2022 (4) TMI 1149 - HC - Indian Laws

Dishonor of cheque - discharge of legally enforceable debt or not - rebuttal of presumption - security cheque has been misused by the complainant or not - HELD THAT - In the present case, it is not in dispute that the cheque in question bears the signatures of the petitioner. The factum of there being a relationship between the parties is also proved beyond doubt on the record. The fact that the complainant had a financial standing to advance the friendly loan to the petitioner is also prima facie proved from the evidence on record to the effect that he owns 10.5 acres of land and had also sold his buffalo in the month of March, 2016, which facts have not been rebutted either before the Courts below or before this Court. The Hon'ble Supreme Court of India, in case titled as Bir Singh vs. Mukesh Kumar 2019 (2) TMI 547 - SUPREME COURT , had held that the Court shall presume the liability of the drawer of the cheques for the amount for which the cheques are drawn. The Hon'ble Supreme Court in the said case had also held that the revisional Court should not interfere in the absence of jurisdictional error - A perusal of the judgment would show that it has been observed that even if a cheque is a security cheque, the same is an integral part of the commercial process and the same acts as a deterrent for the drawer against dishonouring his financial commitment and can also be used towards discharging the liability of the drawer. It had been further held that to state otherwise, would defeat the whole purpose of a security cheque. There is no illegality or infirmity in the judgments passed by both the Courts below and accordingly, the present Criminal Revision being sans merit is thus, dismissed.

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Appeal against the conviction and sentence.
3. Arguments regarding the non-existence of a friendly loan.
4. Use of a blank cheque as security.
5. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
6. Financial capacity of the complainant.
7. Admissibility of a security cheque under Section 138.
8. Jurisdictional error and revisional court's interference.

Issue-wise Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The petitioner was convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to simple imprisonment for one month. Additionally, the petitioner was directed to pay compensation of ?1,00,000 to the complainant, failing which, further simple imprisonment for three months was imposed.

2. Appeal against the Conviction and Sentence:
The appeal against the conviction and sentence was dismissed by the Additional Sessions Judge, Hisar, on 05.04.2022, thereby upholding the original judgment.

3. Arguments Regarding the Non-Existence of a Friendly Loan:
The petitioner argued that there was no proof of a friendly loan given by the complainant and that the date of the loan was not mentioned. The petitioner claimed that the cheque was given as security due to a dispute over a vehicle loaded with chicks, and that the complainant had misused the security cheque.

4. Use of a Blank Cheque as Security:
The petitioner contended that the cheque in question was a security cheque. However, both the lower courts found that an amount of ?1,00,000 was advanced as a friendly loan on 15.03.2016, which was corroborated by the complainant's cross-examination. The courts also noted that the petitioner had admitted to signing the cheque.

5. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The courts relied on the presumption under Sections 118 and 139 of the Act, which favors the holder of the cheque. The burden of proof shifted to the petitioner to rebut this presumption, which he failed to do. The judgments cited from the Supreme Court, including "Rohitbhai Jivanlal Patel Vs. State of Gujarat" and "M/s Kalamani Tex Vs. P. Balasubramanian," reinforced this presumption and the petitioner's failure to discharge the onus.

6. Financial Capacity of the Complainant:
The complainant's financial capacity to advance the loan was established by evidence showing that he owned 10.5 acres of land and had sold a buffalo for ?1,00,000 in March 2016. This evidence was not rebutted by the petitioner.

7. Admissibility of a Security Cheque under Section 138:
The court referred to the judgment in "Shalini Enterprises Vs. India Bulls Financial Service," which held that a security cheque is an integral part of the commercial process and can be used to discharge the drawer's liability. The argument that a security cheque cannot attract liability under Section 138 was rejected.

8. Jurisdictional Error and Revisional Court's Interference:
The Supreme Court in "Bir Singh vs. Mukesh Kumar" held that revisional courts should not interfere in the absence of jurisdictional error. The court reaffirmed that the presumption of liability under Sections 138 and 139 must be upheld unless the accused provides cogent evidence to the contrary.

Conclusion:
The High Court found no illegality or infirmity in the judgments of the lower courts. The petitioner's arguments were deemed baseless, and the presumption under Sections 118 and 139 was not rebutted. The conviction and sentence were upheld, and the criminal revision was dismissed. All pending miscellaneous applications were disposed of as infructuous.

← Previous Next →