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2022 (3) TMI 1402 - HC - Indian Laws


Issues Involved:
1. Issuance and validity of the cheque.
2. Legally enforceable debt or liability.
3. Authorization to file the complaint and give evidence.
4. Rebuttal of presumption under Sections 118 & 139 of the Negotiable Instruments Act.
5. Admission of additional evidence under Section 391 of Cr.P.C.

Issue-wise Detailed Analysis:

1. Issuance and Validity of the Cheque:
The complainant, a Bank, presented a cheque for Rs.48,68,400/- drawn on the accused's account, which was returned with the endorsement "account closed." The accused admitted his signature on the cheque and that it belonged to his account. However, he contended that the cheque was issued as security for a loan taken in 2000, which was cleared in 2012, and alleged that the complainant misused the cheque.

2. Legally Enforceable Debt or Liability:
The trial court held that the loan was a term loan payable from 2014 to 2024 and had not become overdue when the cheque was presented. Therefore, it concluded that there was no legally enforceable debt at the time. The complainant argued that the accused defaulted on the loan repayment, making the debt legally recoverable. The appellate court found that the trial court's findings on the premature recall of the loan were unsustainable since it was not the accused's defense that the loan was not due.

3. Authorization to File the Complaint and Give Evidence:
The trial court acquitted the accused on the ground that the complainant failed to prove that PW.1 was authorized to file the complaint and give evidence. The complainant sought to produce additional evidence, including the Board's resolution authorizing PW.1, which was not presented earlier due to a bona fide error. The appellate court noted that the lack of authority could be rectified at the appellate stage if deemed necessary.

4. Rebuttal of Presumption under Sections 118 & 139 of the Negotiable Instruments Act:
The trial court acknowledged the presumption under Sections 118 and 139 of the Act that the cheque was issued for consideration and towards a legally recoverable debt. However, it held that the accused successfully rebutted this presumption. The appellate court found that the accused's defense of the cheque being misused was not substantiated, especially since a related criminal case against the complainant's officials was quashed as malafide and an abuse of process.

5. Admission of Additional Evidence under Section 391 of Cr.P.C.:
The appellate court allowed the complainant's application under Section 391 of Cr.P.C. to produce additional evidence, including the Board's resolution. It emphasized that the complainant, a public institution dealing with public money, should not be dismissed on technical grounds. The court remanded the matter to the trial court to record evidence regarding the additional documents and decide on the maintainability of the complaint based on proper authorization.

Conclusion:
The appellate court allowed I.A. No. 1/2020 and partly allowed the appeal. It held that the complainant proved the accused committed the offense under Section 138 of the Act. The trial court was directed to record evidence on the additional documents and decide the maintainability of the complaint for want of proper authorization. Based on this decision, the trial court would then determine the acquittal or conviction and sentence of the accused. The appeal was disposed of accordingly.

 

 

 

 

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