2020 (2) TMI 1023 - HC - Indian Laws

Dishonor of Cheque - acquittal of accused - rebuttal of presumption - burden to prove - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT - In the present case, the trial court recorded finding that though the appellant deposed that the amount is shown in income tax return and account of Prabha Sales but the said income tax and account of Prabhas Sales was not produced, therefore, version of the appellant is not corroborated. In view of this court, the finding arrived at by the trial court is clearly against the legal aspect of the matter. When respondent has not denied by adducing evidence of himself that he has not borrowed money from the appellant, presumption under Section 139 of the Act, 1881 will survive and remain exist and corroboration to the statement of the appellant is not required. From the evidence of the appellant, it is clearly established that respondent had earlier taken amount of ₹ 3,14,000/- from him which was returned by him. Appellant is running business of of railway machinery and advancing sum to respondent in earlier occasions which shows that he is capable to advance money to the respondent, therefore, it is not a case where source of income of the appellant is not established. The amount was advanced on the basis of personal relation, therefore, preparation of other documents was not required under the law and cheque issued by the respondent is the best document for showing liability of the respondent. On an overall assessment, it can be said that the finding of the trial court is against weight of the evidence and same is perverse - Further, finding arrived at by the trial court is not legal and contrary to the provisions of the Act, 1881. Respondent is convicted under Section 138 of the Negotiable Instruments Act, 1881. The date of issuance of cheque is 10-7-2015. Appellant is entitled to interest @ 6% per annum on the amount advanced by him - appeal allowed.

Summary

Issues Involved:
Acquittal appeal against judgment under Section 138 of the Negotiable Instruments Act, 1881.

Detailed Analysis:

1. Appellant's Submission:
- Appellant, a proprietor of Prabha Sales, provided a loan to the respondent.
- Appellant argued that the trial court erred in concluding he failed to prove the source of income, contrary to legal principles.
- Appellant contended that the respondent borrowed the amount for a contract work, disputing the trial court's findings.

2. Respondent's Submission:
- Respondent's counsel argued that the trial court rightly held that appellant failed to prove the cheque was issued in discharge of a liability.
- The respondent claimed the appellant's story was an afterthought, supporting the trial court's decision.

3. Court's Analysis:
- The court examined whether the cheque was issued for the discharge of debt and remained unpaid due to insufficient funds.
- Evidence presented by the appellant, including documents and witness testimony, supported the issuance and dishonor of the cheque.
- Legal provisions under the Negotiable Instruments Act, 1881, regarding presumptions and liabilities were discussed.

4. Presumptions and Burden of Proof:
- The court noted that the respondent failed to rebut the presumption that the cheque was issued for a debt.
- The appellant's failure to present income tax returns or business accounts did not negate the presumption under the Act.
- The court emphasized that corroboration was not necessary when legal presumptions were in favor of the appellant.

5. Court's Decision:
- The trial court's findings were deemed against the weight of evidence and legal provisions.
- The respondent was convicted under Section 138 of the Act and sentenced to pay a fine with interest.
- The court clarified that imprisonment for non-payment was a mode of recovery, not satisfaction of liability.

6. Conclusion:
- The appeal was allowed, setting aside the trial court's decision.
- The respondent was convicted under Section 138 of the Act and ordered to pay the fine with interest, emphasizing the legal obligations under the Act.