2016 (12) TMI 1906 - HC - Indian Laws

Dishonour of Cheque - acquittal of accused - mistakenly typing of the cheque number - discharge of debt/liability - HELD THAT - As far as the present case is concerned, in the complaint, the Appellant/Complainant, at paragraph 8 and 12 had mentioned the number of the cheque as '361868' dated 22.03.2013, but at paragraph 9 of the complaint, the cheque number was mentioned as '361838'. In fact, in Ex. R1 - Legal Notice dated 17.04.2013 (issued to the Respondent/Accused), the cheque number was mentioned as '361868' but at paragraph 5 of the said notice, the cheque that was deposited on 22.03.2013, described as '361838'. Even though incorrect mentioning of the Cheque number in Ex. R1 - Legal Notice dated 17.04.2013 is a mistake or ancillary or incidental one, since the transaction between the Appellant/Accused viz., supply of chickens, the evidence of P.W.1 indicates that the Respondent/Accused had issued the cheque in favour of the Appellant/Complainant towards security for the outstanding amount. At this stage, this Court aptly points out that if the cheques were issued not for discharge of any debt or liability, but they were issued by way of security, the Applicant could not be held liable under Section 138 of the Negotiable Instruments Act. An entry in an account is a self serving one as it is an admission by the maker thereof, in his favour. The crucial test would be whether the entries in a particular account are honest or otherwise. An account book is to be established by a person who had written it and if he is alive or by some other person who is competent to speak about its veracity/genuineness. It cannot be gainsaid that before an extract from 'Account Book' is admitted in evidence, it must be legally proved. In the instant case, even though the Appellant/Complainant, at paragraphs 8 12, in the complaint, had mentioned the cheque number as '361868' and mentioned the cheque number incorrectly as '361838' in Ex. P3 - Notice, this Court is of the considered view that there is no mist or cloud or shroud or any manner of simmering doubt in regard to the language employed in Section 138 of the Negotiable Instruments Act. Admittedly, notice will have to be read in entirety. In the present case, there was no correction notice communicated/issued on behalf of the Appellant/Complainant to the Respondent/Accused - the incorrect mentioning of the cheque in Ex. P3 - Notice is not fulfilling the requirement under Section 138(b) of the Negotiable Instruments Act. In as much as Ex. P3 - Notice is not in conformity with Ex. P1 - Cheque, as a logical corollary, the complaint filed by the Appellant/Complainant is per se not maintainable in Law. This Court comes to a consequent conclusion that the Appellant/Complainant had not established his case beyond all reasonable doubt. Therefore, the resultant view taken by the trial Court in finding the Respondent/Accused not guilty and acquitting him under Section 255(1) Cr.P.C. is free from any flaw. Consequently, the Criminal Appeal fails. Appeal dismissed.

Summary

Issues Involved:

1. Technical defect in the legal demand notice.
2. Compliance with Section 138 of the Negotiable Instruments Act.
3. Evidence of transaction and outstanding debt.
4. Legal presumption and burden of proof.
5. Validity of the complaint based on the incorrect cheque number.

Issue-wise Detailed Analysis:

1. Technical Defect in the Legal Demand Notice:
The trial court observed that there was a technical defect in the legal demand notice issued under Section 138 of the Negotiable Instruments Act. Specifically, the cheque number was incorrectly mentioned as '361838' instead of '361868'. This defect was deemed significant as the issuance of notice to the drawer is a pre-requisite condition before lodging a complaint for cheque dishonour. The court emphasized that this right is based on the principle of Audi Alteram Partem, meaning the payee must follow the legal requirements strictly to establish a case under Section 138.

2. Compliance with Section 138 of the Negotiable Instruments Act:
The court highlighted that the appellant/complainant failed to meet the essential requirements of Section 138. The legal demand notice must correctly mention the cheque number, and any error in this regard could not be overlooked as it is a technical offence. The court noted that the purpose of the notice is to provide prior intimation about the action to be taken against the drawer of the cheque. Any ambiguity or incorrect information in the notice would not benefit the complainant.

3. Evidence of Transaction and Outstanding Debt:
The appellant/complainant claimed that the respondent/accused had issued a cheque for Rs. 6,00,000 towards the outstanding amount for the supply of chickens. However, the court found inconsistencies in the complainant's evidence. The complainant admitted that he did not possess receipts for every transaction and failed to produce account books or receipts to substantiate the running transaction. Additionally, the complainant acknowledged receiving Rs. 2,00,000 from the accused, which was not reflected accurately in the legal notice.

4. Legal Presumption and Burden of Proof:
The court noted that while Section 118 of the Negotiable Instruments Act provides a rebuttable presumption, the existence of a legally recoverable debt is not presumed under Section 139. The burden of proof lies on the complainant to establish the debt or liability. The court found that the complainant did not provide sufficient evidence to prove the outstanding debt beyond reasonable doubt.

5. Validity of the Complaint Based on the Incorrect Cheque Number:
The court emphasized that the incorrect mention of the cheque number in the legal notice was not a trivial or ancillary error. Since the issuance of the cheque was part of a running transaction, the mistake in the notice rendered it non-compliant with Section 138(b) of the Negotiable Instruments Act. Consequently, the complaint was deemed not maintainable in law due to this defect.

Conclusion:
The High Court affirmed the trial court's judgment, concluding that the appellant/complainant failed to establish the case beyond reasonable doubt. The technical defect in the legal demand notice, inconsistencies in evidence, and failure to meet the statutory requirements under Section 138 led to the acquittal of the respondent/accused. The criminal appeal was dismissed, and the trial court's judgment was upheld.