2006 (9) TMI 623 - HC - Indian Laws

Summary

Issues Involved:
1. Statutory or legal presumption vs. natural presumption or presumption of fact.
2. Discharging statutory or legal presumption by the accused.
3. Standard of proof required in a criminal trial to discharge a legal or statutory presumption.
4. Prosecution under Section 138 of the Negotiable Instruments Act for dishonour of cheque due to insufficiency of funds.
5. Impact of part payment received by the drawee on the prosecution under Section 138 of the N.I. Act.
6. Conviction under Section 420 IPC for cheating.

Detailed Analysis:

1. Statutory or Legal Presumption vs. Natural Presumption or Presumption of Fact:
The judgment clarifies the difference between statutory or legal presumption and natural presumption or presumption of fact. Statutory presumption is mandatory and arises by operation of law, whereas natural presumption is discretionary and arises from the facts of the case. The court must raise a statutory presumption when the necessary facts are established, unlike natural presumption, which the court may or may not raise based on the circumstances.

2. Discharging Statutory or Legal Presumption by the Accused:
The accused can discharge a statutory presumption by proving that the explanation offered is true. This can be done through cross-examination of prosecution witnesses or by presenting defense evidence. The explanation must be more than reasonable or plausible; it must be substantiated by proof.

3. Standard of Proof Required in a Criminal Trial to Discharge a Legal or Statutory Presumption:
The standard of proof required to discharge a statutory presumption is proof beyond a reasonable doubt. The accused must provide evidence that supports the explanation offered, showing that it is true and not merely plausible.

4. Prosecution Under Section 138 of the Negotiable Instruments Act for Dishonour of Cheque Due to Insufficiency of Funds:
Section 138 of the N.I. Act mandates that the drawer of a cheque is liable for prosecution if the cheque is dishonoured due to insufficiency of funds, provided certain conditions are met, such as the cheque being presented within six months and a notice demanding payment being issued to the drawer. The court must presume that the holder of the cheque received it for the discharge of debt or liability unless proven otherwise by the accused.

5. Impact of Part Payment Received by the Drawee on the Prosecution Under Section 138 of the N.I. Act:
The judgment emphasizes that if the drawee receives part payment of the cheque amount after the cheque is dishonoured, the drawee cannot present the cheque for the full amount again. The drawee must either cancel the cheque or validate it for the remaining liability. In this case, the complainant received Rs. 20,000 after the cheque for Rs. 75,000 was dishonoured, thus invalidating the prosecution for the entire amount of Rs. 75,000.

6. Conviction Under Section 420 IPC for Cheating:
The court found that the ingredients of the offence of cheating under Section 415 IPC were not present. The accused's liability was only Rs. 20,000, which he paid, and the cheque for Rs. 75,000 was not for an actual debt or liability. Therefore, the conviction under Section 420 IPC was not sustainable.

Conclusion:
The revision petition was allowed, and the impugned judgments and orders were set aside. The accused was acquitted of the offences under Section 138 of the N.I. Act and Section 420 IPC. The prosecution was deemed impermissible in law due to the part payment received by the complainant, which affected the validity of the cheque for the full amount.