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2006 (7) TMI 733 - HC - Indian LawsDishonour Of Cheque - Offence punishable u/s 138 of the Negotiable Instruments Act - Non-compliance of the notices - Presumption u/s 27 of the General Clauses Act - conviction of the accused - HELD THAT - In this case, the notice was sent by registered post to the correct address of the accused and the same is therefore deemed to have been served on the accused in terms of Section 27 of the General Clauses Act, 1897. The presumption available u/s 27 cannot be rebutted either by way of mere suggestion or by mere denial in the statement u/s 313 of the Code. The courts below have rightly concluded that the notice was duly served on the accused. Admittedly, the complainant and the accused had received a notice dated 8.10.2003, from the said Punjab National Bank, calling upon them to clear the amount due on the loan borrowed by the accused and to which the complainant was one of the guarantors. It is not the case of the accused that he had enough money with him to repay the said loan, if at all the complainant had approached him, after receipt of the said notice. The accused in fact has not spelt out in his said 313 statement as to how the three cheques given by him as security to the complainant were to be used. It has been submitted on behalf of the accused that the said three cheques were given to the complainant so that in case the Bank filed a suit against the complainant and the complainant was compelled to make the payment towards the said sum due to the said Punjab National Bank, the said cheques would give security to the complainant. I am still at pains not to understand as to how the said arrangement, was to work. The learned Additional Sessions Judge has noted that the balance amount in the account of the accused was 238.34. If the balance amount of the accused in the account never exceeded a sum of ₹ 245/-, one fails to understand as to what sort of security the accused had given to the complainant by way of the said cheques. The learned acquitting J.M.F.C. has proceeded to examine the case of the complainant as if the complainant had no presumptions in his favour. She might have been right in case the law did not create the three sets of presumptions which have been created. This is a case, as already noted, where the complainant had discharged his initial burden that he had advanced to the accused a sum of ₹ 1,70,000/- and in payment of the same, the accused had given the said three cheques. In my view, considering the facts of the cases, the learned acquitting J.M.F.C. was certainly not justified in acquitting the accused u/s 138 of the Act. On the other hand, the conviction of the accused by the convicting J.M.F.C. and as upheld by the learned Additional Sessions Judge in Criminal Appeal, could not be faulted. Both the said Courts have exhaustively dealt with the case of the complainant viz-a-viz the defence taken by the accused and has come to the conclusion that the case of the complainant was proved beyond reasonable doubt against the accused. As a result, there is no merit in the Criminal Revision Application and, therefore, the same is hereby dismissed. As regards Criminal Appeal, for the very reasons discussed herein above, the acquittal of the accused u/s 138 of the Act, cannot be sustained. The Judgment and Order dated 06.04.2005 of the learned J.M.F.C. in C.C, therefore, deserves to be set aside and consequently the accused is hereby convicted u/s 138 of the Act for failing to pay the amount due to the complainant under the said cheque of ₹ 70,000/- dated 1.12.2003. At the time of hearing on the point of sentence on behalf of the accused, the sentence imposed by the convicting Magistrate has been brought to my notice. In the said case, for default in payment of the amount due on the cheque of ₹ 1,00,000/-, the learned J.M.F.C., was pleased to sentence the accused to undergo S.I. for two months and to pay a compensation of ₹ 1,00,000/-, and in default ordered the accused to undergo six month S.I. With a view not to have disparity in the sentence, I hereby sentence the accused u/s 138 of the Act, to undergo S.I. of 45 days and to pay compensation of ₹ 70,000/ - in default to undergo S.I. of four months. The sum of ₹ 50,000/- deposited by the accused before the trial Court pursuant to Order dated 13.04.2006, shall be paid to the complainant, to be adjusted from the compensation ordered to be paid. By consent, the accused is given time of two weeks either to surrender or pay the amount due.
Issues Involved:
1. Dishonour of Cheques 2. Validity of Notice 3. Legally Enforceable Debt 4. Presumption under Negotiable Instruments Act 5. Sentencing Detailed Analysis: 1. Dishonour of Cheques: The subject matter of the dispute involves three cheques issued by the accused which were dishonoured. The cheques in question were: - Cheque No. 4605574 dated 28.11.2003 for Rs. 50,000/- - Cheque No. 4605575 dated 28.11.2003 for Rs. 50,000/- - Cheque No. 4605576 dated 01.12.2003 for Rs. 70,000/- The complainant claimed these cheques were issued as repayment for a loan of Rs. 1,70,000/- given to the accused in November 2003. The accused contended that the cheques were given as security. Notices were sent regarding the dishonoured cheques, and upon non-compliance, two complaints were filed. The first complaint led to the conviction of the accused, while the second resulted in acquittal. 2. Validity of Notice: The validity of the notice was contested. The complainant sent notices to the accused's address, which were returned as unclaimed. The court held that the notices were deemed served under Section 27 of the General Clauses Act, 1897, as they were sent to the correct address. The court noted that the accused did not provide a different address and was served with court summons at the same address. The presumption of service was upheld, and the court concluded that the notice was duly served. 3. Legally Enforceable Debt: The complainant's case was that a loan of Rs. 1,70,000/- was advanced to the accused, for which the cheques were issued. The accused claimed the cheques were given as security. The court observed that the complainant and the accused were close friends, which explained the lack of formal documentation for the loan. The court found the complainant's testimony credible and consistent, despite minor discrepancies. The complainant's failure to show the loan in income tax returns was not considered significant. 4. Presumption under Negotiable Instruments Act: The court emphasized the mandatory presumptions under Sections 138 and 139 of the Negotiable Instruments Act, 1881, which place the evidential burden on the accused to prove that the cheque was not issued towards the discharge of liability. The accused did not provide sufficient evidence to rebut this presumption. The court held that the complainant had discharged his initial burden by showing that the cheques were issued in repayment of a loan. 5. Sentencing: For the first complaint, the accused was sentenced to simple imprisonment for two months and ordered to pay compensation of Rs. 1,00,000/-. Upon default, the accused was to undergo six months of simple imprisonment. This conviction was upheld by the Additional Sessions Judge. For the second complaint, the court set aside the acquittal and convicted the accused under Section 138 of the Negotiable Instruments Act for failing to pay the amount due under the cheque of Rs. 70,000/-. The accused was sentenced to simple imprisonment for 45 days and ordered to pay compensation of Rs. 70,000/-, with a default sentence of four months of simple imprisonment. The court ensured no disparity in sentencing by aligning it with the previous conviction. Conclusion: The court dismissed the Criminal Revision Application No. 15/06, upholding the conviction and sentence for the first complaint. The court also allowed Criminal Appeal No. 60/05, setting aside the acquittal and convicting the accused for the second complaint. The accused was given two weeks to surrender or pay the amount due.
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