2018 (10) TMI 1078 - HC - Indian Laws

Dishonor of cheque due to insufficiency of funds - Section 138 of NI Act - recovery of loan - rebuttal of presumption - The incriminating circumstances which put before the accused, he denied the evidence of complaint as false and he opted for examining witness on his behalf - Held that - On a careful perusal of the records reveals that the complainant has proved that the accused borrowed a sum of ₹ 1 lakh and issued a cheque on 01.02.2008, when he presented, the cheque was returned. Therefore, within 15 days from the statutory period, the accused failed to pay the amount. Therefore, he committed the offence and Courts below found that the complainant has proved, the execution of cheque and drew the legal presumption. Whereas, the accused has stated that the complainant has not proved, the loan transaction between both the parties and he has attempted to prove that he has not borrowed money and also the cheque has not been issued for the legally enforceable debt - It is well settled law that once the execution of the cheque is admitted and the signature is not disputed and it is the legal presumption that the cheque is issued for the legally enforceable debt. No doubt, the presumption is rebuttable presumption. Therefore, it is for the accused to rebut the presumption. If not through direct evidence but by way of probable defence - the Courts below found that the said legal presumption has not been rebutted by the accused in the manner known to law. This Court does not find any perversity in the order passed by both the Courts below. Therefore, the criminal revision in Crl.R.C.No.1430/2013 filed by the accused is dismissed.

Summary

Issues involved:
1. Conviction under Section 138 of Negotiable Instruments Act
2. Appeal for enhancement of sentence
3. Revision filed challenging the judgment

Analysis:
1. The complainant alleged that the accused borrowed ?1 lakh and issued a dishonored cheque, leading to a complaint under Section 138 of Negotiable Instruments Act. The Magistrate found the accused guilty, sentencing him to three months imprisonment and a fine. The appellate court upheld the conviction, stating the complainant proved his case beyond reasonable doubt, and the accused failed to rebut the statutory presumption. The accused then filed a revision challenging the judgment, arguing lack of proof of the loan transaction and enforceable debt. However, the courts found the complainant proved the loan and the accused failed to rebut the presumption, leading to the dismissal of the revision.

2. The complainant sought enhancement of the fine imposed by the trial court. The court partially allowed the revision, increasing the fine to ?2 lakhs, equal to twice the cheque amount. The accused was directed to deposit this amount as compensation to the complainant within six months.

3. The judgment highlighted the importance of proving a legally enforceable debt in cheque dishonor cases. The courts emphasized the presumption under Section 118 and 139 of the Negotiable Instruments Act, shifting the burden to the accused once the execution of the cheque is admitted. The revision court upheld the lower courts' findings, emphasizing the complainant's successful proof and the accused's failure to rebut the statutory presumption. The revision was dismissed, confirming the conviction and modifying the fine amount.

This detailed analysis covers the issues of conviction under Section 138 of Negotiable Instruments Act, the appeal for enhancement of sentence, and the revision challenging the judgment, providing a comprehensive overview of the legal proceedings and outcomes.