2021 (3) TMI 1134 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - legally enforceable debt or not - failure to rebut the presumption - HELD THAT - The complainant has proved his case by letting in cogent evidence. Whereas, the accused has failed to rebut the presumption u/s.139 of N.I.Act to prove his case. Though the accused had examined his brother as D.W.1, nothing is elicited. Further, the evidence of D.W.1 had infact fortified the fact that the accused had also constructed a house. It is a case of the complainant that the accused had borrowed money towards loan while he was constructing house and that in order to discharge his liability, he had issued a cheque. The the trial Court as well as the Appellate Court finding that the accused has not rebutted the presumption found him guilty for the offence under Section 138 of Negotiable Instruments Act and had rightly convicted him. The appeal of the accused was dismissed. However the revision of the complainant was allowed and while confirming the conviction the sentence was modified to six months simple imprisonment and the compensation was modified to ₹ 5,00,000/-. This Court finds no infirmity or illegality in the judgments passed by the Courts below. Criminal Revision cases stand dismissed.

Summary

Issues:
Accused's liability for dishonored cheque under Section 138 of Negotiable Instruments Act, 1881; Accused's defense as a guarantor; Conviction and sentence under Section 255(2) Cr.P.C.; Appeal against conviction and sentence; Revision petition for enhancement of sentence; Burden of proof under Section 139 of N.I. Act; Rebuttal of presumption by accused; Revisional jurisdiction of High Court.

Analysis:
The case involves the accused borrowing ?8,00,000 from the complainant for house construction, issuing a dishonored cheque, and subsequent legal proceedings under Section 138 of the Negotiable Instruments Act, 1881. The accused, questioned under Section 251 Cr.P.C., denied the accusation. The complainant presented evidence including the dishonored cheque and statutory demand notice. The accused's defense as a guarantor was based on lack of legally enforceable debt. The trial Court convicted the accused, directing compensation payment or imprisonment.

In the appeal, the accused contended the loan was for his brother's house construction, presenting his brother as a witness. The complainant argued the accused borrowed the amount and failed to rebut the presumption under Section 139 of N.I. Act. The Appellate Court modified the sentence to six months imprisonment and ?5,00,000 compensation. The accused filed Criminal Revision cases against the orders.

The High Court analyzed the evidence, emphasizing the complainant's cogent proof and the accused's failure to rebut the presumption under Section 139 of N.I. Act. Citing APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers, the Court upheld the conviction and sentence modifications. The Court dismissed the Revision cases, directing the accused's imprisonment and compensation payment as per the lower Court's judgment.

In conclusion, the High Court affirmed the lower Court's decision, finding no infirmity in the judgments. The accused's defense as a guarantor was not accepted, and the burden of proof under Section 139 of N.I. Act was not discharged. The Court highlighted the reversal of onus clause in the Act and upheld the conviction and sentence modifications, dismissing the Revision cases.

This detailed analysis covers the issues of liability for dishonored cheque, defense as a guarantor, burden of proof under the N.I. Act, and the High Court's revisional jurisdiction, providing a comprehensive overview of the legal judgment.