2023 (10) TMI 46 - HC - Indian Laws

Dishonour of cheque - acquittal of accused - insufficient funds - rebuttal of presumption under Section 139 of N.I. Act - HELD THAT - In the case in hand, the learned Trial Court did not appreciate this fact that the respondent did not deny the signature over the cheques of his account and the appellant proved this fact that the cheques were given by the respondent which were dishonored at the bank and despite receiving notice, the respondent did not pay the cheque amount. The respondent did not rebut these facts and documents filed by the appellant and in the statement of the respondent/accused, he admitted his signature over cheques of his account, as such presumption is in favour of the appellant under Section 139 of the NI Act. Therefore, the finding recorded by the Trial Court is not in accordance with law. In the case of NI Act, the complainant has only to prove the fact that the cheque in question was issued by the accused in discharge of any debt or liability to the complainant and under Section 139 of the Act, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for discharge, in whole or in part, or any debt or other liability - the finding recorded by the learned Trial Court is not in accordance with the law, as such the impugned judgment being not sustainable in law is liable to be set aside. The impugned judgment passed by the learned Trial Court dated 23.10.2018 is hereby set aside - the acquittal appeal is allowed.

Summary

Issues involved: Appeal against acquittal under Section 138 of Negotiable Instrument Act.

Summary:
1. The appellant filed a complaint under Section 138 of the Negotiable Instrument Act against the respondent for dishonoring three cheques issued for repayment of a loan. The Trial Court acquitted the respondent, leading to this appeal.

2. The appellant argued that the Trial Court erred in dismissing the complaint due to lack of document proving proprietorship, despite the cheques being issued in the name of the appellant's firm. The Trial Court failed to consider the presumption under Section 139 of the NI Act when the respondent admitted to signing the cheques.

3. The appellant presented witnesses and evidence supporting the complaint, while the respondent denied the allegations but admitted to signing the cheques. The respondent failed to rebut the presumption under Section 139 of the Act.

4. Citing the Supreme Court's ruling in Sumeti Vij vs M/s Paramount Tech Fab Industries, the Court emphasized the presumption in favor of the holder under Section 139 of the NI Act. The Trial Court's judgment was deemed contrary to law, leading to the setting aside of the acquittal.

5. Consequently, the appeal was allowed, and the respondent was held guilty under Section 138 of the Act. The respondent was sentenced to pay a fine of Rs.5 Lakhs to the appellant within 3 months, with a default provision of 1-year rigorous imprisonment if the fine is not paid.