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2022 (12) TMI 91 - HC - Indian LawsDishonor of cheque - rebuttal of presumption - signatures in the cheque not disputed - acquittal of respondent on the ground that the appellant failed to prove that cheques were issued towards legally enforceable debt - Section 138 of the N.I. Act - HELD THAT - It is now a well settled proposition of law that the Appellate Court should not replace its finding with that of the trial Court only when another view is possible. Interference is permitted only when findings of the trial Court are perverse or against a settled proposition of law. Keeping in mind the above settled proposition for the purpose of deciding present appeal. Re-appreciation of evidence so as to consider whether findings of the trial Court are in fact perverse and if so whether interference is warranted needs to be looked into. In the entire evidence brought on record the accused did not dispute issuance of such cheques including her signature on it. However only defence raised with regard to such cheques is that same were obtained by force and coercion as well as threats. Thus when the signatures on the cheques are not disputed as that of the accused the provisions of Section 139 of N.I. Act stands attracted immediately. Magistrate is duty bound to draw a presumption under Section 139 of N.I. Act in favour of the complainant and there is no other option available otherwise. The entire material placed by the parties before the trial Court in connection with Exh.24 i.e. promissory note dated 18th April 2012 nowhere remotely suggests that the accused succeeded in proving contrary thereby dislodging presumption under Section 118 of the N.I. Act. The entire case of the complainant is based on a cheque dated 15th June 2012 for Rs.3, 00, 000/- issued by the accused towards discharge of the amount mentioned in the promissory note at Exh-24. Therefore apart from the presumption under Section 118 of the N.I. Act the complainant is also having the support of presumption under Section 139 of the N.I. Act - only because the complaint is lodged with the police station on 2nd July 2012 i.e. on the date when such cheques were already dishonoured no interference could have been drawn by the learned Court in favour of the accused so as to dislodge presumption under Section 139 of the N.I. Act. Only lodging such a complaint of taking such cheque by force or threat is not sufficient enough to rebut presumption under Section 139 of N.I. Act specifically when the accused admits her signature on the cheque. Once it is considered that the accused failed to rebut presumption under Section 139 of the N.I. Act qua the cheque dated 15th June 2012 for Rs.3, 00, 000/- vide Exh-21 the accused ought to have been considered as guilty for the offence punishable under Section 138 of N.I. Act. Thus such findings are clearly unacceptable and therefore so far as the first cheque of Rs.3, 00, 000/- is concerned dated 15th June 2012 the accused is found guilty for the offence under Section 138 of the N.I. Act. The impugned judgment needs to be quashed and set aside qua cheque dated 15th April 2012 for Rs.3, 00, 000/- at Exh-21 (colly) - application disposed off.
Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act (N.I. Act). 2. Presumption under Sections 118 and 139 of the N.I. Act. 3. Burden of proof and rebuttal of presumption. 4. Execution and validity of promissory notes. 5. Capacity of the complainant to lend money. 6. Allegations of coercion and threats. 7. Variance between complaint and evidence. 8. Liability of the accused for the debt of her husband. Issue-wise Detailed Analysis: 1. Legally Enforceable Debt under Section 138 of the N.I. Act: The appellant challenged the judgment of the Magistrate, which dismissed the complaint under Section 138 of the N.I. Act and acquitted the respondent. The appellant contended that the respondent issued two cheques towards the repayment of promissory notes, which were dishonored due to insufficient funds. The Magistrate dismissed the complaint, concluding that the appellant failed to prove that the cheques were issued for a legally enforceable debt. 2. Presumption under Sections 118 and 139 of the N.I. Act: The appellant argued that the Magistrate ignored the presumptions under Sections 118 and 139 of the N.I. Act, which mandate that cheques are presumed to be issued for a legally enforceable debt unless proven otherwise. The court emphasized that the Magistrate should have drawn these presumptions in favor of the complainant once the issuance of the cheques and the signatures were admitted by the accused. 3. Burden of Proof and Rebuttal of Presumption: The court noted that the presumption under Section 139 is rebuttable, and the onus is on the accused to raise a probable defense. The standard of proof for rebutting the presumption is preponderance of probabilities. The accused can rely on the evidence led by the complainant or other materials to raise a probable defense. 4. Execution and Validity of Promissory Notes: The appellant produced two promissory notes, which were duly exhibited during the trial. The Magistrate's observation that the promissory notes were not proved due to the non-examination of the notary was deemed unwarranted. The court held that the promissory notes were proved to have been executed by the accused, and the Magistrate should have drawn a presumption under Section 118 of the N.I. Act. 5. Capacity of the Complainant to Lend Money: The accused questioned the complainant's capacity to lend Rs. 3,00,000/-. The court found that the complainant's cross-examination supported her capacity to lend the money, and the accused admitted to taking a loan of Rs. 3,00,000/- in her reply to the legal notice. 6. Allegations of Coercion and Threats: The accused claimed that the cheques were obtained under coercion and threats. The court found that the complaint lodged by the accused with the police was an afterthought, filed only after the cheques were dishonored. The court held that mere lodging of a complaint was insufficient to rebut the presumption under Section 139 of the N.I. Act. 7. Variance Between Complaint and Evidence: The court noted a variance between the complaint and the evidence regarding the second cheque of Rs. 1,30,000/-. The complainant admitted during cross-examination that the amount was given to the accused's husband, not the accused. The court held that the complainant failed to prove that the accused was liable to repay the amount given to her husband. 8. Liability of the Accused for the Debt of Her Husband: The court distinguished the present case from the ICDS Ltd. case, where the Supreme Court held that a guarantor could be liable under Section 138 of the N.I. Act. In the present case, the accused was not a guarantor and did not accept liability for her husband's debt. Therefore, the accused was not liable for the cheque of Rs. 1,30,000/-. Conclusion: The court quashed the Magistrate's judgment regarding the cheque of Rs. 3,00,000/- and found the accused guilty under Section 138 of the N.I. Act for this cheque. The accused was sentenced to one month of simple imprisonment and ordered to pay compensation of Rs. 6,00,000/- to the complainant. The court upheld the Magistrate's judgment regarding the cheque of Rs. 1,30,000/-, finding no liability on the part of the accused for this amount. The accused was directed to surrender before the Magistrate within two weeks.
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