2018 (1) TMI 312 - HC - Indian Laws

Cheque bounced - whether cheque was issued by the respondent or otherwise? - Held that - Once the signatory of the cheque did not dispute his signature found in the instrument then the presumption under Section 118 of Negotiable Instruments Act will come into play. As already stated the respondent/accused did not deny the signature found in the cheque in question. Therefore, both the Courts below have rightly came to a conclusion that the cheque in question was issued by the respondent/accused for ₹ 4,00,000/-. Issuance of Promissory note - whether promissory note was executed by the revision petitioner/accused? - Held that - Once the execution of an instrument is established, the presumption under Section 118 of Negotiable Instruments Act is that the said instrument was supported by consideration - it is crystal clear that the cheque in question was issued only towards the partial payment of promissory note debt as rightly contended by the learned counsel for respondent herein. Petition dismissed.

Summary

Issues:
1. Criminal Revision against conviction, sentence, and fine passed in lower courts.
2. Interpretation of Sections 138 and 139 of the Negotiable Instruments Act.
3. Dispute regarding promissory note execution and consideration.
4. Presumption of consideration under Section 118 of the Negotiable Instruments Act.
5. Failure to discharge the burden of proof.

Analysis:

1. The accused filed a Criminal Revision Case challenging the judgment of the Principal Sessions Judge confirming his conviction, sentence, and fine in a case related to a borrowed sum and a dishonored cheque. The accused failed to repay the amount despite issuing a cheque, leading to legal action.

2. The defense argued regarding the ingredients under Section 138 of the Negotiable Instruments Act and the presumption under Section 139. Citing a Supreme Court judgment, the defense emphasized that the presumption arising from Section 139 does not establish a legally enforceable debt automatically.

3. The dispute centered around the execution of a promissory note and the consideration passed. The complainant alleged that the accused borrowed a specific amount and executed a promissory note, supported by oral and documentary evidence. The accused failed to provide contrary evidence to disprove the promissory note's existence.

4. Both lower courts found that the promissory note was executed by the accused, leading to a presumption of consideration under Section 118 of the Negotiable Instruments Act. The evidence presented established prior transactions between the parties, indicating that the cheque issued was a partial payment towards the promissory note debt.

5. The accused's contention that there was no legally enforceable debt due to the alleged forgery of the promissory note was dismissed as the courts found in favor of the complainant based on the evidence presented. The burden of proof was on the accused, who failed to probablize his case, leading to the affirmation of conviction and sentence by both lower courts.

In conclusion, the High Court upheld the decisions of the lower courts, stating that the complainant was entitled to the presumption under the Negotiable Instruments Act. As the accused admitted his signature but failed to discharge the burden of proof, the courts' findings were deemed lawful and sustainable, resulting in the dismissal of the Criminal Revision Petition.