2020 (9) TMI 1028 - HC - Indian Laws

Dishonor of Cheque - Acquittal of accused - Offence u/s 138 - Presumption u/s 139 - Advance given for purchase of Tractor - delivery of tractor and subsequent issue of cheques are in dispute - HELD THAT - It is not in dispute that the accused was intending to purchase a Tractor, as such, he approached the complainant in that regard. It is also not in dispute that in connection with purchase of a Tractor, the accused paid in total a sum of ₹ 20,000/- to complainant as an advance amount towards the purchase value of the Tractor. In that connection, the accused himself has made a suggestion to PW-1 in his cross-examination, which suggestion has been admitted as true by PW-1/complainant. Therefore, it is established that the accused had approached the complainant for purchasing a Tractor from him and in that regard, had paid an advance amount - primarily when the issuance of a cheque is established, then, a presumption arises in favour of the drawer of the instrument or holder in due course of the instrument about there being in existence a legally enforceable debt. However, the said presumption is rebuttable. In the instant case, the said aspect has to be seen with two dimensions. First, whether such a presumption has been appropriately rebutted by the accused. Second, whether the complainant was the payee of the instrument or its holder in due course. The presumption about the existence of a legally enforceable debt stands in favour of the complainant. However, the said presumption is rebuttable. In order to rebut the said presumption, though it is not necessary that the accused has to necessarily enter the witness box and lead the evidence, it is suffice if he could able to rebut the presumption even in the cross-examination of the complainant (PW-1) or through other cogent evidence. In the instant case, admittedly, the accused has not entered the witness box by himself nor examined any witnesses from his side. He has not even produced any documents and got them marked as exhibits from his side. However, he has subjected the complainant to a detailed cross-examination. In the instant case, as being repeatedly observed, the complainant himself has categorically stated that the complaint was filed in his personal capacity. As such, without looking into any other aspect, it can be said that the cheque was issued to a firm which has not been made over to or endorsed to anyone including the present complainant and the present complaint is instituted by the complainant in his personal capacity. As such, the very complaint itself is not maintainable. The Trial Court having observed these aspects, though with other reasons, since has arrived at a correct conclusion of acquitting the accused for the alleged offence, there are no reason to set aside the said judgment of acquittal and to interfere in the judgment under appeal - appeal dismissed.

Summary

Issues Involved:
1. Whether the complainant has proved that the accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
2. Whether the judgment of acquittal under appeal deserves interference by the High Court.

Detailed Analysis:

Issue 1: Proof of Offence under Section 138 of the Negotiable Instruments Act, 1881

The complainant alleged that the accused issued a cheque for ?4,00,922/- towards the balance payment for a Tractor purchased from the complainant's firm, Sri Venkateshwara Tractors. The cheque was dishonored due to insufficiency of funds. The complainant issued a legal notice demanding payment, which the accused did not respond to, leading to the filing of the complaint.

The accused contested the claim, disputing the delivery of the Tractor and the existence of a legally enforceable debt. The accused did not deny issuing the cheque but argued that no Tractor was delivered, and thus no debt existed.

The High Court noted that the presumption under Section 139 of the N.I. Act operates in favor of the complainant, indicating the existence of a legally enforceable debt. However, this presumption is rebuttable. The accused, through cross-examination, disputed the delivery of the Tractor and the authenticity of the invoice cum delivery challan (Ex. P-10). The High Court found several discrepancies in Ex. P-10, including the lack of make and model details, unfilled proof of delivery sections, and the disputed signature of the accused.

The complainant's failure to produce Ex. P-10 at the initial stage and the unexplained discrepancy in the sale consideration further weakened the complainant's case. The High Court concluded that the presumption under Section 139 was rebutted, and the complainant failed to prove the existence of a legally enforceable debt.

Issue 2: Interference with the Judgment of Acquittal

The High Court examined whether the trial court's judgment of acquittal deserved interference. The trial court had acquitted the accused, noting the complainant's failure to establish the delivery of the Tractor and the existence of a legally enforceable debt.

The High Court agreed with the trial court's findings, emphasizing that the complaint was filed by the complainant in his personal capacity, not on behalf of the firm, Sri Venkateshwara Tractors. The complainant's own testimony confirmed this, and the alleged partnership deed (Ex. P-11) was found to be dubious.

The High Court referenced the case of Om Shakthi SC/ST & Minority Credit Co-operative Society Ltd. Vs. M. Venkatesh, which held that a complaint by a firm, society, or company must be authorized by the entity. In this case, the complaint lacked such authorization, rendering it non-maintainable.

The High Court found no reason to interfere with the trial court's judgment of acquittal, as the complainant failed to prove the essential elements of the offence under Section 138 of the N.I. Act.

Conclusion:
The High Court dismissed the appeal, confirming the trial court's judgment of acquittal. The complainant did not prove the existence of a legally enforceable debt, and the complaint was not maintainable as it was filed in a personal capacity without proper authorization from the firm.

Order:
1. The appeal is dismissed as devoid of merit.
2. The impugned judgment of acquittal dated 09-06-2010 in C.C. No. 730/2009 is confirmed.
3. Registry to transmit a copy of this judgment along with Trial Court records to the Trial Court without delay.