2017 (7) TMI 824 - HC - Indian Laws

Conviction of the Appellant/Accused (Respondent before this Court) and acquitted in respect of an offence under Section 138 of the Negotiable Instruments Act, 1881 - Held that - Respondent/Accused ought to be examined in the present case before the trial Court because of the reason that she must explain the circumstances under which her signature was found in Exs.P1 to P3 Cheques and further, as to how the Appellant/Complainant was in possession of the case cheques. Further, this Court proceeds to add that Section 139 of the Negotiable Instruments Act mandates a presumption that the cheque leaves were issued to discharge a legally enforceable debt or liability. Moreover, the very fact that the Respondent/Accused had issued Stop Payment Letters to the concerned Bank after issuing necessary cheques creates an impression in the mind of this Court that she is to explain under what circumstances the Stop Payment Letter was issued to the Bank although she had come out with a Paper Publication Ex.D1 that the Cheques were lost. Moreover, for a heavy sum covered under Exs.P1 to P3, the signature of the Respondent/Accused found therein were not disputed. Therefore, to prove or to bring it to the notice of the Court concerned, the facts which are especially within the knowledge of the Respondent/Accused, this Court opines that the evidence of the Respondent/Accused is very much necessary. Therefore, under the existing circumstances, this Court comes to an irresistible and inescapable conclusion that the Remand of the entire subject matter in issue is a Fair, Equitable and prudent course of action. In the result, the Criminal Appeal is allowed. The Judgments of the First Appellate Court as well as the trial Court are set aside for the reasons assigned by this Court in this Appeal. The entire subject matter in issue is remanded back to the trial Court for fresh disposal in the manner known to Law and in accordance with Law.

Summary

Issues Involved:
1. Compliance with Section 138(b) of the Negotiable Instruments Act.
2. Legally enforceable debt or liability.
3. Validity of the notice served.
4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
5. Evidence and burden of proof.
6. Remand for fresh disposal.

Issue-wise Detailed Analysis:

1. Compliance with Section 138(b) of the Negotiable Instruments Act:
The First Appellate Court observed that the notice (Ex.P7) was not served upon the accused, leading to the conclusion that the complainant did not comply with Section 138(b) of the N.I. Act. The High Court noted that the notice was received on behalf of the accused, satisfying the requirement of Section 138(b).

2. Legally enforceable debt or liability:
The First Appellate Court held that the complainant failed to prove the legally enforceable debt or liability and the alleged loan transaction. The High Court emphasized that the complainant must prove the existence of a legally enforceable debt or liability, which was not adequately demonstrated.

3. Validity of the notice served:
The High Court pointed out that the notice (Ex.P7) was received on behalf of the accused, thus fulfilling the service requirement. However, it was noted that the signature on the acknowledgment card (Ex.P8) was not that of the accused.

4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The trial court presumed that the cheques were issued for discharging a subsisting liability, as the accused admitted the signatures on the cheques. The High Court reiterated that Sections 118 and 139 draw a presumption of liability once the signature is not disputed, but this presumption is rebuttable.

5. Evidence and burden of proof:
The High Court highlighted that the accused did not offer an explanation for how the cheques came into the complainant's possession, despite claiming they were lost. The accused did not testify or provide evidence to support her defense, which weakened her case.

6. Remand for fresh disposal:
The High Court concluded that the respondent/accused must be examined to explain the circumstances under which her signature appeared on the cheques and how they came into the complainant's possession. The case was remanded to the trial court for fresh disposal, directing the accused to testify and allowing both parties to present additional evidence.

Conclusion:
The High Court set aside the judgments of both the First Appellate Court and the trial court, remanding the case for fresh disposal. The trial court was directed to examine the accused and other witnesses, ensuring a fair and unbiased retrial. The trial court was instructed to complete the process within four months and submit a compliance report.