2021 (2) TMI 1258 - HC - Indian Laws

Dishonor of Cheque - funds insufficient - offence under Section 138 r/w 142 of the Negotiable Instruments Act - rebuttal of presumption - Whether the finding of the guilt of the accused for the offence under Section 138 of the Negotiable Instruments Act by the learned Judicial Magistrate, Fast Track Court No. II, based on the materials available on record is fair and proper? - HELD THAT - It is to be noted that in the cases filed for dishonour of cheques, the liability fastened on the holder of the cheque is not akin to the liability to prove a civil claim. It is sufficient if the complainant could show prima facie materials which would make his case probable. Moreover, when the drawer of the cheques does not dispute his signatures on the cheques, the initial presumption as contemplated under Sections 118 and 139 of the Negotiable Instruments Act would be in favour of the holder of the cheques. Though it is always open to the petitioner/accused to refute the initial presumption by way of producing rebuttal evidence, such rebuttal proof should be such a standard that it should tilt the preponderance of probability in his favour. In the case in hand, the petitioner/accused did not come to the box and subject himself for cross-examination with regard to the allegation he made about the short delivery of goods. There is also no explanation from the side of the petitioner as to why he did not elaborate on this aspect when he sent his reply notice. Moreover, the respondent/complainant has proved the liability of the petitioner not only through his invoices but also through accounts maintained by him. So in the above background of facts and evidence, the preponderance of probability is still found to be in favour of the respondent/complainant and the petitioner/accused did not refute the same by way of any strong rebuttal proof. Since the delivery of goods were made through several loads, it cannot be concluded that the respondent/complainant has not delivered the goods in full. The probability of the delivery of goods as found in Ex. P6 series is more probable in the light of the fact that the respective tax was paid fully by the complainant and the respective papers were also filed by the petitioner/accused to the Commercial Tax Department, in connection with the alleged transaction of goods. This Criminal Revision Case is dismissed.

Summary

Issues:
Challenge to judgment of learned I Additional Sessions Judge, Erode confirming judgment of Judicial Magistrate, Fast Track Court No. II, Erode. Dispute over outstanding sum in business transactions leading to issuance of dishonored cheques. Accusation under Section 138 of Negotiable Instruments Act. Appellate dismissal and subsequent revision case filing. Examination of evidence, accounts, and witness testimonies. Dispute over delivery of goods and liability for outstanding dues.

Analysis:

1. Background and Allegations: The case involves a private complaint regarding an outstanding sum of ?10,90,032 owed by the accused to the complainant in connection with business transactions. The accused issued two cheques to discharge the dues, but they were returned due to insufficient funds, leading to a complaint under Section 138 of the Negotiable Instruments Act.

2. Trial Proceedings: Witness testimonies and documents were presented during the trial. The trial Judge found the accused guilty under Section 138 and sentenced him to imprisonment and a fine. The accused's appeal was dismissed, prompting the filing of the current revision case challenging the judgments.

3. Arguments and Counter-Arguments: The defense claimed that goods were not delivered as per invoices, cheques were for security, and the accused was wrongly found guilty. The prosecution maintained that goods were delivered, accounts showed outstanding dues, and the accused failed to provide strong rebuttal evidence.

4. Court's Analysis: The Court examined the evidence, including invoices, accounts, and witness statements. It noted the purchases made by the accused, outstanding dues, and the sequence of events leading to the dishonored cheques. The Court emphasized the importance of prima facie evidence in cheque dishonor cases and the presumption in favor of the holder.

5. Decision and Rationale: The Court dismissed the revision case, confirming the lower courts' judgments. It found the prosecution's evidence more compelling, emphasizing the lack of strong rebuttal evidence from the accused. The Court highlighted that the burden of proof in cheque dishonor cases differs from civil claims and upheld the lower courts' assessment of the evidence.

6. Conclusion: The Court's decision upholds the guilt of the accused under Section 138 of the Negotiable Instruments Act based on the available evidence and the failure of the accused to provide sufficient rebuttal. The judgment underscores the importance of evidence and the burden of proof in cases of dishonored cheques, leading to the dismissal of the revision case.