
1. Conviction of the accused under Section 138 of the Negotiable Instruments Act.
2. Assessment of the sentence passed by the Trial Court and confirmed by the first Appellate Court.

Analysis:

Issue 1: Conviction of the accused under Section 138 of the Negotiable Instruments Act:
The case involved a complaint filed against the accused under Section 138 of the Negotiable Instruments Act, alleging that the accused borrowed a sum of Rupees Two lakhs from the complainant and issued a post-dated cheque that bounced due to insufficient funds. The accused denied the allegations and claimed that the cheque was from a previous transaction in 2006, which was misused by the complainant. The accused failed to provide substantial evidence to support this defense. The accused's failure to produce evidence such as the Cheque Issue Register or counterfoils to establish the issuance of the cheque in 2006 weakened his defense. The accused did not take steps to address the misuse of the cheque or demand its return, further undermining his claims. The court concluded that the accused did not substantiate his defense and failed to rebut the presumption under Section 139 of the Negotiable Instruments Act. Therefore, the judgments of both the Trial Court and the first Appellate Court, convicting the accused under Section 138, were upheld as legally sound and devoid of any jurisdictional errors.

Issue 2: Assessment of the sentence passed by the Trial Court and confirmed by the first Appellate Court:
The Trial Court convicted the accused under Section 138 and imposed a fine of &8377; 1,98,000, with &8377; 1,93,000 to be paid as compensation to the complainant and &8377; 5,000 as a fine to the State. Considering that the accused failed to prove his defense, the court found the sentence appropriate. The judgment of the Trial Court, confirmed by the first Appellate Court, ordering the accused to pay the compensation amount equivalent to the bounced cheque and a fine to the State was deemed justified based on the circumstances of the case. However, due to the ongoing COVID-19 pandemic, the court granted an extension until 31st May 2021 for the accused to make the payment. Consequently, the court dismissed the Revision Petition, with instructions to return the Trial Court and first Appellate Court records.

This detailed analysis covers the issues of the conviction under Section 138 of the Negotiable Instruments Act and the assessment of the sentence, providing a comprehensive summary of the legal judgment delivered by the Karnataka High Court.