2006 (11) TMI 719 - HC - Indian Laws

Summary

Issues Involved:
1. Acquittal of the accused u/s 138 of the Negotiable Instruments Act, 1881.
2. Material alteration of the cheque u/s 87 of the Negotiable Instruments Act.
3. Presumption of liability u/s 139 of the Negotiable Instruments Act.
4. Rebuttal of presumption by the accused.

Summary:

1. Acquittal of the accused u/s 138 of the Negotiable Instruments Act, 1881:
The complainant appealed against the acquittal of the accused by the learned J.M.F.C, Canacona, for an offense u/s 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused issued a cheque for Rs. 70,000/- which was dishonored due to insufficient funds. Despite a demand notice, the accused failed to repay the amount, leading to the filing of the complaint.

2. Material alteration of the cheque u/s 87 of the Negotiable Instruments Act:
The learned Magistrate concluded that the complainant had filled in the cheque without the accused's consent, constituting a material alteration, rendering the cheque void u/s 87 of the Act. However, the High Court found that the complainant's evidence showed he filled in the cheque with the accused's implied consent, and there was no material alteration.

3. Presumption of liability u/s 139 of the Negotiable Instruments Act:
The High Court emphasized that u/s 139, the Court "shall presume" the liability of the drawer unless the contrary is proved. The complainant was entitled to the presumption that the cheque was issued for discharge of a debt or liability. The accused's inconsistent statements and lack of evidence failed to rebut this presumption.

4. Rebuttal of presumption by the accused:
The accused claimed he had repaid the borrowed amount and the cheque was given as security. However, he failed to provide consistent or credible evidence to support this claim. The High Court noted that the accused's conflicting statements and lack of documentary evidence were insufficient to disprove the presumptions in favor of the complainant.

Conclusion:
The High Court set aside the acquittal, convicted the accused u/s 138 of the Act, and sentenced him to ten days of simple imprisonment and a compensation of Rs. 85,000/- to the complainant, with a default sentence of three months' simple imprisonment. The sentence was suspended for four weeks to allow the accused to appeal to the Supreme Court.