2019 (8) TMI 1012 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - rebuttal of presumption - section 138 of NI Act - HELD THAT - In the present case, there is no dispute about the fact that the cheque in question at Exh.46 was signed by the applicant herein. A perusal of cheque shows that the rubber stamp of Suraj Traders has been affixed on the said cheque. There is also no dispute about the fact that the aforesaid cheque finds mention in the registered sale deed dated 17/09/2009, executed in respect of shop premises in favour of wife of the applicant, wherein the applicant has signed as witness to the said document. There is also no dispute about the fact that the said cheque for an amount of ₹ 1,25,000/ was dishonoured and that there was compliance on the part of the non -applicant as regards the service of statutory notice to the applicant. Accordingly, the requirements of Section 138 of the aforesaid Act stood satisfied, pursuant to which the non -applicant filed such complaint against the applicant. Since, there is no dispute about the fact that the applicant had signed on the said cheque, the presumption under Sections 118 and 139 of the aforesaid Act came into operation in the present case - The presumptions that arose in full force against the applicant under Sections 118 and 139 of the aforesaid Act have not been rebutted in any manner by the applicant and, therefore, it cannot be said that the Courts below committed an error in convicting and sentencing the applicant. Since no error is found in the concurrent orders of conviction passed by the two Courts below, the present revision application is dismissed. Revision application dismissed.

Summary

Issues Involved:
1. Challenge to Conviction and Sentence under Section 138 of the Negotiable Instruments Act, 1881.
2. Validity of the Complaint due to the Proprietary Concern not being a Party.
3. Defense of Cheque Issued as Security.
4. Rebuttal of Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
5. Request for Leniency in Sentencing.

Detailed Analysis:

1. Challenge to Conviction and Sentence under Section 138 of the Negotiable Instruments Act, 1881:
The applicant challenged the conviction and sentence imposed by the Judicial Magistrate First Class, Amravati, which included rigorous imprisonment for six months and a compensation payment of ?1,30,000. The Sessions Court reduced the sentence to one month of rigorous imprisonment but maintained other directions. The applicant filed a revision application against these judgments.

2. Validity of the Complaint due to the Proprietary Concern not being a Party:
The applicant argued that the complaint was not maintainable as it was filed against him personally, while the cheque was signed in the capacity of Proprietor of "Suraj Traders." The court analyzed Section 141 and 142 of the Negotiable Instruments Act and concluded that these sections pertain to companies and firms, not proprietary concerns. The court found that the applicant had signed the cheque and the sale deed as a witness, thereby establishing his connection with the transaction. The court rejected the argument that the complaint was invalid due to the proprietary concern not being a party.

3. Defense of Cheque Issued as Security:
The applicant contended that the cheque was issued as security and that the sale consideration was paid in cash. The court examined the evidence, including the registered sale deed which mentioned the cheque as the mode of payment. The court found no cogent evidence to support the applicant's claim of cash payment. The non-applicant denied receiving cash, and the applicant failed to take any steps to demand the return of the cheque or stop its payment. The court concluded that the defense of the cheque being issued as security was unsustainable.

4. Rebuttal of Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The court noted that the applicant's signature on the cheque triggered the presumption under Sections 118 and 139 of the Negotiable Instruments Act, which presumes the cheque was issued for discharge of a debt or liability. The applicant failed to rebut this presumption effectively. The court held that the applicant did not provide sufficient evidence to prove that the cheque was not issued for a legitimate debt or liability.

5. Request for Leniency in Sentencing:
The applicant requested leniency, citing that he was the sole breadwinner of his family. The court referred to a Supreme Court judgment where leniency was shown under peculiar circumstances. However, the court found no such circumstances in the present case. The Sessions Court had already reduced the sentence from six months to one month. Therefore, the court rejected the request for further leniency.

Conclusion:
The court found no error in the concurrent judgments of the lower courts and dismissed the revision application. The interim order suspending the sentence was extended for three weeks, with a clear indication that no further extension would be granted.