2020 (5) TMI 340 - HC - Indian Laws

Dishonor of Cheque - summon order - rebuttal of presumption - HELD THAT - A dishonour would constitute an offence only if the cheque is returned by the bank unpaid either because the amount of money standing to the credit of the drawer s account is insufficient to honour the cheque or that the amount exceeds the amount arranged to be paid from that account by an agreement with that bank. Now, for an offence under Section 138 NI Act, it is essential that the cheque must have been issued in discharge of legal debt or liability by accused on an account maintained by him with a bank and on presentation of such cheque for encashment within its period of validity, the cheque must have been returned unpaid. The payee of the cheque must have issued legal notice of demand within 30 days from the receipt of the information by him from the bank regarding such dishonor and where the drawer of the cheque fails to make the payment within 15 days of the receipt of the aforesaid legal demand notice, cause of action under Section 138 NI Act arises. Section 139 of the Act raises a statutory presumption that the cheque is issued in discharge of a lawfully recoverable debt or other liability. This presumption is no doubt rebuttable at trial but there is no gain saying that the same favours the complainant and shifts the burden to the drawer of the instrument (in case the same is dishonoured) to prove that the instrument was without any lawful consideration. It is also noteworthy that Section 138 while making dishonour of a cheque an offence punishable with imprisonment and fine also provides for safeguards to protect drawers of such instruments where dishonour may take place for reasons other than those arising out of dishonest intentions. It envisages service of a notice upon the drawer of the instrument calling upon him to make the payment covered by the cheque and permits prosecution only after the expiry of the statutory period and upon failure of the drawer to make the payment within the said period. This Court having noticed the facts of the case and the evidence on the record needs to note the legal principles regarding nature of presumptions to be drawn under Section 139 of the Act and the manner in which it can be rebutted by an accused. Section 118 provides for presumptions as to negotiable instruments. The complainant being holder of cheque and the signature appended on the cheque having not been denied by the Bank, presumption shall be drawn that cheque was issued for the discharge of any debt or other liability. The Court also finds that the trial Court after examining the original copy of cheque, cheque return memo, bank receipt, notice, notice delivery statement and original registry receipt, has found substance in the submission of the complainant and has observed that prima facie case for the offence punishable under Section 138 N.I. Act is made out against the applicant and he has rightly passed the impugned order dated 7th May, 2019 summoning the applicant - this Court does not find any illegality or perversity in the order passed by the Courts below. This Court also observes that plea taken on behalf of the applicant that the present complaint is not maintainable on the ground that sons of opposite party no.2 has stolen his cheques and after committing forgery and playing fraud with the help of same, opposite party no. 2 had presented the same before the Bank, cannot be accepted at this stage of the proceedings, as under the order of the trial court he has only been summoned under the provisions of N.I. Act only. The said plea may be taken and examined during the course of trial not at the pre-trial stage - it is apparent that from November, 2018 to 28th February, 2019 he has slept over his missing cheques and woke up only after service of legal notice dated 6th February, 2019 i.e. on 9th February, 2019 but after 19 days he moved an application before the Bank for stoppage of bank account. Except that, he has taken six months and twenty days to go to Police Station for lodging of the first information report. Therefore, this Court is of the opinion that the said plea has no leg to stand. In the present case, much less to speak of any process alien to law being adopted by the Courts below, as stated above, this Court does not find even any illegality or perversity in the orders passed by the Courts below - application dismissed.

Summary

Issues Involved:
1. Summoning Order Validity
2. Legality of Loan and Cheque Issuance
3. Alleged Theft and Forgery of Cheque
4. Presumptions under Negotiable Instruments Act
5. Judicial Mind Application by Magistrate
6. Abuse of Process of Court
7. Applicability of Case Laws

Detailed Analysis:

1. Summoning Order Validity:
The applicant challenged the summoning order dated May 7, 2019, issued by the Chief Judicial Magistrate, Jalaun, and the subsequent dismissal of the criminal revision by the Sessions Judge, Jalaun, on October 24, 2019. The court found no illegality or infirmity in these orders, stating that the trial court had examined relevant documents and found a prima facie case under Section 138 of the N.I. Act. The revisional court also upheld this decision, noting that the issues raised by the applicant, such as the genuineness of the cheque and signatures, could be examined during the trial.

2. Legality of Loan and Cheque Issuance:
The applicant claimed that the allegations of taking a loan of ?1,90,000 for purchasing a tractor and installing a tube-well were false, arguing that he was living in New Delhi and driving an E-Rickshaw at the time. He also denied issuing the cheque in question. The court noted that the presumption under Section 139 of the N.I. Act is that the cheque was issued for a legally enforceable debt unless proven otherwise. The applicant's claims were deemed insufficient to rebut this presumption at the pre-trial stage.

3. Alleged Theft and Forgery of Cheque:
The applicant alleged that his cheque book was stolen by the complainant's sons, who forged his signature. He claimed to have informed the bank about the missing cheques and stopped payment on February 28, 2019, and later filed a complaint. The court found these claims unconvincing, noting inconsistencies and delays in reporting the theft and forgery. The court emphasized that the bank returned the cheque due to insufficient funds, not mismatched signatures, undermining the applicant's forgery claim.

4. Presumptions under Negotiable Instruments Act:
Sections 118, 138, and 139 of the N.I. Act were discussed, highlighting the statutory presumptions that favor the complainant. The court reiterated that these presumptions are rebuttable, but the burden of proof lies on the accused to show the non-existence of consideration or debt. The applicant's arguments and evidence were found insufficient to rebut these presumptions at this stage.

5. Judicial Mind Application by Magistrate:
The applicant argued that the Magistrate acted mechanically without applying judicial mind. The court rejected this, noting that the Magistrate had considered the original cheque, return memo, bank receipt, notice, and other relevant documents before issuing the summoning order. The revisional court also reviewed these materials and found no error in the Magistrate's decision.

6. Abuse of Process of Court:
The applicant claimed that the criminal proceedings were malicious and an abuse of the court's process. The court dismissed this argument, stating that the applicant's remedy of revision had already been exhausted, and the application under Section 482 Cr.P.C. was essentially a second revision, which is prohibited. The court emphasized that it cannot re-appreciate the same material already considered by the lower courts.

7. Applicability of Case Laws:
The applicant relied on the Supreme Court judgments in Raj Kumar Khurana vs. State (NCT of Delhi) and S.P. Chengalvaraya Naidu (dead) by L.Rs. vs. Jagannath (dead) by L.Rs. The court distinguished these cases based on their facts, noting that the applicant's situation did not align with the circumstances in those precedents. The court found that neither fraud nor forgery by the complainant was established, and the statutory presumptions under the N.I. Act remained unrebutted.

Conclusion:
The court dismissed the application, finding no illegality or perversity in the orders passed by the lower courts. The applicant's claims of theft, forgery, and lack of judicial mind application were rejected, and the statutory presumptions under the N.I. Act were upheld. The court emphasized that the issues raised by the applicant could be examined during the trial, not at the pre-trial stage.