2022 (7) TMI 421 - HC - Indian Laws

Dishonor of Cheque - cheque was issued towards repayment of friendly loan - rebuttal of statutory presumptions - Section 138 of N.I. Act - HELD THAT - In the present case, perusal of evidence available on record clearly indicates that, there is not a whisper in the complaint so also in the examination-in-chief of Appellant that on which date or in month he advanced the alleged friendly loan to Respondent No.1. His evidence is also silent with respect to the fact that, as to how he advanced friendly loan of Rs.5,00,000/- to Respondent No.1, i.e. in cash or by way of bank transfer. There is no agreement in writing on record or any receipt executed by Respondent No.1 towards acceptance of the said friendly loan. It is to be noted here that, the Appellant in his evidence has admitted that, his annual income was Rs.2,00,000/- and he is a income tax payer. The Appellant has failed to establish, as to when the cheque in-question was issued by Respondent No.1. As noted earlier, Appellant has failed to establish the fact that, when he actually advanced the alleged hand loan to Respondent No.1. In this context, it is to be noted here that, Respondent No.1 on 24th August 2005 itself had intimated the fact of loss or theft of her signed cheques/cheque book to the Manager of Central Bank of India, Sion Branch, Mumbai, by issuing a letter. She had also given intimation to the Manager of the said bank for closure of her bank account by a separate letter - the presumptions as contemplated under Sections 118 139 of N.I. Act are not available to Appellant. A minute scrutiny of the evidence on record leads to draw a safe inference to hold that, the Respondent No.1 has rebutted the statutory presumptions by leading cogent evidence in that behalf. Taking into consideration the defence put forth by Respondent No.1, it can further be inferred that the Appellant might have misused the lost or stolen cheques while initially issuing the statutory notice and subsequently lodging the present complaint. Perusal of entire record would clearly lead to a safe conclusion that, the Appellate Court has appreciated the evidence available on record in its proper perspective and has not committed any error either in law or on facts while passing the impugned Judgment and Order. Appeal dismissed.

Summary

Issues:
Appeal under Section 378 (4) of the Code of Criminal Procedure against Judgment and Order dated 11th January 2010 setting aside the conviction and sentence under Section 138 of The Negotiable Instruments Act, 1881.

Analysis:
1. The appellant contended that the respondent failed to reply to the notice under Section 138 of N.I. Act, indicating an admission of issuing the disputed cheque. The appellant argued that there is a presumption in favor of the holder of the cheque that it was issued for debt discharge, which the respondent failed to rebut under Section 139 of N.I. Act. The appellant cited various legal precedents to support his contentions.

2. The respondent denied issuing the cheque, claiming her signed blank cheques were stolen. She also mentioned personal hardships, including the demise of her husband and harassment by in-laws. The Trial Court convicted the respondent, but the Appellate Court, after reevaluating the evidence, set aside the conviction. The respondent's defense successfully rebutted the presumptions under Section 139 of N.I. Act.

3. The Hon'ble Supreme Court's interpretation in Kumar Exports Vs. Sharma Carpets highlighted that the accused can disprove the existence of consideration and debt to shift the burden of proof. In this case, the appellant failed to provide substantial evidence of advancing a friendly loan to the respondent, casting doubt on the claim. The respondent's actions of reporting the loss of cheques and harassment by the appellant further weakened the appellant's case.

4. The evidence on record lacked crucial details, such as the date of the alleged loan and the manner of its transfer. The respondent's proactive reporting of the lost cheques and subsequent harassment complaints indicated a different narrative. The Appellate Court's decision to dismiss the appeal was justified, as the evidence did not support the appellant's claims adequately.

5. The Appellate Court's thorough analysis of the evidence, along with the respondent's rebuttal of presumptions, led to the dismissal of the appeal. The judgment upheld legal principles and highlighted the importance of substantial evidence in cases under Section 138 of N.I. Act.