2019 (9) TMI 1718 - SC - Indian Laws

Dishonour of Cheque - existence of debt or liability or not - oral sale of a property and towards consideration for purchase - HELD THAT - The offence alleged was that a cheque was given towards consideration for purchase of a property. Neither any document was produced on record nor there was any evidence that any conveyance was executed in favour of the appellant. Thus, the submission of the appellant that there was no existing debt or liability against which the cheque was given had to be accepted - the High Court was in error in accepting the appeal and upsetting the view taken by the Trial Court. The decision of the High Court is set aside - appeal allowed.

Summary

Issues:
Appeal against judgment of High Court convicting appellant under Section 138 of Negotiable Instruments Act based on bounced cheque.

Analysis:
The appellant was accused in a case where a cheque issued by him bounced upon presentation. The Trial Court acquitted the appellant as the basic ingredient of conveyance in a property sale was not proved. The High Court, in an appeal by the complainant, found the appellant guilty under Section 138 of the Negotiable Instruments Act and sentenced him to imprisonment and fine. The Supreme Court noted that no evidence of conveyance in favor of the appellant was produced, thus accepting the appellant's argument of no existing debt or liability against which the cheque was given. The Court held that the High Court erred in overturning the Trial Court's decision and allowed the appeal, setting aside the High Court's judgment and restoring the Trial Court's acquittal order.