2005 (11) TMI 532 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the accused committed an offense under Section 138 of the Negotiable Instrument Act, 1938.
2. Whether the cheques were issued for the discharge of any existing liability or debt.
3. Whether the trial court erred in acquitting the accused based on the evidence presented.

Issue-Wise Detailed Analysis:

1. Whether the accused committed an offense under Section 138 of the Negotiable Instrument Act, 1938:

The appellant challenged the acquittal of the accused under Section 138 of the Negotiable Instrument Act, 1938, which pertains to the dishonor of cheques for insufficiency of funds. The trial court framed two issues: whether the accused committed an offense under Section 138 and what order should be passed. The trial court concluded that the accused did not commit the offense and acquitted him.

2. Whether the cheques were issued for the discharge of any existing liability or debt:

The complainant alleged that the accused issued two cheques totaling Rs. 13,61,000 as payment for a row house. The cheques were dishonored due to insufficient funds. The complainant issued a notice demanding payment, which the accused did not fulfill. The accused argued that the cheques were issued as a guarantee, not for an existing liability. The trial court found that the complainant failed to prove the cheques were issued for an existing liability.

The appellant argued that under Section 139 of the Negotiable Instrument Act, there is a presumption that the cheques were issued for discharging a debt or liability, and the accused must disprove this presumption with cogent evidence. The appellant cited several Supreme Court judgments, including *K.N. Beena v. Muniyappan* and *Hiten P. Dalal v. Bratindranath Banerjee*, to support this contention.

The court noted that the accused did not deny signing the cheques or receiving the statutory notice. The accused's application to withdraw an earlier declaration admitting liability was based on improbable grounds. The court found that the accused failed to disprove the presumption under Section 139, as he did not lead any evidence to show the cheques were not issued for an existing liability.

3. Whether the trial court erred in acquitting the accused based on the evidence presented:

The appellant argued that the trial court's judgment was perverse and unreasonable, as it failed to appreciate the material evidence and the statutory presumption under Section 139. The court agreed, stating that the trial court misconceived the scheme of the Act and the mandatory presumption in favor of the complainant. The trial court's approach resulted in a miscarriage of justice.

The court emphasized that the statutory presumption under Section 139 requires the accused to lead cogent evidence to rebut it. The accused's failure to do so, coupled with his admission of liability in an earlier declaration, led the court to conclude that the trial court erred in acquitting the accused.

Conclusion:

The court quashed and set aside the trial court's judgment of acquittal, remanding the matter back to the trial court for determining the award of sentence and compensation after affording both sides an opportunity to be heard. The trial court was directed to decide the matter within two months from the date of receipt of the writ.