2014 (3) TMI 1214 - HC - Indian Laws

Dishonour of Cheque - discharge of legally enforceable debt or liability or not - cross-examination of witnesses - principles of natural justice - HELD THAT - Neither in the complaints nor in her depositions did the complainant gave details of the loan which she claims to have given, such as the exact amount of each loan, the date on which it was paid and the rate of interest agreed to be paid to her. There is no valid explanation for not giving all such details. Admittedly, the respondent before this Court is not the only person to whom loan is alleged to have been given by the complainant. Admittedly, the complainant had filed complaints under Section 138 of Negotiable Instruments Act against Smt. Gomti Dutta and Keshvi Dutta. She claims to have given loans to them. It would be difficult, in the facts and circumstances of the case, to believe that she kept on giving loan to several persons, despite not having enough fund with her, for this purpose. According to complainant, even her sisters had raised loan from a society for advancing money to her. It would be difficult to believe that the sisters of the complainant would have incurred liability towards a society, to extend a loan to the complainant, not for her personal need, but for lending that amount to a person who is stranger to them. Moreover, there is no explanation for not producing the aforesaid persons in the witness box. Though the case of the respondent is that the aforesaid diary bears the signature of the appellant/complainant Kajal, there is no evidence to prove the alleged signature of the complainant/appellant on the aforesaid document. In her cross-examination, the complainant/appellant has nowhere admitted that the aforesaid diary bears her signature. She only admitted that it was a diary which belongs to the father of the respondent who was engaged in the business of building material and property dealing. No handwriting expert was examined by the respondent to prove the alleged signatures of the complainant/appellant on the aforesaid document. Since, the respondent has failed to prove that the aforesaid document bears signature of the complainant/appellant, any reliance on it for the purpose of proving the alleged repayment would be wholly misplaced. Though the appellant/complainant has failed to prove that she had advanced loan to the extent of Rs.10.40 lakh, the evidence which has come on record clearly shows that she had advanced a loan of at least Rs.3.00 lakh to the respondent which he is yet to repay. Therefore, it cannot be said that the cheques which the respondent had issued to the complainant/appellant were wholly without any consideration. The provision of Section 3 of the Punjab Registration of Money Lenders Act, 1938 does not debar a money lender from instituting a complaint under Section 138 of the Negotiable Instruments Act, 1881, which is a remedy enforceable before a criminal court, and totally independent of a civil suit. The criminal liability is incurred only in case a cheque is issued in discharge of a debt or other liability, the said cheque is dishonoured for want of funds and the borrower fails to make payment of the amount of the cheque even after receipt of a notice from the lender. The respondent is convicted under Section 138 of the Negotiable Instruments Act, 1881, in all the complaints which are subject matter of these appeals. The learned counsel for the respondent states, on instructions from the father of the respondent who is present in the Court that if, the respondent is sentenced only to pay a fine of Rs.3.00 lakh, in aggregate in all the complaints which are subject matter of these appeals, the respondent undertakes to pay the said amount by way of three monthly instalments of Rs.1.00 lakh each - The respondent is sentenced to pay fine of Rs.3.00 lakh or to undergo RI for two (2) years in default. The aforesaid sentence is cumulative for all the complaints subject matter of these appeals. The aforesaid amount shall be paid to the complainant/appellant in three (3) monthly instalments of Rs.1.00 lakh each, falling due on 15.4.2014, 15.5.2014 15.6.2014. Appeal disposed off.

Summary

Issues:
1. Conviction under Section 138 of Negotiable Instruments Act based on dishonored cheques.
2. Appeal against conviction due to doubt regarding the existence of a legally enforceable debt or liability.
3. Lack of detailed evidence regarding the loans advanced by the complainant.
4. Discrepancies in the complainant's claims of loan amounts and sources.
5. Lack of proof of repayment by the respondent.
6. Allegations of the complainant being a money lender affecting the case.

Analysis:

1. The appellant/complainant alleged that the respondent/accused took loans totaling Rs 10,40,000 and issued cheques that were dishonored. The Trial Court convicted the respondent under Section 138 of the Negotiable Instruments Act based on this evidence.

2. The respondent appealed, arguing doubts about the enforceable debt or liability. The Additional Sessions Judge set aside the conviction due to uncertainty regarding the loan's existence, leading to the complainant's appeal before the High Court.

3. The complainant's case lacked specific details of the loans given, such as amounts, dates, and interest rates, which weakened her claim. The absence of comprehensive evidence raised questions about the loan transactions.

4. Discrepancies emerged during cross-examination, with the complainant admitting to borrowing money from others and failing to provide concrete evidence of the loans she claimed to have given. The respondent acknowledged receiving a loan but disputed the amount owed.

5. The respondent's defense relied on a diary allegedly showing repayment, but the lack of evidence confirming the complainant's signature on the document undermined this claim. The court found the respondent's repayment assertions unsubstantiated.

6. The respondent's argument labeling the complainant as a money lender did not negate her right to pursue legal action under Section 138 of the Negotiable Instruments Act. The court clarified that being a money lender did not preclude her from seeking redress for dishonored cheques.

7. Ultimately, the High Court overturned the lower court's decision, convicting the respondent under Section 138 of the Negotiable Instruments Act. The respondent was sentenced to pay a fine of Rs 3,00,000 or face imprisonment in default, with a payment plan set for installment payments.

This detailed analysis highlights the legal complexities surrounding the case, including issues of evidence, loan transactions, and the application of relevant laws.