2021 (11) TMI 652 - HC - Indian Laws

Dishonor of Cheque - misuse and misutilization of the cheque for filing the complaint - denial of legal right of appellant - legally enforceable debt or not - rebuttal of presumption or not - HELD THAT - The learned Trial Court rightly appreciated the fact that if the complainant has not returned the amount of 4 lakh of the accused and has not even given the finance that was required no prudent person would have waited without taking any action. It is admitted fact that he neither responded to the notice nor filed any complaint or taken any action against the complainant herein. The accused failed to substantiate wherefrom he brought the amount of 4 lakhs. As against this the complainant through his passbook substantiated withdrawal of amount from the bank for such payment. The learned Trial Court also rightly appreciated the fact that accused admitted signature on the disputed cheque as well as on the receipt. As per opinion of handwriting expert the contents written in the body of cheque or receipt is not in the handwriting of the complainant. As far as the finding recorded by the Appellate Court that complainant is an unregistered moneylender is concerned the same is totally erroneous. None of the witnesses examined by the accused has deposed that they obtained loan on interest or complainant advanced money on interest. On the contrary DW- 1 is silent about moneylending business by the complainant - it appears that as conviction is there under NI Act the said amount advanced by the complainant is held as legally enforceable debt. If the complainant is not earning any additional amount toward interest over the amount advanced to these witnesses this finding of learned Appellate Court that he is unregistered moneylender is totally erroneous. The presumption under section 139 is a rebuttable presumption and the onus is on the accused who raised the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. Where the learned Appellate court disbelieved the defence no question of rebuttal by the accused would arise. So far as showing the said amount in income tax returns is concerned as the amount is duly reflecting in bank account the same will be taken care of by the Income Tax Department and consequences/procedure will follow as per provisions of law. For that reason accused cannot be absolved specifically when both the learned lower courts disbelieved his defence. The order passed by the learned JMFC is well founded and the conclusions arrived at are on proper appreciation of evidence. As such the order passed by the learned Appellate Court is liable to be set aside - appeal allowed - decided in favor of appellant.

Issues Involved:
1. Validity of the conviction under Section 138 of the Negotiable Instruments Act.
2. Legitimacy of the cheque issued by the respondent.
3. Appellate Court's re-appreciation of evidence.
4. Status of the appellant as an unregistered moneylender.
5. Relevance of the cheque amount not being reflected in income tax returns.

Detailed Analysis:

1. Validity of the Conviction under Section 138 of the Negotiable Instruments Act:
The Trial Court convicted the respondent under Section 138 of the Negotiable Instruments Act, sentencing him to six months imprisonment and a fine of ?1.5 lakhs in addition to the cheque amount of ?4,00,000. The respondent's cheque was dishonored due to the account being closed, leading to the appellant filing a complaint.

2. Legitimacy of the Cheque Issued by the Respondent:
The respondent claimed the appellant had obtained a blank cheque and receipt from him, promising to pay ?40,00,000 but did not advance the money and instead misused the cheque. The appellant, however, provided evidence including the cheque, return memo, and legal notice, substantiating the claim of a legally enforceable debt.

3. Appellate Court's Re-appreciation of Evidence:
The Appellate Court quashed the Trial Court's judgment, leading to the present appeal. The appellant argued that the Appellate Court's re-appreciation of evidence was unwarranted, as the Trial Court had duly considered the material and assessed the evidence in accordance with the law. The Appellate Court's focus on the cheque's handwriting and the non-reflection of the amount in income tax returns was deemed irrelevant by the appellant.

4. Status of the Appellant as an Unregistered Moneylender:
The Appellate Court's conclusion that the appellant was an unregistered moneylender was challenged. The appellant argued that none of the witnesses testified that the amount was advanced on an interest basis, and the evidence did not support the claim of moneylending.

5. Relevance of the Cheque Amount Not Being Reflected in Income Tax Returns:
The appellant contended that the non-reflection of the cheque amount in income tax returns was not fatal to the case. The Trial Court had accepted the appellant's evidence, including the bank passbook substantiating the withdrawal of ?4 lakhs, and the respondent's admission of his signature on the cheque and receipt.

Conclusion:
The High Court found that the Trial Court had rightly appreciated the evidence, including the appellant's substantiation of the withdrawal of ?4 lakhs and the respondent's failure to substantiate his defense. The Appellate Court's finding that the appellant was an unregistered moneylender was considered erroneous, as none of the witnesses supported this claim. The High Court emphasized that the statutory presumption under Section 139 of the Negotiable Instruments Act, which mandates that the cheque was for the discharge of a debt or liability, was not rebutted by the respondent.

Order:
a) The appeal was allowed.
b) The judgment and order of the Additional Sessions Judge were quashed and set aside.
c) The judgment and order of the Judicial Magistrate First Class, Ponda, were confirmed.

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