2022 (2) TMI 130 - HC - Indian Laws

Dishonor of cheques - acquittal of accused - rebuttal of presumption - offence under Section 138 of the N.I. Act - HELD THAT - In this case, the respondent chose not to examine himself. The defence witness (DW1) examined by the respondent has not succeeded in rebutting the presumption that arises in these types of matters. The evidence of DW1 also does not inspire confidence because there is material on record that even this witness was charged with certain offences along with the respondent and the two were together facing prosecution for offences like cheating, etc. - based on the evidence on record, the appellants have proved the guilt of the respondent beyond a reasonable doubt. The acquittal is based on a misreading of the evidence on record and virtually ignoring the presumption that arises in terms of Section 139 of the N.I. Act. This is a fit case where the respondent should be sentenced to undergo imprisonment of six months and pay a fine of ₹ 60,000/-. In default, the respondent will have to suffer further imprisonment of one month. The conviction and sentence will however become effective from 31.03.2022. However, if within two months from today the respondent deposits in this Court an amount of ₹ 75,000/- in each of these appeals i.e. a total amount of ₹ 2,25,000/-, then, the offence will be deemed to have been compounded and the respondent will not be required to suffer any conviction or sentence - It is made clear that though these appeals are being disposed of by a common Judgment and Order, the conviction is in respect of different and distinct offences, and therefore there is no question of the sentences running concurrently. These appeals are disposed of.

Summary

Issues:
1. Applicability of Section 139 of the Negotiable Instruments Act, 1881.
2. Burden of proof on the respondent to rebut the presumption under Section 139.
3. Evaluation of evidence and credibility of defense witness.
4. Conviction and sentencing under Section 138 of the N.I. Act.
5. Compounding of the offense and consequences of non-payment within the specified time.
6. Separate sentencing for distinct offenses against different complainants.

Analysis:

1. The Court was convinced that the impugned Judgment and Orders acquitting the respondent needed interference due to the applicability of Section 139 of the Negotiable Instruments Act, 1881. The presumption under this section was clearly attracted as the appellants proved that the cheques were signed and issued by the respondent beyond reasonable doubt.

2. The Trial Judge erred by ignoring the provisions of Section 139 and granting the benefit of the doubt to the respondent. The onus was on the respondent to rebut the presumption, which was not done satisfactorily. The evidence on record explained how the amount in question was procured, and the respondent's defense witness failed to inspire confidence, leading to a misreading of evidence and acquittal.

3. The respondent's choice not to examine himself and the lack of success in rebutting the presumption through the defense witness's testimony raised doubts about credibility. The witness was also facing charges similar to the respondent, casting further suspicion on the defense presented during the trial.

4. Considering the evidence and the failure to rebut the presumption, the Court reversed the impugned Judgment and Orders, convicting the respondent under Section 138 of the N.I. Act. The respondent was sentenced to six months of imprisonment and a fine of ?60,000, with additional consequences in case of default.

5. The Court provided an option for compounding the offense by depositing ?75,000 in each case within two months. Failure to do so would result in the respondent standing convicted and facing the prescribed sentence. The sentencing was set to be effective from a specified date, ensuring clarity on the consequences of non-compliance.

6. As the offenses were committed against separate complainants, the sentences were to be served separately and consecutively. The Court emphasized the distinct nature of the offenses and clarified that the sentences would not run concurrently, highlighting the individual accountability of the respondent in each case.