2021 (6) TMI 994 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - acquittal of the accused - rebuttal of presumptions - Sections 118 and 139 of Negotiable Act - HELD THAT - Exts. D5 and D6 were highlighted by the respondent to indicate the prevaricating stands taken by the appellant before the trial court and the civil court. When examined as PW1 before the trial court, the appellant stated that the Ext. P1 was brought prepared and signed before him. But before the civil court he said that the entire entries in Ext. P1 cheque were inserted before him. So, on this aspect also the appellant has taken different stands. In the circumstances, the trial court cannot be found fault with for disbelieving such a version The 1st respondent has no case that he had any monetary transaction with the appellant, but has stated specifically in Ext. D1, that the Ext. P1 was handed over to Surendran without incorporating the name of the payee and putting the date and that, Surendran had facilitated it to misuse the same. The presumptions under Sections 118 and 139 of the Act can be drawn in favour of the complainant only if the execution of the cheque is admitted or proved. Here, the 1st respondent has denied its execution and has given his own version as to how the document had come into existence. Exts. D2 and D3 documents have to be appreciated in this context. Admittedly the 1st respondent and DW1 had some vehicle deal, they jointly owned a Tempo Traveller and an agreement like Ext. D2 was executed while they had parted company. DW1 also admitted that an amount of ₹ 1,92,500/- was due to him, while executing such an agreement two cheques drawn on Punjab National Bank were handed over to him, for ₹ 1,92,000/-. It is the common case that the transaction between DW1 and the 1st respondent has come to an end. The appellant has failed to make out an offence under Section 138 of the Act. Thus the impugned judgment does not warrant interference in appeal - Appeal dismissed.

Issues Involved:
1. Acquaintance and transaction between the appellant and the 1st respondent.
2. Legitimacy of the cheque issued by the 1st respondent.
3. Presumptions under Sections 118 and 139 of the Negotiable Instruments Act.
4. Consistency of the appellant's statements.
5. Relevance of civil court proceedings and judgments.

Issue-wise Detailed Analysis:

1. Acquaintance and Transaction Between the Appellant and the 1st Respondent:
The appellant claimed that the 1st respondent borrowed ?1,00,000 from him on 10.04.2007 and issued a cheque on 01.11.2007, which was dishonored due to insufficient funds. The 1st respondent denied any acquaintance with the appellant and contended that the cheque was handed over to Surendran in a separate vehicle transaction. The court found no evidence of any previous association between the appellant and the 1st respondent, making it improbable that such a significant amount was lent without any security.

2. Legitimacy of the Cheque Issued by the 1st Respondent:
The 1st respondent admitted his signature on the cheque but denied issuing it to the appellant. He claimed that the cheque was given to Surendran without the name of the payee or date, and it was misused. The court noted that the appellant's claim of lending ?1,00,000 without any documentation or security was doubtful, especially in light of the lack of evidence proving any previous association between the parties.

3. Presumptions Under Sections 118 and 139 of the Negotiable Instruments Act:
The appellant argued that the court should have drawn presumptions under Sections 118 and 139 of the Act in his favor since the 1st respondent admitted his signature on the cheque. However, the court held that these presumptions could only be drawn if the execution of the cheque was admitted or proved. Since the 1st respondent provided a plausible explanation for the cheque's existence and denied its execution in favor of the appellant, the court found the appellant's argument unconvincing.

4. Consistency of the Appellant's Statements:
The court observed inconsistencies in the appellant's statements before the trial court and the civil court. The appellant initially denied any acquaintance with Surendran but later admitted that Surendran was a relative. Additionally, the appellant's statements regarding the preparation and signing of the cheque were contradictory. These inconsistencies led the court to doubt the appellant's credibility.

5. Relevance of Civil Court Proceedings and Judgments:
The appellant had filed a civil suit for the realization of money based on the same cause of action, which was dismissed. The court noted that the civil court's verdict was relevant under Section 42 of the Evidence Act. The appellant's appeal against the civil court's judgment was also dismissed for non-appearance. This further weakened the appellant's case, as the civil court's findings supported the 1st respondent's version of events.

Conclusion:
After re-evaluating the evidence and circumstances, the court concluded that the appellant failed to prove the transaction as alleged. The appellant's lack of evidence regarding the acquaintance and transaction, the 1st respondent's consistent version of events, and the civil court's judgment collectively led the court to uphold the trial court's decision. The appeal was dismissed, and the court noted that the case was fit for invoking provisions under Section 250 of the Cr.P.C., although no argument was raised on this point.

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