2021 (4) TMI 34 - HC - Indian Laws

Dishonor of Cheque - rebuttal of presumption - offence punishable under Section 138 of the Negotiable Instruments Act - whether the first respondent could rebut the presumption? - HELD THAT - After revisiting the evidence, the answer should be in negative. From the very outset, she had been taking a negative attitude. Even though the lawyer notice was tendered in her correct address, she refused to receive the same. It is a matter of adverse inference. Her first expression of the transaction had come up when the power of attorney holder, PW1 was cross examined. Then she took the stand that the document was given in consideration of ₹ 20,000/-, borrowed by her, that the said amount has already been repaid - The case of PW1 is that the appellant had lent the amount to the first respondent on his assurance. Whatever it may be, once the signature in Ext.P1 stands admitted, it is for her to rebut the presumptions; that has not been attempted. It is trite that the burden of proving a plea of discharge is on the person who raises the contention. Particulars of such repayment are lacking. It also does not stand the reason that, in spite of repaying the amount, she had not taken steps to get back the document alleged to have given as security - The learned counsel for the first respondent argued that the appellant is a fictitious person, such a person is not available and everything was stage managed by PW1. It is true that the first respondent has taken such a plea. But when she was examined as DW1, at the beginning stage itself she has stated that she knew the complainant. After taking such a stand in her chief examination, she cannot be heard to take a contention challenging the identity of complainant. Ext.P1 cheque can be found to be issued in discharge of a legally enforceable liability as seen on its face value. The presumptions available in favour of the complainant are not rebutted. That would attract the offence under Section 138 of the Act. That means the finding of the lower appellate court acquitting the first respondent cannot be sustained - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against divergent findings by trial court and Sessions Judge in a case involving Section 138 of the Negotiable Instruments Act.

Detailed Analysis:

Issue 1: Challenge to Acquittal of First Respondent
The appellant challenged the correctness of the judgment acquitting the first respondent under Section 138 of the Negotiable Instruments Act. The case originated with a complaint alleging the issuance of a dishonored cheque in consideration of a loan. The trial court convicted the first respondent, but the Sessions Court acquitted her, leading to the current appeal.

Issue 2: Examination of Evidence
The power of attorney holder was examined as a witness, and various exhibits were marked. The first respondent admitted her signature on the cheque but provided differing explanations regarding the transaction. The trial court convicted her based on this evidence, while the Sessions Court reversed the decision.

Issue 3: Legal Arguments
The appellant argued that the first respondent's inconsistent stands and failure to receive the notice supported the conviction. The Sessions Court's reliance on a previous case was contested, and the power of attorney holder's role in prosecuting the complaint was highlighted as valid.

Issue 4: Defence's Position
The first respondent's counsel contended that admitting the signature did not imply execution of the cheque. They argued that the appellant failed to prove execution, negating the need for presumptions in favor of the complainant.

Issue 5: Presumptions and Rebuttal
The court considered the presumption under the Negotiable Instruments Act that a signed cheque implies liability unless rebutted. The first respondent's admission of the signature but denial of liability raised questions about the execution and repayment of the loan.

Issue 6: Burden of Proof
The court analyzed whether the first respondent successfully rebutted the presumptions. Her negative attitude, inconsistent statements, and lack of evidence regarding repayment or return of the cheque weakened her defense.

Issue 7: Identity and Discharge Plea
The first respondent's plea of discharge lacked evidence, and her challenge to the appellant's identity was dismissed due to contradictory statements during examination.

Issue 8: Decision and Sentencing
The court found the first respondent liable under Section 138 of the Act due to the unrebuted presumptions and lack of evidence supporting her defense. The acquittal was overturned, and she was sentenced to pay a fine or undergo imprisonment.

In conclusion, the appeal was allowed, and the first respondent's acquittal was overturned in favor of the appellant based on the detailed analysis of evidence and legal arguments presented during the proceedings.