2019 (4) TMI 153 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - Section 138 of Negotiable Instruments Act - presumption under Section 118(a) and Section 139 Negotiable Instrument Act, 1881 was fulfilled - Held that - The coordinate Bench of this Court has clearly held by its judgment M/S. SONI IMPEX VERSUS M/S. TAURAIN OVERSEAS & ANR 2015 (2) TMI 1304 - DELHI HIGH COURT that the petitioner has been able to rebut the presumption and the respondent has failed to establish beyond reasonable doubt its case. This judgment of the coordinate Bench of this Court was not brought to the notice of the Appellate Court when it was hearing the arguments in this matter. Accordingly, the impugned judgment was passed. It is an admitted position that the respondent No.1 did not assail the order of the Coordinate Bench of this Court dated 04.02.2015, wherein, the findings, as noticed above, have been recorded. In that view of the matter, I am of the view that the impugned order cannot be sustained. Accordingly, the impugned order dated 09.12.2015 is quashed. Petitioner is acquitted of the said offence - the amount deposited by the petitioner with the Appellate Court as also with this Court shall be returned to the petitioner along with interest, if any accrued thereon. Petition allowed.

Summary

Issues Involved:
1. Condonation of delay in re-filing the Revision Petition.
2. Conviction under Section 138 of the Negotiable Instrument Act, 1881.
3. Allegations of sham transactions and rebuttal of statutory presumption.
4. Impact of previous judgments on the current case.

Detailed Analysis:

Condonation of Delay in Re-filing the Revision Petition:
The petitioner sought condonation of delay in re-filing the Revision Petition, explaining that the application was initially filed on time but was taken back for re-filing due to objections raised by the registry and subsequently got misplaced. The delay was not seriously opposed by the respondents, and hence, the application for condonation of delay was allowed.

Conviction under Section 138 of the Negotiable Instrument Act, 1881:
The petitioner was convicted for an offence under Section 138 of the Negotiable Instrument Act, 1881, and sentenced to one year of imprisonment along with a compensation payment of ?10 lakhs to the complainant. The complaint was based on a dishonoured cheque issued by the petitioner in discharge of a liability amounting to ?8,80,500/-. The Trial Court found that the petitioner had issued the cheque and had not disputed his signatures, thus fulfilling the presumption under Sections 118(a) and 139 of the Negotiable Instrument Act. The Appellate Court upheld this conviction, dismissing the petitioner's appeal.

Allegations of Sham Transactions and Rebuttal of Statutory Presumption:
The petitioner contended that the transactions were sham and that no goods were supplied by the respondent. The petitioner also argued that the respondent had set up two companies in the names of the petitioner and his father, and the petitioner was merely an employee. The Appellate Court rejected these contentions, noting that there was no evidence to support the claim of sham transactions and that the petitioner had not taken any action to stop the payment or demand the return of the cheque. The court held that the cheque was dishonoured due to insufficient funds, and the respondent had established his case based on the statement of account showing an outstanding amount equivalent to the cheque amount.

Impact of Previous Judgments on the Current Case:
The petitioner highlighted that in a similar case involving identical facts and common evidence, the Appellate Court had acquitted the petitioner, and the High Court had upheld this acquittal. This judgment was not brought to the notice of the Appellate Court in the current case. The previous judgment had found that the petitioner was able to raise serious doubts about the complainant's claims and establish that no amount was due. The High Court noted that the common evidence led in both cases showed that the petitioner had rebutted the presumption and the respondent had failed to prove his case beyond reasonable doubt. Consequently, the High Court quashed the impugned order dated 09.12.2015, acquitted the petitioner of the offence, and ordered the return of the amount deposited by the petitioner with interest.

Conclusion:
The High Court allowed the petition, quashed the conviction, and acquitted the petitioner based on the findings that the petitioner had successfully rebutted the statutory presumption and the respondent had failed to establish his case beyond reasonable doubt. The court also ordered the return of the deposited amount to the petitioner.