2017 (4) TMI 976 - HC - Indian Laws

Charge under Section 138 Negotiable Instruments Act - Held that - Both the complainant and the accused were known to each other being colleagues. It, however, fell into grave error to observe that the respondent was able to rebut the presumption and the burden was heavily upon the appellant to prove its case beyond reasonable doubt. There was no dispute raised by the appellant regarding the payments of ₹ 3.6 lacs and other payments amounting to ₹ 50,000/-. It was explained by the appellant that ₹ 3.6 lacs paid prior to the execution of the document (Ex.DW-1/P1) were towards another transaction and ₹ 50,000/- were out of the loan amount ₹ 5 lacs. The Trial Court failed to record any finding if there was any payment by the respondent after the issuance of the admitted cheque (Ex.CW-1/1) to the appellant. The respondent did not explain as to under what situation and circumstances the cheque on presentation was dishonoured. For the forgoing reasons, respondent s acquittal under Section 138 Negotiable Instruments Act is unsustainable and set aside. The appeal is allowed and the respondent is convicted under Section 138 Negotiable Instruments Act. Section 138 provides that a person guilty for the offence be punished with imprisonment with term which may extend to two years or with fine which may extend to twice the amount of cheque or with both. In the instant case as observed above, in civil proceedings, the respondent has made certain payments. Having regard to the facts and circumstances of the case, the respondent is sentenced to undergo SI for one month. The respondent shall surrender before the Trial Court to serve the sentence on 24.04.2017 failing which, coercive process shall be issued against him.

Summary

Issues:
- Appeal against acquittal under Section 138 Negotiable Instruments Act.
- Credibility of evidence presented by the respondent.
- Discrepancies in respondent's statements at different stages of trial.
- Comparison of evidence in civil suit and criminal case.
- Burden of proof and presumption in a case under Section 138 Negotiable Instruments Act.

Analysis:
1. The appellant filed a complaint under Section 138 Negotiable Instruments Act against the respondent for dishonoring a cheque issued for a loan. The respondent initially admitted to issuing the cheque but later claimed to have made payments towards the loan. The trial court acquitted the respondent, but the High Court found discrepancies in the respondent's statements and the evidence presented. The High Court set aside the acquittal and convicted the respondent under Section 138 Negotiable Instruments Act.

2. The respondent's defense in the criminal case contradicted his statements in a civil suit where he admitted receiving a loan and issuing a cheque for the balance amount. The civil court noted the respondent's admissions and the lack of evidence supporting his claim of making payments. The High Court considered these discrepancies and the respondent's failure to provide credible evidence of repayment, leading to the conviction.

3. The High Court highlighted the burden of proof in cases under Section 138 Negotiable Instruments Act, emphasizing the appellant's duty to establish the case beyond a reasonable doubt. The court noted the lack of explanation from the respondent regarding the dishonor of the cheque and the absence of evidence supporting his defense. Based on the evidence and circumstances, the court found the respondent's acquittal unsustainable and convicted him under Section 138.

4. Considering the penalty under Section 138, the High Court sentenced the respondent to undergo simple imprisonment for one month. The court directed the respondent to surrender before the Trial Court by a specified date, failing which coercive measures would be taken. The High Court ordered the trial court record to be returned promptly with a copy of the judgment for further proceedings.