2018 (11) TMI 1094 - HC - Indian Laws

Dishonor of Cheque - section 138 of Negotiable Instruments Act - failure to rebut the presumption under section 138 of Negotiable Instruments Act - only ground raised by the revision petitioner is that the cheques were given for security purpose and the same was however misused despite of receipt of entire sale consideration of ₹ 13,50,000/-. Held that - The property was sold for a sum of ₹ 33,11,000/-. Therefore this court is not in a position to accept the case of the revision petitioner projecting as if the property was sold at ₹ 13,50,000/- and the entire sale consideration was paid - It is equally important to note that there is neither any evidence nor any documents put forth by the revision petitioner supporting his case. Though it is claimed by the revision petitioner that the entire sale consideration was paid as per his promise, absolutely there is no material or a piece of paper to support his claim. The statutory presumption raised under section 118 of Negotiable Instruments Act as against the revision petitioner as subject cheques were issued for the sum indicated in the cheque towards a legally enforceable debt and liability, which the revision petitioner had to repay to the original complainant towards the sale price received by him as power agent. In the case on hand admittedly while drawing a presumption in favor of the respondent as contemplated under section 139 of Negotiable Instruments Act, that the cheques were issued to the complainant for the discharge of debt or other liability, the fact remains that such presumption is not rebutted by the revision petitioner - there is no irregularity or infirmity over the findings of the courts below holding the revision petitioner guilty of offence under section 138 of Negotiable Instruments Act. This court had also ensured that all the statutory requirements falling under section 138(a-c) of NI Act is duly complied with before institution of the subject complaint. The Criminal revision fails and is dismissed.

Issues involved:
1. Confirmation of Judgment of Sentence under Section 138 of Negotiable Instruments Act.
2. Allegation of fraudulent intention in presenting cheques for encashment.
3. Failure to rebut statutory presumption under Section 118 of Negotiable Instruments Act.
4. Discrepancy in sale consideration amount and lack of evidence to support the claim.
5. Application of statutory presumption under Section 139 of Negotiable Instruments Act.
6. Compliance with statutory requirements under Section 138(a-c) of NI Act.

Issue 1: Confirmation of Judgment of Sentence under Section 138 of Negotiable Instruments Act
The criminal revision was filed against the order confirming the Judgment of Sentence imposed on the Revision Petitioner under Section 138 of Negotiable Instruments Act. The Revision Petitioner was held guilty for issuing cheques that were later presented for encashment but returned due to insufficient funds. Both the District and Sessions Court and the Fast Track Court had found the Revision Petitioner guilty of the offence.

Issue 2: Allegation of fraudulent intention in presenting cheques for encashment
The Revision Petitioner claimed that the complainant, with fraudulent intent, presented the cheques for encashment despite receiving the full sale consideration. The complainant alleged that the Revision Petitioner sold the property for a higher amount than initially informed. The Revision Petitioner issued post-dated cheques as security, but they were returned due to insufficient funds, leading to the complaint under Section 138 of NI Act.

Issue 3: Failure to rebut statutory presumption under Section 118 of Negotiable Instruments Act
The Trial Court and the Appellate Court held that the Revision Petitioner failed to rebut the presumption under Section 118 of NI Act, which assumes that the cheques were issued for a legally enforceable debt or liability. The Revision Petitioner could not provide evidence to support the claim that the entire sale consideration was paid, leading to the confirmation of guilt under Section 138 of NI Act.

Issue 4: Discrepancy in sale consideration amount and lack of evidence to support the claim
The Revision Petitioner claimed that the property was sold for a lower amount than stated by the complainant. However, the sale deeds revealed a higher sale consideration, contradicting the Revision Petitioner's assertion. Lack of evidence or documentation supporting the claim of full payment of sale consideration weakened the Revision Petitioner's defense.

Issue 5: Application of statutory presumption under Section 139 of Negotiable Instruments Act
The courts applied the statutory presumption under Section 139 of NI Act, assuming that the cheques were issued to discharge a debt or liability. Since the Revision Petitioner failed to rebut this presumption and provide substantial evidence of full payment, the guilt under Section 138 of NI Act was upheld.

Issue 6: Compliance with statutory requirements under Section 138(a-c) of NI Act
The High Court confirmed that all statutory requirements under Section 138(a-c) of NI Act were duly complied with before the institution of the complaint. The courts below had appropriately considered the evidence and legal provisions before confirming the Judgment of Sentence imposed on the Revision Petitioner.

In conclusion, the High Court dismissed the criminal revision, confirming the judgments of the lower courts. The Revision Petitioner's failure to rebut the statutory presumptions and provide evidence supporting the claim of full payment of sale consideration led to the upholding of guilt under Section 138 of Negotiable Instruments Act.

← Previous Next →