2017 (2) TMI 869 - HC - Indian Laws

Dishonor of cheque due to insufficient funds - proceedings initiated Section 138 Negotiable Instruments Act - Held that - The petitioner has given contradictory statements in this behalf. It is not clear as to how much amount was advanced by the respondent to the petitioner in 2007. In response to the notice under Section 251 Cr.P.C. it was claimed that amount of ₹ 3.5 lacs was given in the month of June/July, 2007. The petitioner did not claim if the whole amount was returned in 2009. It was merely stated that interest @ 5% per month was given to the petitioner till July, 2009. No documents, whatsoever, have been placed on record regarding payment of interest to the petitioner. In the cross-examination of CW-1, it was suggested that payment of ₹ 3.5 lacs was given to the petitioner in 2007. In his 313 Cr.P.C. statement altogether different defence has been taken by the petitioner. He came up with the plea that he had given four cheques to the complainant and only one of them was signed by him. The said cheque was not presented by the complainant till date. He further stated that he had taken an amount of ₹ 3.5 lacs from the complainant and it was returned along with interest on 10.01.2009. The petitioner, however, has failed to place on record any document, whatsoever regarding the taking of loan of ₹ 3.5 lacs and its return along with interest. Considering the conflicting versions given by the petitioner at different stages of the trial, it appears that he has not presented true facts. Concurrent findings of the courts below are based upon fair appreciation of evidence and need no disturbance or intervention. The petitioner has been sentenced to undergo Simple Imprisonment for one year with fine/compensation of ₹ 21.50 lacs to the complainant; default sentence being Simple Imprisonment for six months. It is informed that the petitioner is not a previous convict and has already undergone substantial period of substantive sentence. Considering the facts and circumstances of the case, the sentence order is modified and the default sentence for non-payment of fine/compensation would be Simple Imprisonment for three months. Other terms and conditions of the sentence order are left undisturbed

Summary

Issues:
Challenge to judgment upholding conviction under Section 138 Negotiable Instruments Act based on dishonoured cheque.

Analysis:
The petitioner challenged the judgment upholding the conviction under Section 138 of the Negotiable Instruments Act, arguing that the respondent lacked the financial capacity to advance the loan amount. The petitioner claimed that a blank cheque issued as security for a previous loan was misused. The respondent, on the other hand, contended that the lower courts provided valid reasons for the conviction, and there was no justification to overturn the concurrent findings.

Both parties were childhood friends and had prior financial dealings. The respondent asserted providing a loan of ?21.50 lakhs to the petitioner without any written agreement, which was not reflected in his Income Tax Returns. The petitioner acknowledged receiving a loan of ?3.5 lakhs in 2007, against which a blank signed cheque was given as security, but the cheque was allegedly not returned after repayment due to being lost.

The court noted that the petitioner's statements regarding the loan transactions were inconsistent. The petitioner failed to produce any documentation supporting the loan and interest payments. The transactions between the parties were primarily based on trust and were not documented.

The court found that the petitioner's varying statements during the trial raised doubts about the authenticity of his claims. The concurrent findings of the lower courts were deemed to be based on a fair assessment of the evidence and did not warrant interference.

The petitioner was sentenced to one year of Simple Imprisonment and a fine/compensation of ?21.50 lakhs. However, considering the circumstances, the default sentence for non-payment of the fine/compensation was reduced to three months of Simple Imprisonment while leaving other terms of the sentence unchanged.

In conclusion, the Revision Petition was disposed of with the modification in the default sentence duration, and all pending applications were also resolved. The trial court record was directed to be sent back promptly along with a copy of the order.