2014 (1) TMI 528 - SC - Companies Law

Dishonour of Cheque - Lacuna in evidence - Trial Court acquitted accused - High Court convicted accused - Held that - respondent was not even aware of the date when substantial amount of ₹ 1,50,000/- was advanced by him to the appellant, that he was not sure as to who wrote the cheque, that he was not even aware when exactly and where exactly the transaction took place for which the cheque came to be issued by the appellant. Apart from the said serious lacuna in the evidence of the complainant, he further admitted as PW.1 by stating once in the course of the cross-examination that the cheque was in the handwriting of the accused and the very next moment taking a diametrically opposite stand that it is not in the handwriting of the accused and that it was written by the complainant himself, by further reiterating that the amount in words was written by him. Such a serious lacuna in the evidence of the complainant, which strikes at the root of a complaint under Section 138, having been noted by the learned trial Judge, which factor was failed to be examined by the High Court while reversing the judgment of the trial Court, in our considered opinion would vitiate the ultimate conclusion reached by it. In effect, the conclusion of the learned Judge of the High Court would amount to a perverse one and, therefore, the said judgment of the High Court cannot be sustained - Decided in favour of appellant.

Summary

Issues involved:
Appeal against judgment under Section 138 of the Negotiable Instruments Act.

Detailed Analysis:

1. Background of the Case:
The appeal was filed against the judgment of the High Court of Kerala under Section 138 of the Negotiable Instruments Act. The complaint alleged that the appellant borrowed a sum of Rs.1,50,000 and issued a cheque which bounced due to insufficient funds. The case was tried by the Chief Judicial Magistrate, where the appellant was acquitted.

2. Trial Court's Findings:
The respondent was examined as a witness, and various exhibits were marked. The appellant, during questioning, claimed that his son took the cheque and denied borrowing any money. The Chief Judicial Magistrate found defects in the respondent's case, including contradictions and lack of supporting documents, leading to the appellant's acquittal.

3. High Court's Judgment:
The High Court reversed the trial Court's judgment, convicted the appellant, and imposed a fine of Rs.1,50,000. The High Court relied on the failure of the appellant to reply to the lawyer's notice and drew presumptions under Sections 118 and 139 of the Negotiable Instruments Act.

4. Supreme Court's Analysis:
The Supreme Court reviewed the evidence and found serious lacunae in the respondent's case. The Court noted contradictions in the respondent's statements regarding the cheque and the transaction details. The High Court's failure to address these defects led the Supreme Court to conclude that the judgment was erroneous and based on a perverse interpretation of the evidence.

5. Conclusion:
Based on the above analysis, the Supreme Court allowed the appeal, set aside the High Court's judgment, and acquitted the appellant. The Court emphasized the importance of meeting statutory requirements and establishing a clear case under Section 138 of the Negotiable Instruments Act, which the respondent failed to do in this instance.