2015 (6) TMI 1249 - HC - Indian Laws

Dishonor of Cheque - discharge of a legally enforceable debt / liability or not - section 138 of NI Act - HELD THAT - In the present case, the first respondent has admitted the signature on the cheque. The defence is that it was given as a security and not against any legally enforceable liability of the nature as stated by the appellant. The learned Magistrate has considered the evidence led by the parties, in order to see whether the presumption under Section 139 of the Act stands rebutted from paragraph 48 onwards of the judgment. It has been found that the first respondent has shown on preponderance of probability that payment of cheque drawn on ICICI Bank was discontinued in the year 2007. The first respondent had come with a specific case that the accounts were settled on 23/06/2008 when the outstanding was Rs. 1,10,928/- and the reconciliation statement is produced at exhibit 68/c. Although the learned Magistrate had found on comparing of the signature that the statement exhibit 68/c bears the signature of the representative of the appellant, which is comparable to the invoices produced at exhibit 7/c, however, has not based her finding on the reconciliation statement. In my considered view, the defence set up by the first respondent at the very inception, when he issued the reply to the notice on 31/12/2009, appears to be credible and probable. The appellant had failed to establish on the basis of acceptable evidence that on 31/03/2009, an amount of Rs. 2,92,212/- was due and outstanding against the first respondent. The finding recorded by the learned Magistrate is a plausible view, recorded on appreciation of oral and documentary evidence on record and it is not shown that the view taken by the learned Magistrate is either perverse or is an impossible view. Appeal dismissed.

Summary

Issues Involved:
1. Legally enforceable debt/liability under Section 138 of the N.I. Act, 1881.
2. Rebuttal of statutory presumption under Section 139 of the N.I. Act.
3. Evaluation of evidence and the credibility of accounts.
4. Scope and ambit of appellate court powers in an appeal against acquittal.

Detailed Analysis:

1. Legally Enforceable Debt/Liability under Section 138 of the N.I. Act, 1881
The appellant/complainant challenged the acquittal of the first respondent by the Judicial Magistrate, First Class, Margao, who was acquitted from an offence punishable under Section 138 of the N.I. Act, 1881. The appellant supplied soft drinks and packaged drinking water to the first respondent, a retailer, and claimed that as of 31/03/2009, the first respondent owed Rs. 2,92,212/-. A cheque issued by the first respondent for this amount was dishonored due to "payment stopped by drawer". The appellant issued a notice and subsequently filed a complaint.

2. Rebuttal of Statutory Presumption under Section 139 of the N.I. Act
The learned Magistrate framed a solitary point regarding whether the appellant proved that the first respondent issued the cheque in discharge of a legally enforceable debt/liability and whether the cheque was dishonored. The Magistrate concluded in the negative, leading to the dismissal of the complaint. The appellant argued that the first respondent's defense was inconsistent and that the statutory presumption in favor of the appellant was not rebutted. The first respondent contended that the cheque was issued as security for additional empties during peak seasons and not for outstanding dues. The Magistrate found that the first respondent successfully rebutted the presumption on the preponderance of probability, noting discrepancies in the appellant's evidence and the use of two different inks on the cheque.

3. Evaluation of Evidence and the Credibility of Accounts
The appellant's case was based on a running account maintained between the parties. The first respondent's defense included a reconciliation statement showing a different outstanding amount and claimed that payments were made by demand drafts after December 2007. The Magistrate noted that the appellant failed to produce the entire account from inception, which would have established the credibility of the account. The first respondent's defense was found credible, and the appellant's evidence was deemed insufficient to prove the outstanding amount of Rs. 2,92,212/- as of 31/03/2009.

4. Scope and Ambit of Appellate Court Powers in an Appeal Against Acquittal
The appellate court's powers in reviewing an acquittal are well-established. The court must bear in mind the double presumption of innocence in favor of the accused and should not interfere unless the trial court's view is perverse, based on misappreciation of evidence, or is an impossible view. The court found that the Magistrate's view was plausible and based on a proper appreciation of the evidence. The appellant's failure to produce comprehensive account records and the credibility of the first respondent's defense led to the conclusion that no interference was warranted.

Conclusion
The appeal was dismissed, affirming the trial court's judgment that the first respondent successfully rebutted the statutory presumption under Section 139 of the N.I. Act, and the appellant failed to prove the existence of a legally enforceable debt/liability. The appellate court upheld the Magistrate's findings, emphasizing the importance of credible evidence and the limited scope of interference in acquittal appeals.