2021 (11) TMI 586 - HC - Indian Laws

Dishonor of Cheque - service of statutory notice u/s 138B of NI Act - acquittal of accused u/s 255(1) of Cr.P.C. - rebuttal of statutory presumption - HELD THAT - The documents produced are very relevant to prove the case of the complainant. When the cheque is issued, there is a presumption under Sections 118 and 139 of the Act that it was drawn for consideration. It is settled that when the accused admits the signature in the cheque and takes a plea that it was issued as security, the burden is upon him to establish the same. The Apex Court in Kalamani Textiles (M/s.) Another v. P. Balasubramanian 2021 (2) TMI 505 - SUPREME COURT has held that once signature is established, it is to be presumed that the cheque was issued in consideration for a legally enforceable debt. At any rate, the complainant has chosen to produce the statement of accounts showing the transaction between the complainant and the accused as well as the resolution authorising PW1 to represent the company - this is a fit case where an opportunity has to be granted to the complainant to prove the said documents in order to prove its case. Hence, the impugned judgment is liable to be set aside and the matter is to be remanded to the court below for fresh disposal. Appeal allowed by way of remand.

Summary

Issues:
Appeal against acquittal under Section 378(4) of Cr.P.C. challenging judgment of Special Judicial First Class Magistrate Court in a prosecution under Section 138 of the Negotiable Instruments Act.

Analysis:
The case involves an appeal against acquittal under Section 378(4) of Cr.P.C. challenging the judgment of the Special Judicial First Class Magistrate Court in a prosecution under Section 138 of the Negotiable Instruments Act. The appellant, a company represented by its Branch Head of Area Sales Office, filed the appeal against the acquittal of the accused, a partnership firm and its partners, in a case involving dishonoured cheques issued towards the discharge of a business transaction liability. The court below found the accused not guilty and acquitted them under Section 255(1) of Cr.P.C. The appellant challenged this judgment, citing discrepancies in the evidence presented during the trial.

During the trial, the court examined witnesses and marked exhibits related to the business transaction and the dishonoured cheques. The appellant produced invoices and cheques as evidence, but the court noted discrepancies in the amount due and the lack of explanation for the difference between the cheque amount and the total invoice amount. The court found that crucial documents, such as the statement of account and documents showing the adjustment of a security amount received, were not produced by the complainant, weakening their case. The defense claimed the cheques were issued as security and misused by the complainant, highlighting the absence of documentation supporting the business transaction and the accounts statement between the parties.

Another contention raised by the defense was regarding the authority of the Branch Head of Area Sales Office to represent the company in the case. The court considered the lack of a resolution authorizing the representative and the discrepancies in the evidence presented. Subsequently, the complainant submitted additional documents, including statements of accounts and a resolution authorizing the representative, to support their case. The court acknowledged the relevance of these documents, emphasizing the presumption under Sections 118 and 139 of the Act regarding cheques issued for consideration and the burden of proof on the accused when claiming the cheques were issued as security.

After reviewing the additional documents and legal precedents, the court concluded that the case required further examination and remanded it to the court below for fresh disposal. The court directed both parties to have the opportunity to present additional evidence and instructed the lower court to dispose of the case within six months. The judgment in the original case was set aside, and the matter was scheduled for further proceedings before the lower court.