2016 (4) TMI 1423 - HC - Indian Laws

Dishonor of Cheque - legality while assessing the evidence placed on record in regard to the rebuttal of presumption available under Section 118(a) and 139 of the N.I. Act - HELD THAT - Taking into consideration the entire evidence of PW-1 it can be said that the accused is able to probablise his defence that the cheque marked as Ex. P2 was not issued for availing Rs. 4.6 lakhs and that the same was issued as security for the said sum of Rs. 1.9 lakhs availed by her. Viewed from any angle both the Courts have not critically evaluated the evidence placed on record and they have committed serious illegality in appreciating the evidence placed on record - Both the Courts have attached too much of importance to the presumption available under Sections 118 and 139 of N.I. Act without looking to the categorical admission elicited from the mouth of PW-1. These important admissions could not have been so easily brushed aside by both the Courts. Absolute interference is called for and the judgment of conviction and sentence passed by the trial Court and affirmed by the First Appellate Court are to be set aside and consequently accused is acquitted for the offences alleged against her. The illegality so committed by both the Courts is writ large and hence revisional jurisdiction vested under Section 397 of Cr.P.C. is to be invoked. Revision petition is allowed.

Summary

Issues Involved:
1. Whether the trial Court and the Appellate Court committed serious illegality in assessing the evidence regarding the rebuttal of presumption under Sections 118(a) and 139 of the N.I. Act.
2. Whether any interference is called for by the High Court, and if so, to what extent.

Issue-wise Detailed Analysis:

1. Legality of Evidence Assessment by Trial and Appellate Courts:
The petitioner challenged the conviction and fine imposed by the trial court, which was affirmed by the appellate court, for the offence under Section 138 of the Negotiable Instruments Act (N.I. Act). The petitioner argued that the presumption under Sections 118 and 139 of the N.I. Act was effectively rebutted through cross-examination, proving that only Rs. 1.9 lakhs were received and repaid, not Rs. 4.6 lakhs as claimed by the complainant. The complainant, however, contended that the presumption was not effectively rebutted and that the accused failed to prove her defense.

2. High Court's Interference:
The High Court scrutinized the evidence and arguments, noting several inconsistencies in the complainant's testimony. The complainant admitted to knowing the accused well and acknowledged financial transactions, including the issuance of cheques. However, she failed to provide concrete evidence of having sufficient funds to lend Rs. 4.6 lakhs, such as bank statements or proof of pledging gold ornaments. The court found the complainant's explanations inconsistent and improbable, particularly regarding the source of the loan and the issuance of cheques.

Key Findings:
- The complainant's admission of receiving Rs. 1.9 lakhs from the accused and the issuance of multiple cheques totaling Rs. 1.33 lakhs supported the defense's claim.
- The complainant's inconsistent statements about her financial capacity and the source of the loan undermined her credibility.
- Both lower courts failed to critically evaluate these inconsistencies and relied too heavily on the statutory presumption under Sections 118 and 139 of the N.I. Act.

Conclusion:
The High Court concluded that the accused successfully rebutted the presumption under Sections 118 and 139 of the N.I. Act. The judgment of conviction and sentence by the trial court and its affirmation by the appellate court were set aside. The accused was acquitted of the charges, and any bail bonds executed were canceled. The petitioner was granted the liberty to recover any amount already withdrawn by the complainant in accordance with the law.