2020 (3) TMI 988 - HC - Indian Laws

Dishonor of Cheque - section 138 of NI Act - petitioner has submitted that the Courts below passed the judgements only on surmises and not on settled proposition of law - HELD THAT - In the case on hand, it is admitted by the petitioner that Cheques were issued by him. It is quite natural that the person, who issued or was responsible to issue the cheques, has to rebut the presumption placing necessary evidence, because when cheques are issued towards payment of certain amount, it is presumed that there was existence of a legally enforceable debt. When the issuance of the cheques are admitted by the petitioner, the respondent is entitled to invoke presumption under Sections 118 and 139 of the Negotiable Instruments Act for discharging the subsisting liability and in this case, rightly the respondent has invoked such presumption. The presumption will live, exist and survive and shall end only when the contrary is proved by the petitioner, i.e., the cheque was not issued for consideration and in discharge of any debt or liability. Further more, there is no iota of evidence or document on the side of the petitioner by way of reply to prove that there is no legally enforceable debt or liability due to the complainant. Hence, the petitioner has not rebutted the presumption as contemplated under Section 139 of the Negotiable Instruments Act. This Court is of the opinion that cogent and convincing reasons have been recorded by the Courts below for convicting and sentencing the petitioner / accused and hence they are confirmed as such - This Criminal Revision Case is devoid of merits and hence the same is dismissed.

Summary

Issues:
1. Conviction and sentence under Section 138 of the Negotiable Instruments Act.
2. Dispute regarding a hand loan and post-dated cheque.
3. Defense based on the purchase of a lorry and security cheques.
4. Evaluation of evidence and defense presented by the accused.
5. Legal interpretation of presenting a dishonored cheque multiple times.
6. Burden of proof on the accused in cases under Section 138 of the NI Act.

Analysis:
1. The judgment deals with the appeal against the conviction and sentence imposed on the petitioner for an offense under Section 138 of the Negotiable Instruments Act. The petitioner was sentenced to undergo rigorous imprisonment and pay a fine. The case revolved around a hand loan, issuance of a post-dated cheque, and subsequent dishonor, leading to a legal dispute between the parties.

2. The complainant alleged that the petitioner borrowed a sum of money as a hand loan and issued a post-dated cheque, which was returned due to insufficient funds. Despite a statutory notice, the petitioner did not respond, leading to a private complaint under Section 138 NI Act. The respondent's case was supported by evidence and documents, resulting in the conviction by the lower courts.

3. The petitioner's defense was based on a lorry purchase from the respondent, with security cheques issued for pending payments and accidents involving the lorry. However, the courts found discrepancies in the petitioner's submissions, as the evidence did not support his claims. The defense failed to rebut the presumption under Section 139 of the NI Act, leading to the rejection of the defense's contentions.

4. The judgment evaluated the evidence presented by both parties and emphasized the importance of proper defense and evidence to rebut legal presumptions. The courts below found the petitioner guilty based on the evidence and lack of credible defense. The petitioner's failure to respond to the notice and provide substantial proof led to the affirmation of the lower courts' decisions.

5. The legal interpretation regarding presenting a dishonored cheque multiple times was clarified based on precedents. The judgment highlighted that the payee can successively present a dishonored cheque within its validity period, with each presentation creating a fresh cause of action. The petitioner's argument regarding repeated presentations of the cheque was dismissed based on established legal principles.

6. The burden of proof in cases under Section 138 NI Act was discussed, emphasizing that the accused must rebut the presumption under Sections 118 and 139 by providing evidence to disprove the existence of a legally enforceable debt. The judgment concluded that the petitioner failed to meet this burden, leading to the dismissal of the appeal and confirmation of the conviction and sentence imposed by the lower courts.