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2023 (2) TMI 822 - HC - Indian LawsDishonour of cheque - absence of any documents of the postal authorities, showing service of demand notice upon the petitioner - principles of natural justice - HELD THAT - There is sufficient evidence to show that the cheque was duly issued and after completion of all formalities the proceedings under section 138 NI act was initiated. The learned Magistrate on considering the evidence before the court and materials on record, convicted the petitioner/accused. The session Judge after considering the materials on record, modified the judgment and order of the Magistrate and set aside the substantive part of imprisonment keeping the order to pay compensation intact. Sec 138 N.I Act provides for punishment of imprisonment for a term which may be extended to two years or with fine which may extend to twice the amounts of the cheque or with both. The cheque dated 31.10.2009 amount was for an amount Rupees 8,50,000/- and the compensation imposed is RS 12,50,000/- - Fourteen long years have passed - The learned Sessions Judge has also set aside the substantive sentence of imprisonment. In spite of the said circumstances the petitioner has still not paid the balance amount of Rs. 4 lakhs (compensation). The petitioner is to pay the balance amount (compensation) within two months from the date this order, failing which the petitioner will undergo the sentence in default of payment of compensation - Application dismissed.
Issues Involved:
1. Validity of the cheque and the liability of the petitioner under Section 138 of the Negotiable Instruments Act. 2. Adequacy of evidence to support the claim of liability. 3. Validity of the demand notice and its service. 4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act. 5. Appropriateness of the sentence and compensation awarded. Issue-wise Detailed Analysis: 1. Validity of the Cheque and Liability under Section 138 of the Negotiable Instruments Act: The petitioner issued a cheque for Rs. 8,50,000/- dated 31.10.2009, which was dishonored upon presentation. The opposite party initiated legal proceedings under Section 138 of the Negotiable Instruments Act. The Learned Metropolitan Magistrate convicted the petitioner, sentencing him to six months of simple imprisonment and directing him to pay Rs. 12,50,000/- as compensation. The Sessions Judge modified this, setting aside the imprisonment but maintaining the compensation order. 2. Adequacy of Evidence to Support the Claim of Liability: The petitioner contended that the opposite party failed to provide any documentary evidence to prove the existence of liability or the accommodation loan. No business records, income tax returns, or money lender's certificates were produced. Despite these arguments, the courts found sufficient evidence to uphold the conviction, emphasizing the issued cheque's validity and the formalities completed under Section 138 of the NI Act. 3. Validity of the Demand Notice and Its Service: The petitioner argued that the signatures on the demand notice were not verified, and no postal documents were provided to confirm the notice's service. However, the court held that the absence of such verification did not invalidate the proceedings, as the petitioner's denial alone was insufficient to rebut the statutory presumption. 4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act: Section 139 presumes that the holder of a cheque received it for the discharge of debt or liability unless proven otherwise. The petitioner failed to provide cogent evidence to rebut this presumption. The courts cited multiple precedents, including Bir Singh vs. Mukesh Kumar and Hiten P. Dalal vs. Bratindranath Banerjee, affirming that the burden of proof lies on the accused to disprove the existence of debt or liability. 5. Appropriateness of the Sentence and Compensation Awarded: The Sessions Judge set aside the imprisonment but upheld the compensation of Rs. 12,50,000/-. The court noted that fourteen years had passed since the issuance of the cheque, and despite the leniency shown by setting aside the imprisonment, the petitioner had not paid the remaining compensation of Rs. 4,00,000/-. The court affirmed the judgment of the Sessions Judge, finding it in accordance with law and justified under the circumstances. Conclusion: The judgment/order dated 29.08.2019 by the Learned Additional District and Sessions Judge, 1st Fast Track Court, Calcutta, affirming partly the order dated 19.11.2016 by the Learned Metropolitan Magistrate, 12th Court, Calcutta, was upheld. The petitioner is directed to pay the balance compensation within two months, failing which he will undergo the sentence in default of payment. All connected applications were disposed of, and the interim order, if any, was vacated.
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