2024 (10) TMI 888 - HC - Indian Laws

Dishonour of Cheque - challenge to conviction and sentence under Section 138 of the Negotiable Instruments Act - applicability of presumption under Sections 118 and 139 of the Negotiable Instruments Act - HELD THAT - In the instant case, there is no specific denial, if any, on the part of the accused with regard to his having issued Cheques as well as his signatures thereupon, rather, in his statement recorded under Section 313 Cr.P.C., he admitted complainant to be his acquaintance as well as factum of his having purchased the material, but for less amount. He categorically deposed that he had issued blank Cheque as a security, which subsequently came to be misused by the complainant. However, to probablize the aforesaid defence, no cogent and convincing evidence ever came to be led on record at the behest of accused, as such, no illegality can be said to have been committed by the learned Appellate Court while upholding the judgment of conviction and order of sentence recorded by learned trial Court. Since in the case at hand, factum of issuance of Cheques as well as his signatures thereupon never came to be refuted at the behest of accused, no illegality can be said to have been committed by both the Courts below while invoking Sections 118 and 139 of the Act, which speak about presumption in favour of the holder of the Cheque that Cheque was issued towards discharge of a lawful liability. No doubt, aforesaid presumption is rebuttable, but to rebut such presumption, accused either can refer to the documents and evidence led on record by the complainant or presumption can be rebutted by leading positive evidence, if any. The Hon ble Apex Court in M/s Laxmi Dyechem V. State of Gujarat, 2012 (12) TMI 106 - SUPREME COURT , has categorically held that if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. To raise probable defence, accused can rely on the materials submitted by the complainant. Needless to say, if the accused/drawer of the Cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, statutory presumption under Section 139 of the Negotiable Instruments Act, regarding commission of the offence comes into play. In the case at hand, complainant while examining himself as CW-1, tendered affidavit Ex.CW1/A wherein he successfully reiterated the contents of the complaint. He successfully proved on record that he had sold articles of hardware and grill gate amounting to Rs.80,000/- to the accused, who with a view to discharge his liability issued two Cheques for sum of Rs.40,000/- each, but same were dishonoured on account of insufficient funds in his bank account vide returning memos Ex.C2 and Ex.C4 - there is no evidence worth credence suggestive of the fact that Cheques in question were issued as a security, but even if it is presumed that Cheques in question were issued as a security, that may not be of much help to the accused for the reason that by now it is well settled that Cheques, if any, issued as a security can also be presented for encashment, if amount taken or promised to be repaid is not paid. This Court finds that all the basic ingredients of Section 138 of the Act are met in the case at hand. Since Cheque issued by accused towards discharge of his lawful liability was returned on account of insufficient funds in the bank account of accused and he despite having received legal notice failed to make the payment good within the stipulated time, complainant had no option but to institute proceedings under Section 138 of the Act, which subsequently rightly came to be decided by both the Courts below on the basis of pleadings as well as evidence adduced on record by the respective parties. This Court sees no valid reason to interfere with the well reasoned judgments recorded by the Courts below, which otherwise, appear to be based upon proper appreciation of evidence available on record and as such, same are upheld. The present criminal revision petition is dismissed being devoid of any merit.

Summary

Issues Involved:

1. Whether the judgments of conviction and sentence under Section 138 of the Negotiable Instruments Act were justified.
2. Whether the presumption under Sections 118 and 139 of the Negotiable Instruments Act was rightly applied.
3. Whether the accused successfully rebutted the presumption of a legally enforceable debt or liability.
4. Whether the High Court can interfere with the concurrent findings of the lower courts in its revisional jurisdiction.

Detailed Analysis:

1. Judgments of Conviction and Sentence Justification:

The primary issue revolves around the conviction of the accused under Section 138 of the Negotiable Instruments Act. The trial court found the accused guilty of issuing two cheques that were dishonoured due to insufficient funds. The Sessions Judge affirmed this conviction and sentence, which included simple imprisonment for two months and compensation of Rs. 1,10,000. The High Court upheld these judgments, finding no error in the appreciation of evidence by the lower courts. The accused's failure to comply with the court's order to deposit the compensation amount further weakened his position.

2. Application of Presumption under Sections 118 and 139:

The courts invoked the presumption under Sections 118 and 139 of the Act, which assumes that the cheque was issued for a lawful liability. The accused admitted to issuing the cheques but claimed they were given as security. However, he failed to provide convincing evidence to support this claim. The High Court noted that the presumption is rebuttable, but the accused did not effectively challenge the existence of a legally enforceable debt, thus failing to rebut the statutory presumption.

3. Rebuttal of Presumption of Legally Enforceable Debt:

The accused attempted to argue that the cheques were issued as security and not for discharging a debt. However, the High Court cited the Supreme Court's ruling in M/s Laxmi Dyechem v. State of Gujarat, which states that the presumption under Section 139 can only be rebutted by establishing a probable defence. In this case, the accused did not present any evidence to contest the amount or the transaction, nor did he respond to the legal notice demanding payment. The High Court concluded that the accused failed to raise a probable defence, thus affirming the presumption of a legally enforceable debt.

4. High Court's Revisional Jurisdiction:

The High Court emphasized its limited jurisdiction under Section 397 of the Cr.P.C., which restricts re-appreciation of evidence unless there is a glaring error leading to a miscarriage of justice. The concurrent findings of the trial court and the Sessions Judge were based on a thorough examination of the evidence, and no material irregularity was found. The High Court referred to precedents that outline the scope of revisional jurisdiction, confirming that unless a gross miscarriage of justice is evident, interference is unwarranted.

Conclusion:

The High Court dismissed the criminal revision petition, finding no merit in the arguments presented by the accused. The judgments of the lower courts were upheld as they were based on proper appreciation of evidence and legal principles. The accused was directed to surrender and serve the sentence, with bail bonds being cancelled. The court reiterated the importance of adhering to statutory presumptions unless effectively rebutted by the accused, thereby affirming the legal framework governing cheque dishonour cases under the Negotiable Instruments Act.