2017 (8) TMI 453 - HC - Indian Laws

Dishonoring of cheque - offence under Section 138 of the Negotiable Instruments Act - whether the cheque was issued for towards discharge of debt or other liability as envisaged under Section 138 of the Act? - Held that - There was no dispute with regard to the compromise Ex.CW2/X or the issuance of the post dated cheques in favour of the respondent. These facts not only proved by the respondent and his witnesses but even admitted by the witnesses examined by the petitioner. It is further proved on record that petitioner did not have sufficient funds in his account as it stands duly proved that petitioner had only ₹ 1309/- in his account. Petitioner had though tried to prove that he himself ordered stop payment because the land was already in the name of the Parkash Chand but the record clearly belies the version put-forth as it is a case where the cheque has not been dishonoured on account of stop payment but on account of insufficient funds . Further story put up by the petitioner through DW3 Anil Gupta that respondent was not in a position to execute the sale deed and therefore he got the payment stopped is also not borne out or rather is contrary to the record and again deserves to be rejected for the aforesaid reasons. The findings record by the learned Courts below appears to have been based upon the correct appreciation of the pleadings and evidence and otherwise are in tune with law and therefore, warrants no interference. No merit in this revision petition

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Scope and power of revisional jurisdiction.
3. Presumptions under Sections 118(a), 138, and 139 of the Negotiable Instruments Act.
4. Legally enforceable debt or liability.
5. Non-joinder of necessary parties.
6. Appreciation of evidence and findings of lower courts.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The petitioner was convicted for issuing a cheque which was dishonored due to insufficient funds. The complainant/respondent had filed a complaint under Section 138 of the Act, stating that the petitioner issued a cheque amounting to ?53,200/- to discharge his liability. The cheque was dishonored, and despite receiving a legal notice, the petitioner did not make the payment. The trial court convicted the petitioner, sentencing him to three months of rigorous imprisonment and imposing a fine of ?30,000/-, of which ?20,000/- was to be paid as compensation to the complainant.

2. Scope and power of revisional jurisdiction:
The court emphasized that revisional jurisdiction should be exercised in exceptional cases where there is a glaring defect in the proceedings or a manifest error of law leading to a miscarriage of justice. Citing several Supreme Court judgments, the court noted that this power is discretionary and should be exercised judiciously, not arbitrarily or lightly. It is not appropriate for the High Court to reappreciate evidence unless there is a glaring feature indicating a gross miscarriage of justice.

3. Presumptions under Sections 118(a), 138, and 139 of the Negotiable Instruments Act:
Section 118(a) presumes that every negotiable instrument was made for consideration. Section 138 deals with the dishonor of cheques for insufficient funds, making it an offense with specified conditions. Section 139 presumes that the holder of a cheque received it for the discharge of a debt or liability unless proven otherwise. The court noted that these sections impose a strict liability to ensure the credibility of cheques as negotiable instruments.

4. Legally enforceable debt or liability:
The court reiterated that the existence of a legally enforceable debt or liability is essential for an offense under Section 138. The petitioner argued that the case was a civil dispute and not covered under the Act. However, the court found that the petitioner had issued the cheque as part of a compromise agreement to pay for land he had unauthorizedly occupied. The cheque was dishonored due to insufficient funds, and the petitioner failed to rebut the presumption of liability.

5. Non-joinder of necessary parties:
The petitioner contended that the complaint was bad for non-joinder of necessary parties, specifically Smt. Prabhi Devi and Parkash Chand. However, the court found that the facts of the case did not warrant such a conclusion. The petitioner had issued the cheque as part of a compromise agreement, and there was no evidence to suggest that the non-joinder of these parties affected the case.

6. Appreciation of evidence and findings of lower courts:
The court reviewed the evidence presented by both parties. The complainant had proven the dishonor of the cheque due to insufficient funds, and the petitioner’s defense of "stop payment" was not supported by the record. The lower courts had correctly appreciated the evidence and found the petitioner guilty. The court concluded that the findings were based on a correct appreciation of pleadings and evidence, and there was no reason to interfere with the judgment.

Conclusion:
The revision petition was dismissed, and the conviction and sentence imposed by the lower courts were upheld. The court found no merit in the petitioner’s arguments and affirmed the lower courts' findings based on the evidence and applicable law.

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