2020 (12) TMI 62 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - offence punishable under Section 138 of the NI Act or not - existence of debt and liability or not - rebuttal of presumptions - Sections 118 and 139 of the NI Act - HELD THAT - It is well settled law that when concurrent findings of facts rendered by the trial court and the appellate court are sought to be set aside in revision, the High Court does not, in the absence of perversity, upset factual findings arrived at by the two courts below. It is not for the revisional court to re-analyse and reinterpret the evidence on record in a case, where the trial court has come to a probable conclusion. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the NI Act for the discharge, in whole or in part, of any debt or other liability. In the case at hand, the accused has no case that she has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that unfilled cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability. Both the trial court and the appellate court rightly held that the burden was on the accused to disprove the initial presumption under Sections 118 and 139 of the NI Act. The burden is not discharged rightly. The complaint was filed before the trial court in 2006. The complainant has been prosecuting this case for the last 14 years. The accused has not adduced rebuttal evidence before the trial court. It is not just and proper to remand the case for retrial on the strength of the additional documents produced. The accused has been conducting this criminal case for the last 14 years. Considering the facts and circumstances, it is just and proper to modify the sentence awarded by the two courts below by sustaining the conviction imposed - criminal revision petition is partly allowed.

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Validity of the cheque and presumption under Sections 118 and 139 of the NI Act.
3. Admissibility of additional evidence.
4. Sentence modification.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The criminal revision petition challenges the judgment dated 28.03.2012 by the First Additional Sessions Court, Thiruvananthapuram, which confirmed the conviction under Section 138 of the NI Act but modified the sentence. The accused had issued a cheque for ?70,000, which was dishonored due to insufficient funds. Despite statutory notice, the accused denied liability. The trial court convicted the accused, and the appellate court partially upheld the conviction, modifying the sentence to imprisonment till the rising of the court and a compensation of ?75,000, with a default clause of three months' simple imprisonment.

2. Validity of the Cheque and Presumption under Sections 118 and 139 of the NI Act:
The complainant alleged that the cheque was issued for a legally enforceable debt. The accused contended that the cheque was given as security for a chitty transaction involving his father and the complainant's wife. The trial court found the execution of the cheque and its dishonor proved. Under Sections 118 and 139 of the NI Act, there is a presumption that the cheque was issued for discharge of a debt or liability unless proved otherwise. The accused admitted the signature on the cheque but failed to provide evidence to rebut the presumption of consideration and liability.

3. Admissibility of Additional Evidence:
During the revision, the accused sought to introduce additional documents to prove the chitty transaction and repayment. The court noted that the power under Section 391 of the Cr.P.C. allows taking additional evidence to prevent miscarriage of justice. However, the court found that the non-production of the reply notice and acknowledgment was not material. The accused's contention that the cheque was issued as security and the subsequent demand for exorbitant interest was not substantiated with cogent evidence.

4. Sentence Modification:
The court observed that concurrent findings of fact by the trial and appellate courts should not be disturbed unless there is perversity. The accused failed to discharge the burden of proof to rebut the presumption under Sections 118 and 139 of the NI Act. Given the prolonged litigation of 14 years, the court found it unjust to remand the case for retrial. The conviction was upheld, but the sentence was modified. The accused was sentenced to pay a fine of ?70,000, with a default clause of three months' simple imprisonment. Considering the Covid-19 pandemic, the accused was given six months to pay the fine, which would be disbursed to the complainant as compensation.

Conclusion:
The criminal revision petition was partly allowed. The conviction under Section 138 of the NI Act was confirmed, but the sentence was modified to a fine of ?70,000, with a six-month period for payment due to the pandemic. Failure to pay the fine would result in three months' simple imprisonment. The records were directed to be sent back to the trial court for execution of the sentence.

← Previous Next →