2007 (8) TMI 814 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the statutory notice u/s 138 of the Negotiable Instruments Act.
2. Whether the complainant was the payee of the cheque.
3. Proof of the advancement of the loan.
4. Failure of the accused to rebut the presumption u/s 139 of the Act.
5. Sentencing of the accused.

Summary:

1. Validity of the Statutory Notice:
The learned Magistrate concluded that the notice was vague and did not appraise the accused of the actual debt or liability. However, the High Court found that the notice dated 9-9-2005 clearly stated the amount owed, the cheque details, and the demand for payment within fifteen days, failing which a criminal case u/s 138 of the Negotiable Instruments Act would be filed. The High Court held that the notice was sufficient to convey the necessary information to the accused.

2. Whether the Complainant was the Payee:
The Magistrate concluded that the complainant was not the payee as the cheque was issued in the name of "Pavel Hemant Gracias" instead of "Hemant Pavel Gracias." The High Court disagreed, stating that the interchanging of the first and middle name did not make the complainant a different individual. The bank did not consider the names to represent different individuals, and the cheque was dishonored due to insufficient funds, not because of the name discrepancy. The High Court held that the complainant was indeed the payee as contemplated by Clause (a) of Section 142 of the Act.

3. Proof of the Advancement of the Loan:
The complainant admitted that he did not mention the date or mode of payment of the Rs. 4,00,000/- loan in his complaint. The High Court noted that the burden of proving the non-existence of debt or liability was on the accused, as per M.M.T.C. Ltd. v. Medchl Chemicals and Pharma(P) Ltd. The accused failed to provide evidence to rebut the presumption of debt or liability.

4. Failure of the Accused to Rebut the Presumption:
The accused claimed that a blank cheque was given to the complainant with a promise of a loan of Rs. 1,00,000/-, which was never advanced. The High Court found this claim improbable, noting that the accused did not react to the statutory notice or take any action against the complainant for misusing the cheque. The High Court held that the accused failed to rebut the presumption u/s 139 of the Act.

5. Sentencing of the Accused:
The High Court set aside the acquittal and held the accused guilty u/s 138 of the Act. Considering the circumstances, the accused was sentenced to undergo simple imprisonment for four months and to pay a compensation of Rs. 4.60 lakhs, failing which he would undergo further simple imprisonment for six months. The accused was directed to surrender before the trial court within four weeks to undergo the sentence.