2019 (7) TMI 1982 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - discharge of legally enforceable debt or not - rebuttal of presumption u/s 139 of NI Act - HELD THAT - In the present case, signature on the cheque is not denied by the applicant, due to which presumption shall be raised that cheque was issued in discharge of any debt or liability, however, complainant claims that he advanced loan amount of Rs.2.20 Lacs to the applicant. According to the complainant, he is working a recovery agent in State Bank of India. In his cross-examination, he accepted that he got Rs. 5,000/- per month as salary and now he is getting Rs.8,000/- per month. He also admitted that he is not income-tax payee. Therefore, it is clear that at the time of transaction, the complainant was not having financial capacity to lending amount of Rs.2.20 Lacs to the applicant, hence, the complainant has failed to prove that he was having financial capacity to lend Rs. 2.20 lacs as loan amount to the applicant and the applicant/accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 and has raised probable defence. This Court is of the considered view that the courts' below have committed error in holding that the applicant has issued the cheque in question for discharge of any legal debt or liability - the impugned judgments passed by the Courts below are hereby set aside - revision petition allowed.

Summary

Issues:
1. Revision petition against judgment convicting for offence under Section 138 of Negotiable Instruments Act.
2. Applicant's challenge to presumption under Section 139 of the Act.
3. Applicant's defense based on complainant's financial capacity.
4. Evaluation of evidence and witness statements.
5. Decision on setting aside lower court judgments.

Analysis:
1. The revision petition was filed against the judgment convicting the applicant for an offence under Section 138 of the Negotiable Instruments Act. The applicant was sentenced to 3 months of simple imprisonment and ordered to pay compensation to the complainant.

2. The applicant challenged the presumption under Section 139 of the Act, claiming to have rebutted it successfully. The defense argued that the financial capacity of the complainant was questionable, and without proof of such capacity, convicting the applicant was erroneous.

3. The complainant alleged that the applicant issued a cheque in discharge of a debt, which was dishonored due to insufficient funds. The complainant, a recovery agent in a bank, claimed to have lent Rs. 2.20 Lacs to the applicant, but his financial capacity was questioned during the trial.

4. Witness statements were crucial in the case. The complainant testified about the loan and the dishonored cheque, while another witness confirmed the agreement but admitted no exchange of money in his presence. The court analyzed these statements to determine the credibility of the transaction.

5. The court, after considering the arguments and evidence, found that the lower courts erred in upholding the conviction. It was concluded that the complainant failed to prove his financial capacity to lend the amount, and the applicant successfully rebutted the presumption under Section 139. Therefore, the revision petition was allowed, setting aside the judgments and acquitting the applicant from the charge under Section 138 of the Act. Any compensation deposited by the applicant was ordered to be reimbursed.

This detailed analysis of the judgment highlights the key legal issues, arguments presented by both parties, evaluation of evidence, and the final decision of the court, providing a comprehensive understanding of the case.