2021 (2) TMI 1261 - HC - Indian Laws

Dishonor of Cheque - rebuttal of presumption - acquittal of accused - burden to proof - HELD THAT - It appears that the learned Magistrate had failed to appreciate the evidence and the presumption under Section 139 of the Negotiable Instruments Act, that the onus lies upon the accused person, who issued the cheques. Therefore, a person who has undisputedly issued the cheques cannot shirk the responsibility when they are dishonoured unless he proves that such cheques were not for discharge of debt or other liability in whole or in part in favour of the payee. The Ld. Magistrate has misplaced the burden of proof. The complaint case has been lodged within the statutory period laid down in Section 142(b) of the Negotiable Instruments Act. As such, the decision arrived at, acquitting the appellant is not legally tenable. The impugned judgement and order is therefore, set aside. The case is remitted to the 8th Court of Metropolitan Magistrate, Calcutta for summoning the complainant and the accused respondent and after giving them an opportunity of hearing pass a fresh judgement in accordance with law on the evidence already on record, preferably within three months from receipt of this order. The appeal is accordingly allowed.

Summary

Issues:
Appeal against acquittal under Sections 138/141 of Negotiable Instruments Act.

Analysis:
The judgment involves an appeal against the acquittal of the accused company and its director under Sections 138/141 of the Negotiable Instruments Act. The appellant, who is the complainant, challenged the order of acquittal passed by the Metropolitan Magistrate, alleging that the Magistrate failed to appreciate the evidence properly. The case revolved around two cheques issued by the accused company through its director to the appellant as part payment of dues, which were subsequently dishonored due to insufficient funds. The appellant issued a demand notice, but no payment was made, leading to the filing of the case within the statutory period. Various witnesses were examined, and documents were submitted to establish the liability of the accused. The accused director admitted the dishonor of the cheques but declared himself innocent during examination under Section 313 of the Code of Criminal Procedure.

The Magistrate acquitted the accused, stating that the complainant failed to prove the liability of the accused company towards him and establish the connection between the companies involved. The appellant contended that the Magistrate erred in misplacing the burden of proof and not considering the presumption under Section 139 of the Negotiable Instruments Act, which places the onus on the accused to prove non-liability when cheques are dishonored. The High Court, after reviewing the evidence and legal provisions, found that the Magistrate's decision was legally untenable. The Court held that the burden of proof lay on the accused, and the complaint was filed within the statutory period, warranting a fresh judgment.

Consequently, the High Court set aside the impugned judgment and remitted the case back to the Metropolitan Magistrate for a fresh judgment in accordance with the law, emphasizing the importance of considering the burden of proof and statutory timelines. The appeal was allowed, and all pending applications were disposed of. The Lower Court was directed to summon the parties, provide them with an opportunity to be heard, and pass a fresh judgment preferably within three months from the receipt of the High Court's order. The Lower Court was instructed to comply with the directions, and certified copies of the order were to be provided to the parties upon request.