2022 (9) TMI 791 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - acquittal of the accused - rebuttal of statutory presumption - Section 118 and 138 of NI Act - HELD THAT -The non production of license or permission issued to the complainant to run the chit is neither relevant nor vital. The issuance of cheque and dishonour of the same is the pivotal point for determination in the case in hand. The authorisation letter marked as Ex.P1 is substantially sufficient to sustain the private complaint by a registered company. In the light of the presumption under Section 118 of the Negotiable Instruments Act, 1881, the complainant is expected to prove the fundamental facts like, issuance of cheque and prima facie evidence to show that the said cheque was issued to discharge an enforceable debt. So, even without adverting to the evidence on the side of the complainant, on the reading of DW-1 testimony, it is seen that the accused admits he had chit transaction with the complainant company - To rebut the presumption of legally enforceable debt, the accused rely upon three documents. But they had not substantiated the defence, contrarily only confirm the case of the complainant. Ex.D1 pass book is in respect of group G2 E1459 GAN ticket 04. The entries indicates that as on 19.05.2010, the accused is liable to pay the amount of Rs.53,058/-. Ex.D2 is the receipt to show that the accused paid a sum of Rs.5,600/- by way of cash. Ex.D3 is the notice issued by the lawyer on behalf of the complainant company to the accused that towards the chit prized money received there is a running balance of Rs.39,442/- is due and payable and further a sum of Rs.9,456/- payable towards default interest. It is to be presumed that the cheque, which was presented for the second time within the period of 6 months is re-represented and statutory notice dated 14.12.2011 marked as Ex.P6 is a valid statutory notice - this Court finds that the dismissal of the complaint is erroneous. Hence, it is liable to be set aside - Appeal allowed.

Summary

Issues involved:
Dismissal of complaint under Section 138 of the Negotiable Instruments Act, 1881.

Detailed Analysis:

Issue 1: Dismissal of Complaint
The appeal was filed by the private complainant against the dismissal of the complaint under Sections 138 and 142 of the Negotiable Instruments Act, 1881. The complainant alleged that the respondent subscribed to a chit in a group and defaulted on subsequent payments. The respondent issued a cheque that was returned due to insufficient funds, leading to the complaint being filed. The trial court dismissed the complaint citing various reasons, including the lack of certain documents and failure to prove the issuance of the cheque for a legally enforceable debt.

Issue 2: Evidence and Arguments
The appellant's counsel argued that the accused admitted to the issuance of the cheque and his chit transaction with the complainant. The authorization of the complainant's representative was supported by documentary evidence. The accused's defense witnesses failed to rebut the presumption under the Negotiable Instruments Act. The Legal Aid Counsel for the respondent contended that the exact debt payable was not properly substantiated in the complaint and questioned the reliability of certain documents presented.

Issue 3: Court's Analysis
The High Court observed that the non-production of a license to run the chit was not crucial to the case. The pivotal point was the issuance and dishonor of the cheque. The court emphasized the need to prove the fundamental facts of the issuance of the cheque and its purpose to discharge an enforceable debt. The court found that the evidence, including the accused's admission and documentary support, established the liability of the accused in the chit transaction.

Issue 4: Rebuttal of Presumption
The accused attempted to rebut the presumption of a legally enforceable debt with certain documents, but these documents actually supported the complainant's case. The court noted discrepancies in the accused's version regarding the representation of the cheque for the second time and found the statutory notice to be valid. Consequently, the court found the dismissal of the complaint erroneous and set it aside, holding the accused guilty under Section 138 of the Negotiable Instruments Act.

Conclusion
The High Court allowed the Criminal Appeal, setting aside the acquittal judgment and holding the accused guilty under Section 138 of the Negotiable Instruments Act. The case was scheduled for further proceedings regarding the sentencing of the accused.