2022 (12) TMI 593 - HC - Indian Laws

Dishonor of cheque - accused was acquitted - Preconditions for a valid cheque - material alteration but putting date on cheque - offence punishable u/s 138 - presumption u/s 139 - whether the accused has successfully rebutted that presumption? - HELD THAT - It is true that once the accused is acquitted, the presumption of innocence get strengthened. It is not the rule of law but rule of prudence not to interfere in the judgment of acquittal. It is important to note that the prosecution under Section 138 of the Negotiable Instrument Act is quasi criminal in nature. So as to say that burden not only lies on the complainant (just like on prosecution in criminal trial), but it also lies on the accused. In other words, the burden never entirely rests on the complainant. So, putting a date whether was in pursuance to the common intention of the parties is a question. Putting the name of the payee also cannot be held to be objectionable. It is for the reason that they were handed over to the complainant only. No doubt cheque is negotiable instrument which is transferable and negotiable, presumption under Section 138 of the Negotiable Instrument Act can be drawn only when the preconditions are satisfied. The complainant unilaterally has put in dates on the cheques without the authority of the accused and even by not informing him. So, it amounts to material alterations. If it is so such negotiable instrument becomes void. Hence prosecution under Section 138 of the Negotiable Instrument Act cannot be initiated. On that aspect the complainant has failed to satisfy the requirement of valid cheque. Appeal dismissed.

Issues Involved:
1. Authority of the partner to file the complaint.
2. Territorial jurisdiction of the court.
3. Drawing of cheques and their validity.
4. Purpose of the cheques (security vs. repayment).
5. Presumption under Section 139 of the Negotiable Instruments Act.
6. Legally recoverable debt or liabilities.
7. Material alterations on the cheques.
8. Simultaneous civil and criminal proceedings.

Detailed Analysis:

1. Authority of the Partner to File the Complaint:
The trial court considered the accused's admission in the statement under Section 313 of the Criminal Procedure Code, confirming that the complainant was a partner in the firm. The court observed that facts admitted need not be proved, thus affirming the complainant's authority to file the complaint.

2. Territorial Jurisdiction of the Court:
The trial court established territorial jurisdiction as the cheques were deposited in Jankalyan Sahakari Bank Ltd., Sion Branch.

3. Drawing of Cheques and Their Validity:
The trial court noted that the cheques were drawn on the accused's account and handed over without a date. The court questioned why the date was put on the cheque and at whose instructions, leading to the conclusion that the cheques were given for security purposes.

4. Purpose of the Cheques (Security vs. Repayment):
The trial court found the accused's theory that the cheques were given as security reasonable, especially since the cheques were deposited after the accused filed a civil suit against the complainant. The court did not accept the complainant's act of putting the payee's name and date on the cheques after the civil suit was filed.

5. Presumption under Section 139 of the Negotiable Instruments Act:
The trial court concluded that the accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act by providing a probable and acceptable explanation through cross-examination.

6. Legally Recoverable Debt or Liabilities:
The trial court observed that the complainant suppressed the receipt of Rs. 19,00,000/- until it was revealed during cross-examination. The court found the demand of Rs. 1 Crore unreasonable and excessive, given the payment received in 2005. The court also noted that the Memorandum of Understanding was silent on the date from which interest was payable.

7. Material Alterations on the Cheques:
The trial court found that the complainant unilaterally put the date and payee's name on the cheques without the accused's authority, amounting to material alterations. The court held that such alterations rendered the negotiable instrument void, thus invalidating the prosecution under Section 138 of the Negotiable Instruments Act.

8. Simultaneous Civil and Criminal Proceedings:
The court acknowledged that simultaneous prosecution under civil law and Section 138 of the Negotiable Instruments Act is permissible. The Hon'ble Supreme Court's judgment in M/s Sri Krishna Agencies Vs. State of A.P. clarified that intention to deceive is not required for the offence under Section 138.

Conclusion:
The appeals were dismissed as the complainant failed to satisfy the requirement of a valid cheque due to the material alterations. The court found no merit in the appeals and upheld the trial court's judgment of acquittal. Applications, if any, were also disposed of.

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