2022 (6) TMI 1207 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt or not - validity of confirmation of conviction for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - rebuttal of presumption - HELD THAT - In the instant case, though a presumption about existence of legally enforceable debt was initially formed in favour of the complainant under Section 139 of the N.I.Act, however, the accused by eliciting several statements in the cross-examination of PW1 in his favour and also leading evidence by examining four witnesses from his side, could able to successfully make this court to suppose that no consideration and debt existed. Thus, the presumption formed in favour of the complainant was successfully rebutted by the accused. Once the presumption formed in favour of the complainant stands rebutted, the onus would be upon the complainant to prove the existence of legally enforceable debt or passing of the consideration to the drawer of the cheque towards the cheque issued in his favour. In the instant case, except attempting to show that a presumption was formed in his favour under Section 139 of the N.I.Act, since the complainant has not taken any further steps to show that there existed a legally enforceable debt or that consideration towards the cheque under Ex.P-1 was passed on to accused, suffice it to say that the complainant had failed to prove the alleged guilt against the accused. However, both the Trial Court and the Sessions Judge's Court without analyzing the evidence placed before them in their proper perspective, have hastily embraced the fact that both the parties to the case were known to each other and the cheque that was issued by the accused, was presented by the complainant and the same came to be dishonored and also of the fact that a legal notice was also sent by the complainant after dishonor of the cheque, calling upon the accused to pay the cheque amount, have jumped to a conclusion that complainant has proved the alleged guilt of the accused. Since the said finding of both the Trial Court and the Sessions Judge's Court now proved to be perverse and erroneous, the same warrants interference at the hands of this Court. The impugned judgment of conviction and order on sentence passed by the learned Civil Judge and J.M.F.C, Turuvekere, holding the revision petitioner (accused) guilty of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentencing him for the alleged offence, is set aside - the Criminal Revision Petition is allowed.

Summary

Issues Involved:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.
2. Presumption under Section 139 of the Negotiable Instruments Act.
3. Rebuttal of presumption by the accused.
4. Analysis of evidence and credibility of witnesses.
5. Non-reply to legal notice by the accused.
6. Alleged typographical error in the complainant's statements.
7. Perverse and erroneous judgments by the Trial Court and Sessions Judge's Court.

Issue-wise Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881:
The complainant alleged that the accused borrowed Rs.50,000 on 6.6.2008 for purchasing a Maruti Omni Van and issued a cheque for repayment, which was dishonored due to insufficient funds. The Trial Court convicted the accused under Section 138 of the N.I. Act, which was upheld by the Sessions Judge's Court.

2. Presumption under Section 139 of the Negotiable Instruments Act:
The complainant presented evidence including the dishonored cheque, banker's endorsement, legal notice, and postal receipts. This created a presumption under Section 139 of the N.I. Act that the cheque was issued for a legally enforceable debt.

3. Rebuttal of presumption by the accused:
The accused contested the claim, stating he had only borrowed Rs.20,000 on 6.10.2008 and provided three blank signed cheques as security, which were not returned even after repayment. He argued that one of these cheques was misused by the complainant. The accused supported his defense by examining witnesses who corroborated his version.

4. Analysis of evidence and credibility of witnesses:
The court noted discrepancies in the complainant's statements, particularly about the involvement of a person named Sri.Aslamsab, who denied the complainant's claims. Witnesses from the accused's side consistently supported the defense that the cheque was given as security for a smaller loan. The court found the accused's evidence more credible, thereby rebutting the presumption of a legally enforceable debt.

5. Non-reply to legal notice by the accused:
The complainant argued that the accused's failure to reply to the legal notice indicated an afterthought defense. However, the court held that non-reply alone does not imply admission of liability, especially when the accused presented a consistent defense during the trial.

6. Alleged typographical error in the complainant's statements:
The complainant claimed that certain statements about Sri.Aslamsab were typographical errors. The court rejected this argument, stating that these statements were made naturally during cross-examination and were not corrected at the time of deposition.

7. Perverse and erroneous judgments by the Trial Court and Sessions Judge's Court:
The court found that both lower courts failed to properly analyze the evidence and hastily concluded the existence of a legally enforceable debt based on the presumption under Section 139 of the N.I. Act. The court deemed these judgments as perverse and erroneous, warranting interference.

Conclusion:
The court concluded that the accused successfully rebutted the presumption of a legally enforceable debt. The complainant failed to prove the existence of such debt beyond the initial presumption. Consequently, the court allowed the revision petition, setting aside the judgments of the Trial Court and Sessions Judge's Court, and acquitted the accused of the offence under Section 138 of the N.I. Act.