2022 (11) TMI 993 - HC - Indian Laws

Dishonor of cheque - insufficient funds - rebuttal of presumption - preponderance of probabilities - Section 138 of NI Act - HELD THAT - Merely because the accused has produced some copies of the alleged invoices, it cannot be inferred that those invoices, which are disputed by the complainant, have been established as the one created on the date shown therein by none else than the accused himself. Even otherwise, the said place-Hosur not being far away from Bengaluru where the office of the accused is said to be situated, it is easily possible for the accused to travel from Hosur to Bengaluru either to receive the loan or to deliver the cheque in question. As such also, the oral and documentary evidence of the accused to make out a case of preponderance of probabilities to rebut the presumption formed in favour of the complainant could not be successful in achieving its goal. In addition to the above, though the accused has taken a contention that the cheque was given to one Sri Parthasarathy few years back and that Parthasarathy got the cheque presented through the complainant, but, to substantiate the same, neither the accused has produced any document nor examined said Sri Parthasarathy in his favour - admittedly for several years, the accused has kept quite without taking any action against the said Parthasarathy for alleged withholding of the cheque of the accused by him for no valid reasons. This also creates a doubt in believing the alleged defence of the accused. It is appreciating these aspects in their proper perspective, both the trial Court and the Sessions Judge's Court have held that the complainant has proved the alleged guilt against the accused and that the accused could not able to rebut the presumption formed in favour of the complainant. Accordingly, both the Courts have held the accused guilty of the alleged offence punishable under Section 138 of N.I. Act and confirmed the conviction respectively. The said witness has failed to tender himself for his further cross-examination from the accused side in spite of giving sufficient opportunities to him and also by virtue of the memo filed by the accused seeking discarding the evidence of PW-1, the trial Court and the Sessions Judge's Court ought not to have considered the evidence of PW-1, in which an event, the finding given by them would have been otherwise. As such, the impugned judgments deserves to be set aside, for which purpose, interference in them is warranted by this Court. The Criminal Revision Petition stands allowed.

Issues Involved:
1. Whether the impugned judgments suffer from perversity, illegality, impropriety warranting any interference.
2. Whether the complainant's failure to tender himself for further cross-examination invalidates his evidence.
3. Whether the accused successfully rebutted the presumption of a legally enforceable debt under Section 139 of the N.I. Act.
4. Whether the accused had a financial necessity to borrow the alleged loan amount.
5. Whether the alleged cheque was issued to the complainant or misused by a third party.

Issue-Wise Detailed Analysis:

1. Whether the impugned judgments suffer from perversity, illegality, impropriety warranting any interference:
The court examined whether the judgments from the trial court and the Sessions Judge's Court were flawed. The primary contention was that the complainant (PW-1) did not tender himself for further cross-examination by the accused despite multiple opportunities. The trial court and Sessions Judge's Court failed to discard the evidence of PW-1, leading to an incomplete analysis of the evidence. This oversight warranted interference by the High Court.

2. Whether the complainant's failure to tender himself for further cross-examination invalidates his evidence:
The complainant was required to tender himself for further cross-examination as ordered by the trial court. Despite being granted at least twenty-two opportunities, he remained absent. The trial court proceeded to arguments without considering the consequences of this absence. The High Court noted that it was the duty of the court to discard the evidence of PW-1 due to his failure to tender for cross-examination, which would have caused the complainant's case to fall on its own.

3. Whether the accused successfully rebutted the presumption of a legally enforceable debt under Section 139 of the N.I. Act:
The accused admitted to issuing the cheque and its dishonor due to insufficient funds but claimed it was given to a third party, Parthasarathy, not the complainant. The accused failed to produce any documents or witnesses to support this claim. The High Court found that the accused did not successfully rebut the presumption of a legally enforceable debt, as required under Section 139 of the N.I. Act.

4. Whether the accused had a financial necessity to borrow the alleged loan amount:
The accused argued that he had no financial necessity to borrow Rs. 1 lakh due to sufficient bank balances and incomes of his family members. However, the High Court noted that the financial status of the accused's family members did not preclude the possibility of the accused borrowing money. The documents presented by the accused did not convincingly establish that he had no need to borrow the loan amount from the complainant.

5. Whether the alleged cheque was issued to the complainant or misused by a third party:
The accused contended that the cheque was issued to Parthasarathy, who allegedly misused it. However, the accused did not take any action against Parthasarathy or provide substantial evidence to support this claim. The High Court found this defense unconvincing and an afterthought, as the accused did not substantiate it with credible evidence.

Conclusion:
The High Court concluded that both the trial court and the Sessions Judge's Court erred in not discarding the evidence of PW-1 due to his failure to tender for further cross-examination. This oversight led to an incomplete analysis of the evidence, rendering the judgments unsustainable. Consequently, the High Court set aside the judgments of conviction and acquitted the accused of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.

Order:
1. The Criminal Revision Petition is allowed.
2. The impugned judgments of conviction and order on sentence by the trial court and the Sessions Judge's Court are set aside.
3. The petitioner (accused) is acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.
4. The registry is directed to transmit a copy of this order to both the trial court and the Sessions Judge's Court along with their respective records forthwith.

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