2018 (11) TMI 1162 - HC - Indian Laws

Dishonor of Cheque due to insufficiency of funds - present appeal is filed on the ground that Appellate Court has failed to consider the falsity of defense witness - recovery of loan - Sections 138 and 142 of the Negotiable Instruments Act - Principles of natural justice - Held that - The factum of issuing the cheques on 30.06.2012 not being disputed by the accused and the attempt to show that the subject cheque was obtained on the date of executing the mortgage deed being falsified despite examining of D.W.1 and D.W.3. The First Appellate Court has still dismissed the complaint by reversing the well considered judgment of the trial Court. It is pointed out by the learned counsel for the appellant that the first Appellate Court by surmises and conjectures has laid its conclusion that the variance in colour and writings found in the subject cheques, amounts to material alteration in the Negotiable Instrument. The said findings of the First Appellate Court is perverse, contrary to law - The evidence of D.W.2, and the explanation of the accused goes to show that the subject cheques were given to the complainant on 04.11.2011 itself when he mortgaged the property and obtained loan of ₹ 2,00,000/- gets falsified. The order of the First Appellate Court bristles with infirmity and perversity - appeal allowed.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Appeal against the reversal of the trial court's judgment by the Appellate Court.

Analysis:
1. The appellant filed complaints under Sections 138 and 142 of the Negotiable Instruments Act, alleging that the respondent borrowed money and issued cheques that bounced. The trial court convicted the respondent, but the Appellate Court reversed this decision based on discrepancies in the cheques' dates and ink colors. The defense argued that the cheques were security for a mortgage loan, not hand loans. The trial court considered consistency in the complainant's case and contradictions in the defense's evidence, leading to the conviction. However, the Appellate Court found the discrepancies significant, leading to the reversal of the judgment.

2. The appellant appealed the Appellate Court's decision, claiming that the judgment was erroneous. The defense contended that the cheques were issued as security for a mortgage loan and not as hand loans. The Appellate Court highlighted inconsistencies in the cheques' details and ink colors, leading to the reversal of the trial court's judgment. The appellant argued that the Appellate Court failed to consider the falsity of the defense witnesses' claims. However, the Appellate Court maintained its decision based on the discrepancies in the cheques. The appellant further argued that the variance in ink colors and writings did not constitute a material alteration, as claimed by the Appellate Court.

3. The trial court's judgment was based on the presumption under Sections 118 and 139 of the Negotiable Instruments Act, while the Appellate Court focused on the discrepancies in the cheques' details. The defense's argument that the cheques were security for a mortgage loan was not accepted by the Appellate Court due to the inconsistencies in the cheques' information. The appellant contended that the Appellate Court's conclusion regarding the ink colors and writings in the cheques was erroneous and contrary to law. The court emphasized that the signature on the cheques was crucial, and variations in ink colors and writings did not amount to material alterations as claimed by the Appellate Court.

4. The defense's witnesses' testimonies were scrutinized, and their claims regarding the issuance of the cheques were found inconsistent. The appellant provided evidence supporting the issuance of the cheques as hand loans, while the defense maintained they were for a mortgage loan. The Appellate Court's decision to reverse the trial court's judgment was challenged based on the inconsistencies in the witnesses' testimonies and the significance attributed to the discrepancies in the cheques' details. Ultimately, the High Court allowed the criminal appeal, finding the Appellate Court's reasoning flawed and not in line with the law or the evidence presented.