2023 (8) TMI 343 - HC - Indian Laws

Dishonour of Cheque - misuse of blank cheque - passing of consideration as contained in Section 118 of NI Act - presumption that the holder of a cheque received the same of the nature referred to in Section 138, for the discharge, in whole or in part, of any debt or other liability - rebuttable presumption or not - HELD THAT - The presumption under Section 139 is rebuttable in nature. If the basis for drawing a presumption under Section 139 of the N.I.Act exists, the court shall draw a presumption under the said Section, in which case the evidential burden will be on the accused to prove that there was no debt or liability. Whether the presumption is rebutted or not would depend upon the facts and circumstances of each case. As stated already, PW1 gave evidence that the cheque in question was issued by the revision petitioner towards the discharge of the loan liability. Both courts below found that the evidence tendered by PW1 is sufficient to prove the execution of the cheque. The defence case is that, the cheque in question was issued in blank as a security by the revision petitioner at the time of executing the hire purchase agreement. When a blank cheque leaf is voluntarily signed and handed over by the accused towards some payment, it would attract presumption under Section 139 of the N.I.Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. It is true that the respondent No.1 re-possessed the vehicle and sold it. But the evidence on record would show that after repossessing the vehicle, the notice was issued for the balance amount and in response of the said notice, the revision petitioner as the surety of the borrower appeared before the respondent No.1 and issued Ext.P1 cheque towards the final settlement. It is settled that the revisional jurisdiction under Sections 397 and 401 of Cr.PC is to confer power upon superior criminal courts a kind of paternal or supervisory jurisdiction, in order to correct miscarriage of justice arising from misconception of law, irregularity of procedure, neglect of proper precautions or apparent harshness of treatment - It has been consistently held by the apex court that the jurisdiction of the High Court in revision is severely restricted and it cannot embark upon re-appreciation of evidence. Since there are concurrent findings of the two courts below, this Court would be circumspect in invoking the revisional powers under Sections 397 r/w 401 of the Code of Criminal Procedure. It is only if the decisions rendered by the courts below can be said to be either perverse, arbitrary or capricious, this Court can invoke such powers - Both the courts below concurrently found that the cheque in question was issued towards the legally enforceable debt and execution of it has been satisfactorily proved. There are no impropriety or illegality in the judgments of the court below warranting interference under the exercise of revisional powers vested with the courts. Thus the judgment of conviction rendered by both the court below does not warrant any interference. The revision petitioner shall appear before the trial court within two months from today to suffer the imprisonment till rising of the court. On that day, he shall deposit the fine amount of Rs.77,000/- also. In default of payment of fine amount, the revision petitioner shall suffer simple imprisonment for a period of three months - revision petition allowed in part.

Summary

Issues Involved:
1. Criminal prosecution under Section 138 of the Negotiable Instruments Act
2. Validity of presumption under Section 139 of the N.I. Act
3. Exercise of revisional jurisdiction under Sections 397 and 401 of Cr.PC

Summary:

Issue 1: The accused, a revision petitioner, challenged a criminal prosecution under Section 138 of the Negotiable Instruments Act. The petitioner stood as surety for a hire purchase loan availed by his son, who defaulted on repayment, leading to a due amount. The petitioner issued a cheque which was dishonored, resulting in the prosecution. The trial court convicted the petitioner, which was upheld by the appellate court.

Issue 2: The N.I. Act raises presumptions regarding consideration and the nature of the cheque under Sections 118, 138, and 139. The evidential burden shifts to the accused to disprove the debt or liability once the presumption under Section 139 is established. In this case, evidence showed the cheque was issued towards loan repayment. The defense claimed the cheque was a blank security, but without evidence to the contrary, the presumption under Section 139 applied. The court also considered the repossession of the vehicle and subsequent settlement attempts.

Issue 3: The High Court, in exercising revisional jurisdiction under Sections 397 and 401 of Cr.PC, found that interference was not warranted as the lower courts' findings were not perverse. Revisional powers are limited to correcting miscarriages of justice due to legal errors or procedural irregularities, not for re-evaluating evidence. The court reduced the substantive sentence of imprisonment imposed by the lower courts to till rising of the court, considering the nature of the business transaction and the amount due.

The judgment allowed the revision petition in part, reducing the substantive sentence of imprisonment and directing the petitioner to appear before the trial court, deposit the fine amount, and pay compensation to the complainant. Failure to comply would result in coercive measures by the trial court.