2020 (3) TMI 515 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - legally enforceable debt/liability or not - rebuttal of presumption - Section 139 of Negotiable Instruments Act - HELD THAT - Though the Trial Court has acquitted accused on the basis that complainant did not prove that there was legally enforceable debt or liability, the appeal is dismissed on the basis that complainant was economical with truth and came with tainted hands and any party coming to Court should come with clean hands and speak the truth. This Court have, on many occasions, stated that if a party comes to the Court with unclean hands, which in this case plaintiffs have, the party should be dealt with very strongly and substantial costs also should be imposed on the party. The conduct of complainant intends to impede and prejudice the administration of justice. Judiciary is the bedrock and handmaid of orderly life and civilized society. There is an acquittal and therefore, there is double presumption in favour of accused. Firstly, the presumption of innocence available to accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, accused having secured acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the Trial Court. For acquitting accused, the Trial Court observed that the prosecution had failed to prove its case. Thus, the opinion of the Trial Court cannot be held to be illegal or improper or contrary to law - The order of acquittal cannot be interfered with - appeal dismissed.

Summary

Issues Involved:
1. Legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act, 1881.
2. Presumption of innocence and standards for overturning an acquittal.
3. Complainant's conduct and the principle of clean hands in legal proceedings.

Detailed Analysis:

1. Legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act, 1881:

The complainant alleged that a loan of ?90,000 was given to the accused, who issued a cheque dated 19th April 1997, which was dishonored. A notice under Section 138 was issued on 28th April 1997, to which the accused denied liability. The defense argued that the cheque was given as security for a gas agency agreement, not as repayment of a loan. Evidence showed that a demand draft of ?85,335 was obtained in favor of Mahanagar Gas, and the accused provided a blank signed cheque as security, not for repayment. The trial court found no legally enforceable debt or liability since the cheque was given as security and not for repayment of a loan. The appellate court upheld this finding, noting discrepancies in the complainant's statements and the evidence presented.

2. Presumption of innocence and standards for overturning an acquittal:

The appellate court reiterated principles from Ghurey Lal v. State of U.P., emphasizing that an appellate court can review evidence in appeals against acquittal but must give due weight to the trial court’s decision. The accused's presumption of innocence is bolstered by the trial court's acquittal, and substantial and compelling reasons are required to overturn such a decision. The appellate court found no such reasons, noting that the trial court's conclusions were neither palpably wrong nor based on an erroneous view of the law. The trial court’s judgment was not manifestly unjust or unreasonable, and the appellate court agreed that the prosecution failed to prove its case.

3. Complainant's conduct and the principle of clean hands in legal proceedings:

The appellate court dismissed the appeal on the grounds that the complainant approached the court with unclean hands. The complainant was found to be "economical with truth" and presented a case based on falsehood, which is contrary to the principles of justice. The court cited several judgments, including S.P. Chengalvaraya Naidu v. Jagannath, emphasizing that a party must come to court with clean hands and truthful statements. The court noted that the complainant's conduct intended to impede and prejudice the administration of justice. Although the court did not take further action against the complainant due to the case's age, it underscored the importance of honesty in legal proceedings.

Conclusion:

The appellate court upheld the trial court's acquittal, finding no fault with its judgment. The appeal was dismissed, reinforcing the presumption of the accused's innocence and highlighting the complainant's misconduct. The High Court Legal Services Committee was directed to award fees of ?5,000 to the Amicus Curiae.