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2018 (7) TMI 706 - HC - Indian LawsDishonor of cheque due to insufficiency of funds - Non-payment of part of amount related to purchase of property - liability towards electricity dues as on the date of the sale deed - appellant claims to have issuued two cheques subsequently for discharge of his liability but the respondent denies of the same - Section 138 of the Negotiable Instrument Act. Liability towards electricity dues as on the date of the sale deed - Held that - It is absolutely clear that the respondent has merely raised a bogie of there being some outstanding electricity dues from the time when Gulzar Singh occupied the property in question. There is absolutely no basis for the same. It is not the case of the respondent that the electricity supply company i.e., BSES Yamuna Power Ltd. has raised any demand in respect of the electricity meters installed in his premises, ever since he came in occupation of the same. It is evident that the cheque of ₹ 5,00,000/- was issued by the respondent towards the balance sale consideration. May be, the same was left with Surender Kumar, till such time as the appellant satisfies the respondent with regard to the apprehended outstanding electricity bills, whereafter, the balance payment of ₹ 5,00,000/- was to be handed over to the appellant. Only this arrangement explains issuance of the said cheque of ₹ 5,00,000/- by the respondent and its being handed over to a third party, namely, Surender Kumar as claimed by the respondent. The appellant has proved beyond all reasonable doubt that the cheque in question was issued by the accused in discharge of a legally recoverable debt. It has also proved that the said cheque has been dishonoured upon presentation and, despite issuance of statutory notice of demand within the period of limitation, the amount has not been paid by the accused. The defence set up by the accused has not been probablised and he has not been able to create any doubt in the mind of the Court that the said cheque was not issued towards discharge of a legally recoverable debt. The respondent accused has not been able to rebut the presumption arising in favour of the appellant holder of the cheque. The respondent accused is held guilty for commission of the offence under Section 138 of the Negotiable Instruments Act - appeal allowed - decided in favor of appellant.
Issues Involved:
1. Existence of legal liability for the cheque issued. 2. Whether the cheque was issued towards discharge of a legally recoverable debt. 3. The defense of the accused regarding the issuance of the cheque. 4. The credibility of the witnesses and evidence presented. Detailed Analysis: 1. Existence of Legal Liability for the Cheque Issued: - The appellant claimed that the respondent purchased a property and issued a cheque for ?5,00,000 as part of the payment, which was dishonored due to "insufficient funds". - The appellant served a legal demand notice, but the respondent did not make the payment, leading to the filing of a complaint under Section 138 of the Negotiable Instruments Act. - The learned Metropolitan Magistrate (MM) acquitted the respondent, stating that the appellant failed to show any legal liability on the part of the respondent for which the cheque was issued. 2. Whether the Cheque was Issued Towards Discharge of a Legally Recoverable Debt: - The appellant argued that the cheque was part of the balance payment for the property sold to the respondent. - The respondent claimed that the cheque was issued as security for outstanding electricity dues, which the appellant was supposed to clear. - The learned MM found discrepancies in the appellant's claim, noting that the sale deed recorded the consideration as ?4,00,000, but the appellant claimed ?20,00,000 with ?15,00,000 received in cash. - The court observed that the appellant did not explain how the remaining ?1,00,000 was to be recovered, and the claim of ?1,00,000 for building material was not mentioned in the sale deed, legal notice, or complaint. 3. The Defense of the Accused Regarding the Issuance of the Cheque: - The respondent stated that the cheque was issued as security for electricity dues and handed over to a broker, Surender Kumar. - The learned MM rejected this defense, finding it against the natural course of human behavior, as the obligation to pay electricity dues was on the appellant. - The appellant's counsel argued that the respondent's defense was unsubstantiated, as no receipt or witness was produced to support the claim of cash payment. - The court noted that the respondent did not take any action against Surender Kumar or issue stop payment instructions, which weakened his defense. 4. The Credibility of the Witnesses and Evidence Presented: - The appellant examined himself and his son as witnesses, while the respondent examined two witnesses, Malkeet Singh and Kewal Singh. - The court found the defense witnesses unreliable, as they lacked personal knowledge of the transaction and did not provide credible evidence. - The learned MM observed that the appellant's claim of receiving the cheque alone was contradicted by his son's testimony, creating a discrepancy. - The court emphasized that the accused's statement under Section 313 CrPC is not evidence and must be corroborated by other evidence, which was not done in this case. Conclusion: - The court concluded that the appellant proved beyond reasonable doubt that the cheque was issued in discharge of a legally recoverable debt. - The respondent's defense was found implausible and unsubstantiated. - The presumption under Section 139 of the NI Act was not rebutted by the respondent. - The impugned judgment was set aside, and the respondent was convicted under Section 138 of the Negotiable Instruments Act.
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