2022 (8) TMI 552 - HC - Indian Laws

Dishonor of Cheque - legally enforceable debt or not - rebuttal of presumption - preponderance of probablities - cheque in question was handed over to the complainant as security for loan in relation to purchase of a vehicle - section 138 of NI Act - HELD THAT - It is found from the materials on record that the petitioner has not produced any documents namely loan agreement or receipt of the opposite party-complainant during trial showing the cheque in question to have been delivered to the complainant as security. The petitioner in his letters dated 06.02.2011, 23.01.2011 marked Exhibit D, Exhibit D1 respectively and in reply to the demand notice (Exhibit 3/1) has stated that certain documents were handed over to the complainant and finance agreement was signed by him. In his cross-examination he admitted that he did not file any finance agreement in court. It is not the case of the petitioner that copy of the finance agreement was not delivered to him - During the course of trial the petitioner also failed to make any endeavour calling for records from the office of the complainant-company to probabilise that the cheque was issued as security against loan. In the absence of cogent documents it cannot be said that the cheque amounting to Rs. 3,50,000/- was given to the complainant as security. It is also highly improbable as to why a prudent man would hand over high value cheque without any purpose or reason and that too without any receipt or document. It is admitted position that the cheque in question was issued by the petitioner and once it is so, the statutory presumption under section 139 of the Act would arise. The accused can, in contrary, prove non-existence of enforceable debt by raising probable defence. The burden upon the accused of proving the non-existence of enforceable debt can be either direct or by bringing on record the preponderance of probabilities by reference to the circumstances upon which he relies. Bare denial of the debt apparently does not appear to be any defence. Something which is probable has to be brought on record for getting benefit of shifting the onus of proving upon the complainant - The presumption mandated by Section 139 of the Act includes a presumption that there existed a legally enforceable debt or liability. It is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. Therefore, as soon as the complainant discharges the burden to prove that the instrument was executed by the accused, rules of presumptions under Sections 118 and 139 of the Act helps him shift his burden on the accused. The presumption will live, exist and survive and shall end only if the contrary is proved by the accused that is the cheque was not issued for consideration in discharge of any debt or liability. As it is found that neither any such material, cogent evidence has been adduced on behalf of the petitioner nor he has brought on record the preponderance of probabilities by referring to the circumstances from the evidence raising a probable defence of non-existence of debt, to rebut the statutory presumption, hence the findings of the courts below cannot be held to be infirm in the eye of law - Application dismissed.

Summary

Issues:
Challenging judgment and order under Sections 397/401 read with Section 482 of the Code of Criminal Procedure regarding conviction under Section 138 of the Negotiable Instruments Act.

Analysis:
1. The petitioner challenged the judgment convicting him for dishonoring a cheque issued as part payment for a car purchase. The petitioner claimed the cheque was a security deposit, not a debt, as the car was never delivered.
2. The petitioner failed to provide evidence of the cheque being a security deposit. Letters to the complainant did not explicitly state non-delivery of the car, and no legal action was taken against the complainant.
3. The statutory presumption under Section 139 of the Act favored the complainant, shifting the burden to the accused to prove non-existence of a debt. The accused must bring forth probable defense to disprove the presumption.
4. The courts found the petitioner's defense lacking in evidence or probability to rebut the statutory presumption. As a result, the conviction and sentence were upheld.
5. The judgment affirmed the conviction and directed the petitioner to surrender for sentence execution, dismissing the revisional application.

This detailed analysis covers the issues involved in the legal judgment, highlighting the key arguments, evidence, statutory provisions, and the final decision of the court.