2018 (11) TMI 1095 - HC - Indian Laws

Dishonor of Cheque - Section 138 of NI Act - the pivotal contention of the petitioner is that the respondent, being a partner and co-director, had access to all documents, including signed cheques of the petitioner, which he had misused and filed a false complaint against the petitioner. Held that - Admittedly, in the case on hand, legal notice was issued by the complainant on 13.1.2004 and he had sent his reply on 29.1.2004. Thereafter, the respondent complainant filed a private complaint on 4.3.2004. There is a delay of three days. In the order of the Appellate Court, it has been categorically stated that the complainant had filed the complaint with delay and the same has been condoned by the trial court stating that the delay is well explained and bona fide on oral examination made on oath. It is clear that such condonation of delay was done by the trial Court without issuing any notice to the petitioner/accused. When the complainant is claiming that the petitioner is due and payable a sum to the tune of ₹ 60 Lakhs, it is not known as to how he was not diligent in filing the private complaint within the statutory period. That apart, no explanation whatsoever has been adduced by the respondent complainant for the delay. Unless and until the basis of existence of liability is set out by the complainant in the complaint and in the evidence, the Court would be loathe to raise a presumption regarding existence of a legally enforceable debt against the accused. A bald allegation that the accused who advanced the cheque was under an obligation to honour the same is unacceptable. The revision is allowed setting aside the order dated 9.2.2016 passed in Criminal Appeal No.2 of 2013 by the learned VI Additional Sessions Judge, Chennai.

Summary

Issues:
1. Challenge to the order passed in Criminal Appeal No.2 of 2013
2. Delay in filing the private complaint under Section 138 of the Negotiable Instruments Act
3. Condonation of delay without notice to the accused
4. Failure to pass order in consonance with the mandate of the proviso added to Section 142 of the Negotiable Instruments Act
5. Issuance of cheques from personal account for partnership firm and limited company liabilities
6. Burden of proof under Section 139 of the Negotiable Instruments Act
7. Failure to prove the existence of liability by the complainant

Analysis:

1. The petitioner challenged the order passed in Criminal Appeal No.2 of 2013, confirming his conviction and sentence under Section 138 of the Negotiable Instruments Act by the learned VI Additional Sessions Judge, Chennai.

2. The delay of three days in filing the private complaint by the respondent was a crucial issue. The trial court condoned the delay without issuing notice to the accused, raising questions about the diligence of the complainant in filing the complaint within the statutory period.

3. The failure to follow the procedure prescribed under Section 142(b) of the Negotiable Instruments Act regarding the condonation of delay was highlighted. The accused was deprived of the opportunity to contest the application, violating principles of natural justice.

4. The petitioner raised concerns about issuing cheques from his personal account for liabilities related to the partnership firm and limited company. The evidence presented regarding the practice of keeping blank signed cheques in the office was a significant point of contention.

5. The burden of proof under Section 139 of the Negotiable Instruments Act was emphasized, indicating that the complainant must establish the existence of a legally enforceable debt before shifting the burden onto the accused to disprove the liability.

6. The complainant's failure to prove the existence of liability and the lack of substantive evidence regarding the debt in question were crucial factors. The Court emphasized the necessity for the complainant to provide clear and proven facts supporting the alleged debt.

7. Considering the various discrepancies and lack of evidence presented by the complainant, the Court allowed the revision, setting aside the order passed in Criminal Appeal No.2 of 2013. The judgment highlighted the importance of meeting legal standards and evidentiary requirements in cases involving financial liabilities and legal complaints.