2022 (4) TMI 554 - HC - Indian Laws

Dishonor of Cheque - funds insufficient - existence of liability on the part of petitioner or not - enhancement in the fine amount - Whether this Court can exercise the revisional jurisdiction in coming to the conclusion that the Trial Court has committed an error in appreciating the material on record and the Appellate Court has committed an error in dismissing the appeal filed by the petitioner and allowing the revision petition filed by the respondent? - HELD THAT - The Appellate Court while confirming the order of the Trial Court though discussed in detail, not accepted the defence theory of the petitioner and in paragraph No. 17 comes to the conclusion that the accused has issued a cheque in favour of the complainant for returning of the advance amount. It was presented by the complainant through his advocate and it was returned for insufficient funds and inspite of demand notice, he has failed to pay the amount. The Appellate Court in paragraph No. 18 of the judgment comes to the conclusion that the learned Magistrate has appreciated both oral and documentary evidence on record in proper, legal manner and reached to the correct conclusion and there is no illegality or irregularity. But, both the Courts failed to take note of the fact that D.W.1 in his cross-examination says that he made the payment of ₹ 1,00,000/- in favour of the counsel for the complainant and the advocate kept the amount in his scooter and without returning the cheque, he ran away from the spot and he also admits the shara in Ex.D.1. No complaint is filed against the counsel for the complainant when he has received ₹ 1,00,000/- and he ran away from the spot. It is only a oral evidence and no material is placed for having paid the amount to the learned counsel for the complainant to the tune of ₹ 1,00,000/-. It is important to note that in the cross-examination of D.W.1, a suggestion was made by the counsel for the complainant that he sold the quarry worth of ₹ 1,50,000/- and out of ₹ 1,50,000/-, he retained the royalty amount of ₹ 50,000/- and paid the amount of ₹ 1,00,000/- on 05.05.2006 in terms of endorsement made in Ex.D.1 and the said suggestion is denied. There is an endorsement with regard to having made the payment of ₹ 1,00,000/-. It has to be noted that it is the transaction of the year 2005 and the Trial Court while awarding penalty amount is concerned, only awarded the cheque amount. It is already pointed out that for having paid ₹ 1,00,000/- is not given any deduction since the payment is subsequent to the issuance of the subject matter of the cheque and the Appellate Court also failed to take note of this aspect. When such being the material available on record, the Appellate Court committed an error in entertaining the revision petition and enhancing the fine amount to ₹ 5,25,000/-. But, there are no ground to acquit the petitioner as contended by the learned counsel for the petitioner and the very contention that both the Courts have committed an error also cannot be accepted. Though the petitioner contend that an amount of ₹ 2,50,000/- was paid in favour of one Muthu, the same has not been proved by examining Muthu and hence there are no merit in the revision petition filed by the revision petitioner with regard to conviction and sentence against the Trial Court judgment. But, there is a force in the contention of the learned counsel for the petitioner with regard to Crl.R.P. No. 02/2013 is concerned, wherein the Revision Court enhanced the fine amount to ₹ 5,25,000/- and it requires interference of this Court since the Appellate Court has not taken note of the payment of ₹ 1,00,000/- as discussed. The judgment of conviction passed by the Trial Court is upheld and the enhancement of fine amount by the Appellate Court is hereby set aside - petition dismissed.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Enhancement of fine amount by the Appellate Court.
3. Revisional jurisdiction of the Court.
4. Final order.

Issue 1: Conviction under Section 138 of the Negotiable Instruments Act:
The case involved an agreement between the complainant and the accused for a granite business. The accused failed to obtain the necessary permit, leading to the cancellation of the agreement. The accused issued a cheque which was dishonored, resulting in legal action. The Trial Court convicted the accused under Section 138 of the NI Act. The accused claimed to have made partial payments, but the evidence presented was insufficient. The Appellate Court upheld the Trial Court's decision, emphasizing the issuance and dishonor of the cheque. The accused's defense regarding payments made through a third party was not substantiated, leading to the rejection of the appeal.

Issue 2: Enhancement of fine amount by the Appellate Court:
The Appellate Court, while dismissing the appeal, increased the fine amount from ?3,50,000 to ?5,25,000. The accused argued that a payment of ?1,00,000 was made after the cancellation of the agreement, which the courts failed to consider. The Court noted discrepancies in the accused's defense regarding this payment and found the evidence presented insufficient to support the claim. The Appellate Court's decision to enhance the fine amount was based on the original agreement and the dishonored cheque, disregarding the subsequent payment contention. The High Court found merit in the accused's argument regarding the fine amount enhancement and set aside the Appellate Court's decision in this regard.

Issue 3: Revisional jurisdiction of the Court:
The High Court considered whether it could intervene based on the errors allegedly committed by the Trial Court and the Appellate Court. The Court analyzed the evidence, including the agreement, dishonored cheque, and subsequent payment claim. It found that while the conviction was justified, the enhancement of the fine amount lacked proper consideration of the subsequent payment made by the accused. The Court exercised its revisional jurisdiction to set aside the fine amount increase, highlighting the importance of a thorough examination of all relevant evidence in such cases.

Final Order:
The High Court dismissed the revision petition filed by the accused challenging the conviction. However, it set aside the Appellate Court's decision to enhance the fine amount, thereby allowing the accused's revision petition in this regard. The judgment of conviction by the Trial Court was upheld, emphasizing the significance of proper evaluation of evidence in cases involving dishonored cheques and contractual disputes.