2021 (9) TMI 40 - HC - Indian Laws

Dishonor of cheque - legally enforceable debt - rebuttal of presumption - preponderance of probabilities - summary of the case of the complainant in the Trial Court was that, the accused was known to him for the previous ten years to the date of the complaint and both of them were friends - HELD THAT - Since the accused is expecting the complainant to produce some documents to prove the loan in question which is for a sum of ₹ 3,00,000/-, equally well, the accused is also expected to retain certain documents towards the alleged repayment of the previous alleged loan of ₹ 50,000/-. However, since it is the accused who has taken a contention that he has taken a previous loan from the complainant, which is ₹ 50,000/- and has repaid the said loan and also has taken a contention that the cheque in question was given as a security at that point of time, then, it is for the accused to produce cogent evidence, either oral or documentary and to make out a case at least on the case of preponderance of probabilities. However, the accused, except his statement in the form of suggestion to PW-1 and through his evidence as DW-1, has not produced any corroborative material or evidence - the sole defence of the accused that the cheque in question was given to the complainant as a security in 2006 and the same was misused by the complainant in the year 2008, does not stand established. Added to this, admittedly, the accused has not taken any further action for the recovery of the said cheque from the alleged date of repayment, till the said cheque is alleged to have been misused by the complainant which was in the year 2008. No legal notice has been admittedly given to the complainant from the accused's side. No action for recovery, including lodging of any Police complaint has been initiated by him - the contention of the learned counsel for the petitioner/accused that, the accused has issued the cheque in question as a security to the complainant towards an earlier loan transaction in the year 2006, does not gain support to believe the same. Both the Trial Court as well as the Sessions Judge's Court have rightly held that the complainant has proved the alleged guilt against the accused, whereas, the accused could not able to make out a case at least on preponderance of probabilities. Accordingly, the Trial Court has proceeded to convict the accused for the offence punishable under Section 138 of the N.I. Act, which was further confirmed by the learned Sessions Judge's Court. Since the said finding of the Trial Court and the Sessions Judge's Court has led them to convict the accused and also the order on sentence pronounced by the Trial Court, which is proportionate to the gravity of the proven guilt against the accused, the impugned judgments cannot be called as perverse, erroneous or illegal, warranting any interference at the hands of this Court. The Criminal Revision Petition stands dismissed as devoid of any merit.

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.
2. Rebuttal of presumption under Section 139 of the N.I. Act.
3. Validity of the defense regarding the cheque issued as security.
4. Financial capacity of the complainant to lend the loan amount.
5. Legality and correctness of the judgments by the Trial Court and Sessions Judge's Court.

Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881:
The complainant alleged that the accused had borrowed ?3,00,000 in April 2006 and issued a cheque dated 28-05-2008 towards repayment. The cheque was dishonored with the endorsement "Exceeds Arrangement." The complainant issued a legal notice demanding payment, which the accused replied to but did not pay, leading to the filing of the criminal case under Section 138 of the N.I. Act.

2. Rebuttal of presumption under Section 139 of the N.I. Act:
The court noted that the presumption under Section 139 of the N.I. Act is rebuttable. The accused contended that the cheque was given as a blank signed cheque for a previous loan of ?50,000, which was repaid, but the cheque was misused. The court emphasized that mere statements and suggestions without corroborative evidence are insufficient to rebut the presumption.

3. Validity of the defense regarding the cheque issued as security:
The accused's defense was that the cheque was issued as security for a loan of ?50,000 taken in 2006, which was repaid with interest. However, the court found this defense unsubstantiated as the accused failed to provide any documentary evidence or take any action to recover the alleged security cheque. The court highlighted the lack of details about the loan and repayment, and the absence of any complaint or legal action by the accused to recover the cheque.

4. Financial capacity of the complainant to lend the loan amount:
The accused questioned the complainant's ability to lend ?3,00,000. The court found that the complainant had sufficient financial capacity, supported by his agricultural income, pension, and other financial resources. The complainant's financial capability was further corroborated by the accused's own admission that the complainant retained large sums of cash.

5. Legality and correctness of the judgments by the Trial Court and Sessions Judge's Court:
Both the Trial Court and Sessions Judge's Court found the accused guilty under Section 138 of the N.I. Act. The court held that the accused failed to rebut the presumption of a legally enforceable debt and that the complainant had proven the accused's guilt. The judgments were deemed neither perverse nor erroneous, and the sentence proportionate to the gravity of the offense.

Conclusion:
The Criminal Revision Petition was dismissed as devoid of merit. The judgments of the Trial Court and Sessions Judge's Court were upheld, confirming the conviction and sentence of the accused under Section 138 of the N.I. Act. The court ordered the transmission of the order to both the Trial Court and the Sessions Judge's Court along with their respective records.

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