2018 (8) TMI 633 - HC - Indian Laws

Dishonor of Cheque - sufficient evidence to prove dishonor of cheque within statutory period. Held that - In the present case, if the findings of the trial Court that the appellant had failed to prove dishonour of cheque and that the complaint could not be said to have been filed within limitation, are found to be erroneous, then the impugned order acquitting the respondent will have to be reversed. Since the trial Court found that the issue of legal debt or liability was proved by the respondent, the only question that arises in the present case is, as to whether it could be said that there was sufficient evidence to prove dishonour of cheque to conclude that the respondent had committed offence under Section 138 of the said Act - once such a memo or slip issued by the bank bearing its official mark concerning dishonour of cheque is placed on record by the complainant, the burden is clearly on the accused to disprove the fact of dishonour of cheque. When the basic fact of dishonour of cheque was not proved by the appellant and the burden was not discharged, offence under Section 138 of the said Act could not be said to have been committed by the respondent. Another important aspect of the present case is that when there is lack of evidence to show dishonour of cheque and consequently the date when the cheque was dishonoured, there is no reference point to ascertain as to whether the notice for demand of payment was issued by the appellant to the respondent within the period of 30 days of receipt of information from the bank regarding return of cheque as unpaid, as provided under proviso (b) to Section 138 of the said Act - This is the reason why the trial Court has held that the appellant failed to prove that she made demand for payment of amount within the statutory period, as the statutory period could not be computed in the facts of the present case. Analysis of the provisions of the said Act, particularly Sections 138, 142 and 146 thereof, shows that cognizance of the offence under Section 142 of the said Act could not have been taken by the Court in the present case because the basic fact of dishonour of cheque could not be proved by the appellant - the complaint in the present case was correctly rejected by the trial Court, thereby acquitting the respondent. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the appellant proved the dishonour of the cheque.
2. Whether the statutory notice was issued within the prescribed period.
3. Whether the trial court erred in acquitting the respondent.

Detailed Analysis:

1. Whether the appellant proved the dishonour of the cheque:

The appellant argued that the cheque issued by the respondent was dishonoured due to insufficient funds. The appellant presented documents, including the disputed cheque, demand notice, postal acknowledgment, and her statement recorded by the police. However, the memo issued by the bank when the cheque was dishonoured did not bear the official mark or signature of the bank officer, which led to it not being exhibited during evidence. The trial court found that the appellant failed to prove the dishonour of the cheque because the memo did not satisfy the requirements under Section 146 of the Negotiable Instruments Act, 1881, which states that a bank's slip or memo with an official mark is prima facie evidence of dishonour. The trial court concluded that the appellant did not provide sufficient evidence to prove the cheque's dishonour.

2. Whether the statutory notice was issued within the prescribed period:

The trial court held that due to the lack of evidence proving the cheque's dishonour, there was no reference point to ascertain whether the notice for demand of payment was issued within the statutory period of 30 days as required under proviso (b) to Section 138 of the Negotiable Instruments Act. The appellant's failure to prove the date of dishonour meant that the statutory period could not be computed, leading the court to conclude that the notice was not proven to be within the prescribed period.

3. Whether the trial court erred in acquitting the respondent:

The appellant contended that the trial court erred in acquitting the respondent despite finding that the appellant had advanced a hand loan to the respondent, and the cheque was issued towards repayment of this loan. The appellant argued that the trial court should have convicted the respondent based on the evidence provided. However, the respondent's counsel emphasized that the burden of proof was on the appellant to prove the basic facts of deposit and dishonour of the cheque, which was not met. The trial court found that the appellant did not provide cogent evidence to prove the cheque's dishonour, and therefore, the complaint was rightly dismissed.

Conclusion:

The High Court upheld the trial court's judgment, stating that the appellant failed to demonstrate any error in the trial court's findings regarding the proof of dishonour of the cheque. The appeal was dismissed, and the trial court's judgment and order acquitting the respondent were confirmed.