2018 (6) TMI 1366 - HC - Indian Laws

Acquittal of Offence - Section 138 read with 142 of the Negotiable Instruments Act - The case of the appellant is that the accused had financial transaction with the appellant and in the said transaction, he had borrowed ₹ 9 Lakhs on 10.12.2003 after executing a promissory note, and to discharge the said liability, the respondent/accused issued a cheque dated 04.08.2004 for ₹ 10,04,850/- - Held that - This Court is not able to accept the contention of the accused, since he has not examined any one of the Panchayatar to prove the above said alleged Panchayat took place. In view of the discussion made above this Court has no hesitation to hold that the subject cheque was issued by the accused/Respondent for the legally enforceable debt and the accused has not rebutted the presumption available to the complaint under Section 139 of Negotiable Instruments Act. The finding of the Learned Magistrate that complainant has not produced proper accounts to prove the existing liability as on 2004 is immaterial. The learned Magistrate ought to have seen that whether the subject cheque in question was issued by the accused, if so, the same was issued for the legally enforceable debt - the accused has admitted the issuance of cheque and the same was also held to be issued for the legally enforceable debt. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Challenge to order of acquittal under Section 378 of Cr.P.C. in C.C.No.213 of 2004 for offences under Section 138 read with 142 of the Negotiable Instruments Act.

Detailed Analysis:

1. Alleged Financial Transaction and Cheque Issuance:
The appellant claimed that the respondent borrowed ?9 Lakhs on 10.12.2003 and issued a cheque for ?10,04,850/- to discharge the debt. The cheque was presented but returned unpaid, leading to a legal notice being sent. The respondent neither replied nor paid, resulting in the complaint under Section 138 of the NI Act.

2. Admission of Cheque Execution:
The appellant argued that the respondent admitted the cheque execution but failed to rebut the presumption under Section 139 of the NI Act. The learned Magistrate noted the cheque's validity period, the dishonor due to insufficient funds, and the respondent's admission of the signature, indicating an offence under Sections 138 and 142.

3. Defendant's Defense:
The respondent contended that the loan was settled in a Panchayat where he paid ?9 Lakhs and issued a cheque for ?1,50,000/-. He claimed misuse of a security cheque from 1994 in 2004 and the loss of documents by the complainant's father, challenging the appellant's version.

4. Presumption of Legally Enforceable Debt:
The court found the respondent's defense inadequate, noting the absence of evidence regarding the alleged Panchayat settlement and the failure to rebut the presumption of a legally enforceable debt under Section 139. The court emphasized the standard of proof required to rebut such presumption.

5. Rejection of Defendant's Contentions:
The court dismissed the respondent's contentions due to lack of evidence supporting the alleged settlement and the failure to respond to the legal notice. The court held that the accused's admission of cheque issuance for a legally enforceable debt was not properly rebutted, setting aside the Magistrate's finding.

6. Judgment and Sentence:
The court allowed the appeal, setting aside the acquittal and directing the respondent to undergo six months' simple imprisonment. Additionally, the respondent was ordered to pay the cheque amount as compensation, with default leading to further imprisonment for one month.

This detailed analysis covers the key aspects of the judgment, including the financial transaction, cheque issuance, legal presumptions, defense arguments, and the ultimate decision of the court.