2007 (12) TMI 541 - HC - Indian Laws

Summary

Issues involved:
The appeal against conviction under Section 138 of Negotiable Instruments Act, validity of notice issued by the complainant, defense taken by the appellant, legal liability of the appellant towards loan, punishment awarded to the appellant.

Conviction under Section 138 of the Act:
The appellant was convicted under Section 138 of the Negotiable Instruments Act based on the dishonour of cheques issued by him in favor of the complainant. Despite receiving a notice under Section 138, the appellant failed to discharge his liability. The trial court concluded that the cheques were issued by the appellant to settle his legal liability, which was not fulfilled, leading to the establishment of the offense under Section 138.

Validity of Notice and Defense Taken:
The appellant challenged the validity of the notice issued by the complainant, arguing that it was addressed to him individually, not as the proprietor of the firm. However, the court held that a proprietorship firm is not a legal entity, and notices can be served to the proprietor in his individual capacity. The defense taken by the appellant regarding the settlement of the loan and return of cheques was not substantiated with evidence, as no receipts or agreements were produced in court.

Legal Liability towards Loan:
The appellant admitted to taking a loan from the complainant, which was duly recorded. Despite claiming to have settled the loan with valid receipts, no documentary evidence was presented in court to support this claim. The absence of proper accounting or receipts to prove repayment of the loan weakened the appellant's defense and supported the complainant's case of non-payment despite dishonour of the cheques.

Punishment Awarded:
The appellant appealed for a reduction in the harshness of the punishment due to personal circumstances, including being the sole breadwinner for a family with a disabled son. Considering these factors, the court modified the sentence, reducing the penalty amount and directing the appellant to pay a revised sum to the complainant and the state fund. Failure to comply with the payment within the specified time would result in a 3-month imprisonment sentence for the appellant.