2022 (5) TMI 467 - HC - Indian Laws

Dishonor of Cheque - framing of charges - acquittal of accused - admissibility of evidences - Discharge of existing liability - rebuttal of presumption - HELD THAT - The allegation in the complaint is that in discharge of their existing liability in respect of a loan taken by the accused company from the complainant, its three Directors, Dinesh Chandra Meheta, Chaner Pal Meheta and Hiten D Meheta in control of the affairs of the company issued a cheque bearing 212779 dated 29.05.2000 for Rs. 5,12,188/- (Exhibit 1) drawn on Bank of India, Calcutta Overseas Branch, in favour of the complainant. The said cheque was presented to Global Trust Bank Chowringhee Branch, Calcutta within its valid period of for encashment but the same was returned dishonoured on 24.08.2000. Demand notice was issued on 02.09.2000 and sent to the accused persons through the advocate of the complainant under registered post with AD and the same was served upon accused no. 1 and 3 on 06.09.2000 and on accused no. 2 and 4 on 15.09.2000 but the accused persons/ respondents did not make any payment. The presumption under Section 139 of the Negotiable Instrument Act which arose against the accused respondents have not been rebutted. It is therefore clear that the cheque (Exhibit 1) was issued by one of the Directors of the company for discharge in whole or in part of any debt of other liability. Learned Magistrate ahs committed an error in law by not placing reliance upon the demand notice and observing in his judgment that the demand has not been proved. Once a document is admitted in evidence without any objection the legal consequence is that reliance has to be placed upon its content unless the same is disputed - omission to raise objection at the time of admission of Exhibit 12 in evidence is fatal to the defence case and there is no reason to relegate the validity of the document as not prove. The evidence on record is cogent and consistent and the same establishes the offence under Section 138/141 of the Negotiable Instrument Act against Respondents no. 2 to 5 beyond reasonable doubt. The judgment of acquittal passed by learned Magistrate suffers from illegality as it is not based upon the evidence on record. Learned Magistrate has failed to appreciate the case in its proper perspective in the light of the evidence on record, consistent with object of legislation, as such the same is liable to be set aside - Appeal allowed.

Summary

Issues Involved:
1. Whether the demand notice under Section 138 of the Negotiable Instruments Act was properly proved.
2. Whether the acquittal of the accused by the Metropolitan Magistrate was justified.
3. Whether the appellant's appeal against the acquittal should be allowed.

Issue-wise Detailed Analysis:

1. Whether the demand notice under Section 138 of the Negotiable Instruments Act was properly proved:
The appellant company issued a demand notice to the respondents after a cheque issued by the respondents was dishonored. The Metropolitan Magistrate acquitted the respondents on the ground that the demand notice (Exhibit 12) was not properly proved. The appellant argued that the notice was admitted in evidence without objection from the defense and that the service of the notice was acknowledged by the respondents. The court noted that once a document is admitted in evidence without objection, its contents need not be separately proved. The court also referred to the principle laid down in Dayamathi Bai vs. K.M. Shaffi, which states that objections to the mode of proof must be raised at the time of admission of the document. Since the respondents did not object to the admission of Exhibit 12, the court held that the demand notice was properly proved.

2. Whether the acquittal of the accused by the Metropolitan Magistrate was justified:
The Metropolitan Magistrate acquitted the respondents on the sole ground that the demand notice was not properly proved. The appellant contended that the magistrate failed to appreciate that the notice was admitted in evidence and that the respondents had acknowledged receipt of the notice. The court found that the magistrate committed an error in law by not placing reliance on the demand notice and by not appreciating the evidence on record. The court held that the evidence was cogent and consistent, establishing the offense under Section 138/141 of the Negotiable Instruments Act beyond reasonable doubt.

3. Whether the appellant's appeal against the acquittal should be allowed:
The court re-evaluated the evidence and found that the cheque was issued by the respondents in discharge of their liability and was dishonored. The demand notice was duly served, and the respondents failed to make the payment within the statutory period. The court held that the presumption under Section 139 of the Negotiable Instruments Act was not rebutted by the respondents. Consequently, the court set aside the judgment of acquittal, found the respondents guilty of the offense, and sentenced them to a fine of Rs. 8,00,000/- jointly and severally, with a default sentence of rigorous imprisonment for one year for each director. The fine, upon realization, was to be paid to the complainant as compensation.

Conclusion:
The court allowed the appeal, set aside the acquittal, and convicted the respondents under Section 138/141 of the Negotiable Instruments Act. The respondents were directed to surrender before the Metropolitan Magistrate within a fortnight, and the lower court was instructed to execute the sentence within a month.