2022 (1) TMI 5 - HC - Indian Laws

Dishonor of Cheque - insufficient fund - preponderance of probabilities - failure to substantiate that the demand notice was served upon the accused within statutory period of 30 days - complainant also had failed to establish that she had any enforceable debt to the accused - acquittal of the accused - HELD THAT - Firstly, after going through the demand notice dated 02.03.2015, it transpires that learned Advocate on instruction of the complainant had written that she submitted the cheque on 12.01.2015 for encashment, but, on the same date, the banker of the accused had issued a returned Memo stating inter alia that as the fund was insufficient, the cheque was returned back. In the said demand notice, the complainant did not state that she was out of station at the relevant point of time. The complainant is found to be very categorical in her statement that on the same date i.e. on 12.01.2015 when she deposited the cheque to her banker, on the same day, she came to learn about the dishonour of the said cheque. In such circumstance, in my opinion, the complainant ought to have established the fact that she was out of station at the relevant point of time and she returned back on 31.01.2015. But, it is noticed that she has not adduced any such evidence in order to prove her absence during that period and staying her at a place other than that of her permanent residence at Agartala and she received the information about the dishonour of cheque only on 31.01.2015. One more striking point is that, usually, after receipt of the returned Memo intimating the dishonour of cheque, the banker would intimate the person who deposits the cheque for encashment, but, the complainant has not brought on record the said intimation given by her banker i.e. SBI, the reason best known to her. It is also surfaced in her cross-examination that she has categorically stated that it is a fact that I have no business relation with the accused. In view of such statements made by the complainant at the time of her cross-examination, there was obvious reason for the trial court to come to a finding that the complainant has failed to establish her case that she had any business relation with the accused - it is settled proposition of law that for rebutting the fact that might lead to the presumption under Section 139 of the N.I. Act, the standard of proof is of preponderance of probabilities, which the accused in the present case has been able to rebut. The instant appeal stands dismissed.

Summary

Issues:
Acquittal under Section 138 of N.I. Act based on failure to serve demand notice within statutory period and establish enforceable debt.

Detailed Analysis:

1. Issue of Non-Service of Demand Notice within Statutory Period:
- Complainant filed a complaint under Section 138 of the N.I. Act for dishonour of a cheque.
- Accused acquitted by the trial court due to failure to prove service of demand notice within the statutory period of 30 days.
- Complainant argued that cheque was issued within the statutory period as per Section 138.
- Trial court held that demand notice issued after 30 days of dishonour was a fatal flaw in the case.
- High Court noted that complainant failed to establish being out of station during the relevant period, crucial for issuing notice.

2. Issue of Establishing Business Relationship and Debt:
- Trial court found complainant's admission of business relationship with accused as damaging to her case.
- Complainant's statement about learning of cheque dishonour on the same day of deposit raised doubts.
- Lack of documentary proof of being out of station and absence of evidence supporting business relation with accused weakened complainant's case.
- High Court emphasized the importance of establishing business relationship and debt under Section 138.
- Citing precedent, High Court highlighted the need for preponderance of probabilities to rebut presumptions under Section 139.

3. Judicial Review and Acquittal:
- High Court reviewed trial court's findings and upheld the acquittal.
- Emphasized the principle against disturbing acquittal if a possible view in favor of the accused exists.
- Reiterated the wide powers of the appellate court but upheld trial court's decision based on evidence.
- Concluded that accused successfully rebutted the presumption under Section 139, leading to dismissal of the appeal.

In conclusion, the High Court dismissed the appeal, affirming the acquittal of the accused under Section 138 of the N.I. Act. The judgment focused on the failure to serve the demand notice within the statutory period, the need to establish a business relationship and debt, and the principles guiding judicial review of acquittals. The decision highlighted the importance of evidence, preponderance of probabilities, and the presumption under Section 139 in cases involving dishonoured cheques.