2021 (4) TMI 784 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - liability to pay exist or not/ enforceable debt or not - cheque issued on force and threat or not - Section 138 of the N.I. Act - HELD THAT - The cheque vide Ext.1 was admittedly drawn by D.W.1, the accused/ respondent No.1 for payment of an amount of ₹ 1,15,000/-, which was returned dishonoured by the Union Bank of India, (U.B.I.) Tinsukia Branch to the complainant/ appellant vide Ext.2, the letter and Ext.3, the bank note. Whether the cheque vide Ext.1 was issued in discharge of a debt/ liability of the accused/ respondent No.1? - HELD THAT - There is no denying the fact that admittedly the accused/ respondent No.1 issued the cheque without the name of the payee, which the complainant/ appellant (payee) himself filled up and presented in bank for encashment. The evidence shows that the cheque amount was payable in terms of a written contingent agreement, copy of which is, of course, not exhibited, in the event of performance of the function by the artists through Progoti Enterprise, Mumbai, which enterprise was not even impleaded as accused/ respondent or its representative examined by either of the parties in the case. The complainant has not event established that he was the authorized signatory of the said enterprise to receive the cheque on its behalf and that the accused/ respondent No.1, being the President of the said unregistered N.G.O namely, Digboloy was personally liable under any debt or liability towards the complainant/ appellant on the date of issue of the cheque in question wherein he himself admittedly entered his name in different ink. This Court sees no reason to reverse the finding of acquittal of the accused/ respondent No.1 of the offence subscribing substituted views expressed by the Learned Trial Court - Appeal dismissed.

Summary

Issues:
Appeal under Section 378(4) of the Criminal Procedure Code against the judgment and order of the Chief Judicial Magistrate dismissing the complaint and acquitting the accused under Section 138 of the Negotiable Instrument Act.

Analysis:
The complainant alleged that the accused engaged him for a musical show and issued a cheque for payment, which was dishonored. The accused denied liability, claiming the cheque was issued under duress. The trial court acquitted the accused after examining witnesses for both sides.

The trial court considered five key points: the existence of a lawful debt, issuance of the cheque for discharging the debt, liability for dishonoring the cheque, commission of an offense under the N.I. Act, and entitlement to compensation by the complainant.

Section 138 of the N.I. Act requires a legally enforceable debt, issuance of the cheque for debt discharge, and return of the cheque due to insufficient funds. The accused issued a cheque that was dishonored by the bank. The complainant argued the cheque was issued to settle a debt, supported by evidence of event arrangements and dishonor reasons.

Witness testimonies revealed discrepancies in the event agreement, payment terms, and issuance circumstances of the cheque. The accused claimed the cheque was issued without a payee's name, intending to fill it post-event. However, the event did not occur as planned, leading to conflicting accounts between the parties.

Under Section 139 of the N.I. Act, a presumption exists that a cheque is for debt discharge unless proven otherwise. In this case, the complainant failed to establish the debt's existence at the cheque's issuance. The accused's actions, including leaving the payee field blank, raised doubts about the debt's nature and payment intentions.

The court concluded that the complainant did not prove the debt's existence at the cheque's issuance, nor the accused's personal liability. The lack of evidence linking the accused to the debt or the event's contractual obligations led to the dismissal of the appeal. The judgment upheld the trial court's decision to acquit the accused.

In light of the evidence and legal principles, the High Court dismissed the appeal, affirming the acquittal of the accused under Section 138 of the Negotiable Instrument Act.