2021 (12) TMI 66 - HC - Indian Laws

Dishonor of Cheque - existence of legally enforceable liability upon the petitioner or not - cheque in question had been issued in discharge of any legal liability or not - drawing of presumption or not - Section 138 of NI Act - HELD THAT - Though the complainant during her cross-examination has not been able to state anything regarding the income of her husband and has even feigned ignorance about the Income Tax Returns, but the complainant, who is a widow, may not be knowing about the financial details of her husband and may not be having access to income tax record maintained by her late husband. In any case, even if it is presumed that the amount advanced by the complainant's husband to the petitioner was not shown in the Income Tax Return, the same itself would not wash off the liability of the loanee (petitioner) to repay the loan amount when there is nothing to doubt the factum of issuance of cheque and the story put forth by complainant regarding loan having been advanced by her late husband. The facts of the present case do make out for drawing a presumption as regards the existence of a legal liability in terms of Section 139 of the Act particularly when there is nothing on record to rebut the same. There is a mandate of presumption of existence of liability and upon proof of issuance of cheque the onus shifts to the accused/petitioner to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act. In the instant case, the petitioner has only recorded his statement under Section 313 Cr.P.C. and has not adduced any evidence to rebut the presumption that the cheque was issued for consideration - Once the facts on record remained unrebutted with no substantive evidence of defence of the petitioner to explain the incriminating circumstances appearing in the complaint against him, no error can be said to have been committed by the Courts below. There is certainly no evidence to show that the body writing on the cheque in question is in a different hand or ink and has been made by a person other than the person, who had signed on the cheque. But, that as it may, even if there is any such difference in hand-writing, the same would be immaterial once the signatures on the cheque in question are not disputed - Hon'ble the Supreme Court in BIR SINGH VERSUS MUKESH KUMAR 2019 (2) TMI 547 - SUPREME COURT , has held that if a signed blank cheque is voluntarily presented to a payee towards some payment, the payee may fill up the amount and the other particulars and that such difference in hand-writing ipso-facto would not invalidate the cheque or render its authenticity doubtful. This Court does not find any infirmity in the findings recorded by the trial Court and as upheld by the lower Appellate Court and the same, thus, do not warrant any interference - Revision petition dismissed.

Summary

Issues:
Challenge to conviction under Section 138 of the Negotiable Instruments Act, 1881 based on dishonored cheque.

Analysis:
1. The petitioner challenged his conviction under Section 138 of the Negotiable Instruments Act, 1881, based on a dishonored cheque in an appeal filed before the Court of Additional Sessions Judge, Panchkula. The appeal was dismissed, leading to the petitioner filing a criminal revision before the High Court.

2. The complaint alleged that the petitioner took a loan of ?8 lakhs from the complainant's husband, which was to be repaid through a cheque. The cheque was dishonored due to insufficient funds, leading to the legal proceedings. The petitioner denied taking the loan and claimed the cheque was misused, but no evidence was presented in defense.

3. During the trial, the complainant provided evidence, while the petitioner denied the loan and failed to present any evidence to support his defense. The trial court found the petitioner guilty under Section 138 and sentenced him to imprisonment and compensation.

4. The petitioner's appeal against the conviction was dismissed by the lower appellate court, leading to the current criminal revision before the High Court challenging the judgments on the grounds of lack of enforceable liability and absence of written loan documentation.

5. The petitioner argued that there was no legally enforceable liability to repay the loan, as the complainant's husband never demanded repayment during his lifetime. The absence of written loan documentation and doubts raised during cross-examination were highlighted to challenge the complainant's case.

6. The respondent argued that the petitioner did not dispute his signatures on the cheque, and a presumption of liability exists under Section 139 of the Act. The respondent, being the heir of the complainant's husband, was entitled to pursue the repayment on his behalf.

7. After considering the submissions, the High Court noted that the petitioner did not dispute his signatures on the cheque and failed to provide a convincing explanation for its issuance. The absence of written loan documentation did not negate the liability to repay the loan.

8. The court referenced Section 139 of the Act, which presumes the existence of a liability in favor of the holder of the cheque unless rebutted. The petitioner's failure to provide substantive evidence to rebut this presumption led to upholding the lower courts' decisions.

9. Citing a recent Supreme Court judgment, the court emphasized that the statement recorded under Section 313 Cr.P.C. is not substantive evidence to rebut the presumption of liability. The quality of proof required in cases under Section 138 was discussed to establish the offense.

10. The court concluded that the presumption of liability under Section 139 was not rebutted by the petitioner, and the absence of substantive evidence in defense supported the lower courts' decisions. The lack of objection regarding handwriting on the cheque during trial precluded the petitioner from raising it at a later stage.

11. Referring to a Supreme Court decision, the court clarified that the authenticity of a cheque is not invalidated by differences in handwriting if the signatures are not disputed. The onus remains on the accused to prove the cheque was not issued for a debt or liability.

12. In light of the above analysis, the High Court found no infirmity in the lower courts' findings and upheld the judgments, dismissing the revision petition for lack of merit.