2021 (7) TMI 819 - HC - Indian Laws

Dishonor of Cheque - Complaint was dismissed hold that, complainant failed to prove the guilt of the accused beyond reasonable doubt - rebuttal of presumption - cheque got executed by exercising force - quantum of amount lent also in dispute - accused has not chosen to step into the witness box to depose regarding his contention - HELD THAT - It is the settled proposition of law that when the complainant is successful in proving issuance of cheque and its dishonour, unless the accused repays the cheque amount, the offence under Section 138 of N.I. Act is complete and the presumption under Section 139 of N.I. Act arises. In Rangappa v. Sri. Mohan 2010 (5) TMI 391 - SUPREME COURT , the Full Bench of the Hon'ble Apex Court considered its earlier verdict in Krishna Janardhan Bhat v. Dattatraya G. Hegde 2008 (1) TMI 827 - SUPREME COURT and categorically held that the presumption under Section 139 of the N.I. Act does indeed include the existence of the legally enforceable debt or liability. Thus, it is clear that presumption under Section 139 of N.I. Act includes the existence of legally enforceable debt or liability and it is for the accused to rebut the same. In the present case, as the accused has categorically admitted issuance of the cheque-Ex. P.1. He took a specific defence that the cheque in question was obtained by the complainant by exercising force and that the same was a blank cheque. The complainant misused the blank cheque and filed a false complaint. Even though a specific defence is taken by the accused, he has not probabilised the same. When the accused admits issuance of the cheque in favour of the complainant, the presumption under Section 139 of N.I. Act arises and unless the accused rebuts the presumption, he is liable for conviction. The impugned judgment of acquittal passed by the trial Court deserves to be set aside - criminal appeal allowed.

Summary

Issues Involved:
1. Validity of the trial court's judgment of acquittal.
2. Proof of the guilt of the accused under Section 138 of the Negotiable Instruments Act (N.I. Act).
3. Rebuttal of the presumption under Section 139 of the N.I. Act.
4. Evidentiary burden on the accused.

Detailed Analysis:

1. Validity of the trial court's judgment of acquittal:
The appellant/complainant sought to set aside the trial court's judgment dated 20.12.2017, which acquitted the respondent/accused in C.C. No. 50/2012. The trial court held that the complainant failed to prove the guilt of the accused beyond reasonable doubt. The High Court examined whether this judgment required interference.

2. Proof of the guilt of the accused under Section 138 of the N.I. Act:
The complainant alleged that he paid ?2,75,000 to the accused for providing gangmen for cutting and transporting sugarcane. The accused issued a cheque for the same amount, which was dishonored due to insufficient funds. Despite a legal notice, the accused did not repay the amount. The trial court took cognizance, and the accused pleaded not guilty. The complainant provided evidence, including the dishonored cheque (Ex. P.1), bank endorsement (Ex. P.2), legal notice (Ex. P.3), postal acknowledgment (Ex. P.4), and reply notice (Ex. P.5).

3. Rebuttal of the presumption under Section 139 of the N.I. Act:
The accused claimed that only ?10,000 was lent, and the cheque was forcibly taken. He did not cross-examine the complainant's witness (PW. 2) or provide evidence. The High Court noted that the accused admitted issuing the cheque, triggering the presumption under Section 139 of the N.I. Act. The accused's defense was inconsistent and unsubstantiated, failing to rebut the presumption.

4. Evidentiary burden on the accused:
The High Court referenced legal precedents, including Rangappa v. Sri. Mohan and M/S. Kalamani Tex and Another v. P. Balasubramanian, affirming that the presumption under Section 139 includes the existence of a legally enforceable debt. The accused must rebut this presumption by a preponderance of probabilities. The trial court erred by not applying this legal standard, leading to an incorrect acquittal.

Conclusion:
The High Court found that the trial court misapplied legal principles and failed to recognize the accused's failure to rebut the presumption under Section 139. Consequently, the judgment of acquittal was set aside, and the accused was convicted under Section 138 of the N.I. Act. The accused was fined ?3,00,000, with ?2,75,000 to be paid as compensation to the complainant. In default, the accused would undergo rigorous imprisonment for one year.