2021 (6) TMI 221 - HC - Indian Laws

Dishonor of Cheque - rebuttal of presumption - defence of the accused is that the impugned pronote and cheque were given to the complainant only towards security for loan advanced by one of his friends, which has been misused by the complainant - 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. In this case, though the accused had accepted the signature in the disputed cheque and the pronote, it is the case of the accused in defence that no consideration has been passed based on the Ex.P1 Ex.P2 and that the complainant had not proved the passing of consideration by adducing sufficient evidence and that the complainant had also not proved that he had sufficient sources of income to lend the loan amount of ₹ 2,00,000/- as alleged in the complaint and that the attester of the pronote has not been examined. The statutory presumptions u/s.118 and 139 of N.I.Act make it clear that the burden is not on the complainant to prove his case, whereas, the burden is on the accused to prove his case. In this case, as stated above that the complainant has proved his case by letting in sufficient evidence, however, the accused having admitted the signatures in the pronote and the cheque has not let in any evidence in rebuttal. The Appellate Court while confirming the conviction, modified the sentence to six months instead of one year as imposed by the trial Court and as far as awarding of compensation is concerned, the same was confirmed. This Court finds no infirmity or illegality in the judgments passed by the Courts below - Revision dismissed.

Summary

Issues Involved:
- Dispute over loan repayment and cheque dishonor
- Conviction under Section 138 of Negotiable Instruments Act
- Appeal against conviction and modification of sentence
- Criminal Revision under Section 397 r/w 401 Cr.P.C.

Issue 1: Dispute over loan repayment and cheque dishonor:
The complainant alleged that the accused borrowed a sum of ?2,00,000 as a hand loan and executed a Promissory Note agreeing to repay with 24% interest. Despite demands, the accused did not repay the amount or the interest. The accused issued a cheque for ?2,50,000, which bounced due to insufficient funds. The complainant sent a legal notice, but the accused did not respond or repay the amount, leading to a private complaint under Section 138 of the Negotiable Instruments Act.

Issue 2: Conviction under Section 138 of Negotiable Instruments Act:
The trial court found the accused guilty under Section 138 of the NI Act and sentenced him to one year imprisonment and compensation. On appeal, the sentence was reduced to six months, but the conviction was upheld. The accused challenged this through a Criminal Revision, disputing the evidence presented by the complainant and questioning the calculation of the cheque amount compared to the promissory note.

Issue 3: Appeal against conviction and modification of sentence:
The accused contended that the promissory note and cheque were not issued to discharge a legally enforceable debt, challenging the evidence provided by the complainant. In contrast, the complainant argued that the accused failed to rebut the presumption under Section 139 of the NI Act, which shifts the burden of proof to the accused once the issuance and signature on the cheque are admitted.

Issue 4: Criminal Revision under Section 397 r/w 401 Cr.P.C.:
The High Court, while considering the Revision, noted that it cannot act as a second appellate court in cases with concurrent findings of fact. The accused's defense that the promissory note and cheque were security for a loan from a friend was not substantiated, and the complainant's evidence, including the legal notice and cheque dishonor, was found to be sufficient to establish the debt and the accused's liability.

The High Court dismissed the Criminal Revision, upholding the conviction and modified sentence imposed by the lower courts. The accused's failure to rebut the presumption under Section 139 of the NI Act, combined with the lack of evidence presented in defense, led to the rejection of his appeal. The Court emphasized the importance of proving a legally enforceable debt in cases under Section 138 of the NI Act and affirmed the lower courts' decisions based on the evidence and legal principles applied.