2016 (9) TMI 1653 - HC - Indian Laws

Dishonour of Cheque - legally enforceable debt or not - rebuttal of presumption or not - only ground that was taken in the appeal is that two cheques were handed over by the accused-complainant as security to secure the loan for which Section 138 of the N.I. Act cannot be attracted - HELD THAT - The basic principle of applying a precedent in the criminal jurisprudence is that the ratio that has been laid down by a particular judgment has to be first construed in the backdrop of its peculiar circumstances. If the facts and circumstances are identical and not subject to distinction then only the principle as laid can be applied. But there can be another way of looking at the precedent is that when the precedent interprets a provision having due regard to the scheme of the Act that can be imported for purpose of applying in the future cases - In this case the petitioner did not adduce any evidence and the complainant the respondent No. 1 herein has proved that he provided the loan much before the cheques were issued. On the face of such evidence it cannot be held that the cheques Exbt. 1 and 2 were issued for securing the loan. Moreover when the cheques are admitted by the petitioner issued the court is bound to presume under Section 139 read with Section 118 of the N.I. Act that the cheques were issued for discharging in whole or in part of any debt or other liability. The law has developed and now it is no more res integra that under Section 139 of the N.I. Act a statutory presumption which has a evidentiary value can be drawn. In M.S. Narayana Menon alias Mani vs. State of Kerala Anr. 2006 (7) TMI 576 - SUPREME COURT it has been held that once the accused is found to discharge his initial burden it shifts to the complainant. The petitioner being the accused did not discharge his initial burden in any way and as such there is no infirmity in the finding of conviction. Hence this court cannot called upon to interfere the impugned judgment - Petition dismissed.

Summary

Issues:
1. Challenge to the legality of the judgment dated 23.11.2015 in Criminal Appeal No. 03 of 2015 under Section 397(1) read with Section 401 of the Cr.P.C.
2. Interpretation of the purpose of cheques issued by the accused as security or for discharging the liability under Section 138 of the Negotiable Instruments Act, 1881.
3. Examination of evidence regarding the issuance of cheques for securing a loan and the legal implications under the N.I. Act.
4. Application of statutory presumption under Section 139 read with Section 118 of the N.I. Act in cases of dishonored cheques.

Analysis:

1. The petitioner challenged the judgment convicting him under Section 138 of the N.I. Act for dishonoring cheques issued to secure a loan. The appeal was dismissed based on the interpretation that the cheques were not issued as security but to discharge an existing liability, leading to the conviction.

2. The complainant's claim was that the accused handed over cheques as security for a loan taken earlier, while the court found that the cheques were issued to discharge the debt. The petitioner argued that the cheques were for securing the loan, not for liability discharge, citing legal precedents supporting such interpretations.

3. The evidence presented by the complainant regarding the purpose of the cheques was crucial. The court noted that the cheques were issued after the loan was taken, indicating a debt repayment intention rather than mere security. The complainant's testimony supported the view that the cheques were meant for debt discharge.

4. The application of statutory presumption under Section 139 read with Section 118 of the N.I. Act was pivotal. The court emphasized that the burden of proof shifts to the accused once the cheques are admitted, and the presumption is in favor of the cheques being issued for discharging a debt. The accused failed to rebut this presumption, leading to the dismissal of the revision petition.

In conclusion, the judgment upheld the conviction under Section 138 of the N.I. Act based on the interpretation of the purpose of the cheques as being for debt repayment rather than security. The application of statutory presumption and legal precedents supported the decision, leading to the dismissal of the revision petition.