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2019 (9) TMI 827 - HC - Indian LawsDishonor of Cheque - instruction issued for Stop Payment - insufficiency of funds - the petitioner has admitted the business transaction with the respondent No. 2 but he also alleged that he had not issued the cheques in question in favour of the respondent No. 2/ complainant - section 138 of NI Act - HELD THAT - No cogent evidence has been led by the petitioner in support of the said claim. The reason for dishonour of cheque is insufficiency of funds. No explanation was given by the petitioner as to why he did give stop payment instructions regarding the cheques in question, if, cheques were misplaced. Further, the petitioner did not step into the witness box to stand by his defence. The defence taken by the petitioner at the time of framing of notice and while recording the statement of petitioner under Section 281 Cr.P.C. read with Section 313 Cr.P.C. cannot be considered as evidence. There are no merit in the petition - petition dismissed.
Issues:
1. Failure of trial and appellate courts to consider the lack of prima facie case under Section 138 of Negotiable Instruments Act. 2. Allegations of the petitioner regarding misplaced cheques and lack of evidence to support the claim. 3. Legal significance of the defense taken by the petitioner and its evidentiary value. 4. Application of legal precedents regarding the nature of evidence in such cases. Analysis: Issue 1: The petitioner sought to set aside the judgment and order passed by the trial court and the appellate court, arguing that both courts failed to consider the absence of a prima facie case under Section 138 of the Negotiable Instruments Act. The petitioner contended that the summoning was based on an affidavit that lacked essential details, such as the existence of a legally recoverable debt or a demand made against the petitioner. The petitioner highlighted the failure of the respondent to file a detailed affidavit or examine himself as a complainant, which, according to the petitioner, rendered the summoning order perverse. Issue 2: The respondent, a proprietary company engaged in the cloth business, accused the petitioner of purchasing cloth worth a specific amount and issuing a cheque in return. The respondent alleged that the cheque was dishonored due to insufficient funds, leading to legal proceedings. The petitioner defended himself by claiming that he had business dealings with the respondent years ago but denied issuing the cheque in question. The petitioner admitted to misplacing some cheques, including the disputed one, and filed a police complaint. However, the petitioner failed to provide substantial evidence to support his defense, such as explaining the dishonor of the cheque or producing evidence of the alleged police complaint. Issue 3: The petitioner's defense, including his statements under Section 281 Cr.P.C. and Section 313 Cr.P.C., was scrutinized for its evidentiary value. The court noted that the defense taken by the petitioner could not be considered as evidence, as per legal precedents. The petitioner's failure to provide concrete evidence to support his claims, despite admitting to the business transaction, weakened his defense. The court emphasized the importance of evidence presented under oath and cross-examination, which the petitioner failed to provide in this case. Issue 4: Citing legal precedents, the court clarified that the defense taken by the petitioner during various stages of the legal proceedings did not constitute evidence under the Indian Evidence Act. The court highlighted the distinction between statements made in court applications or during the framing of notice and evidence presented through sworn testimony subject to cross-examination. The court concluded that the petitioner's defense lacked merit based on the established legal principles and factual circumstances of the case. In conclusion, the court dismissed the petition, emphasizing the lack of merit in the petitioner's arguments and the absence of substantial evidence to support his defense. The court's decision was based on a thorough analysis of the legal issues raised, the evidentiary value of the petitioner's defense, and the application of relevant legal precedents to the case.
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