2020 (10) TMI 726 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - discharge of a legally enforceable debt or not - offence punishable under section 138 of NI Act or not - HELD THAT - It is the duty of the accused before the court by adducing evidence to show that the cheque was not supported by consideration and that there was no debt or liability to be discharged as alleged. It is necessary on the part of the accused to set up a probable defence for getting the burden of proof shifted to the complainant. Once such rebuttable evidence is adduced and accepted by the court, the burden shifts back to the complainant. Having regard to the materials on record, this Court is of the view that the accused failed to adduce evidence to rebut the presumption or a probable case to shift the burden to the complainant. It is well settled law that in a revision against conviction and sentence rendered concurrently by the trial court as well as the appellate court, the High Court does not, in the absence of perversity, upset factual findings arrived at by the appellate court. It is not for the revisional court to re-analyse and re-interpret the evidence on record in a case where the appellate court has come to a probable conclusion. On going through the impugned judgment, this Court is of the view that the appellate court correctly applied the presumption under Section 139 of the Act. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the Act for the discharge, in whole or in part, of any debt or other liability. On a perusal of the entire evidence, it is disclosed that Ext.P2 cheque was issued to the complainant. The cheque was presented in time. Notice was issued calling upon the accused to pay the amount covered under the cheque within 15 days from the date of receipt of the notice in accordance with law. The amount was not paid as demanded. Hence, all the legal formalities under Section 138 of the NI Act have been complied with - In the case at hand, the accused has no case that she has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that unfilled cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability. In view of the above, this Court is of the view that the trial court and the appellate court rightly entered a finding that Ext.P2 cheque was issued for a legally enforceable debt. Accordingly, the case of the complainant has been proved beyond reasonable doubt. The offence punishable under Section 138 of the NI Act is punishable with imprisonment or with fine or with both. Considering the fact that the accused is a lady aged 66 years, it is not necessary to impose compulsory imprisonment on her. Hence, the sentence imposed is liable to be modified - application allowed in part.

Summary

Issues:
1. Conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881.
2. Presumptions under Sections 118 and 139 of the Act.
3. Evidence of Power of Attorney holder.
4. Compliance with legal formalities under Section 138 of the NI Act.
5. Modification of sentence for the accused.

Issue 1: Conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881:
The revision petition challenges the conviction and sentence imposed on the accused under Section 138 of the NI Act. The trial court convicted the accused for issuing a cheque that was dishonored due to insufficient funds. The appellate court modified the sentence to six months of simple imprisonment and a fine of &8377; 2,50,000. The accused, feeling aggrieved, approached the High Court for revision.

Issue 2: Presumptions under Sections 118 and 139 of the Act:
The judgment discusses the importance of presumptions under Sections 118 and 139 of the Act in cases under Section 138. It emphasizes that once the execution of a negotiable instrument is proved or admitted, certain presumptions come into play, shifting the burden of proof to the accused. The accused must provide evidence to rebut these presumptions. In this case, the court finds that the accused failed to adduce evidence to shift the burden back to the complainant, thereby upholding the lower courts' findings based on these presumptions.

Issue 3: Evidence of Power of Attorney holder:
The defense argued that the Power of Attorney holder was not aware of the transaction between the parties, casting doubt on the validity of the transaction. However, the court found that the evidence presented by the Power of Attorney holder was credible and established her awareness of the transaction, dismissing the defense's contention.

Issue 4: Compliance with legal formalities under Section 138 of the NI Act:
The judgment confirms that all legal formalities under Section 138 of the NI Act were duly complied with in this case. The accused issued the cheque, which was presented on time, and the necessary notices were sent and acknowledged. The court found that the complainant had followed the legal procedures outlined in the Act.

Issue 5: Modification of sentence for the accused:
Considering the age of the accused, who is a 66-year-old lady, the court modified the sentence imposed by the lower courts. The accused was directed to pay a fine of &8377; 2,50,000 and given six months to deposit the amount. Failure to pay the fine would result in six months of simple imprisonment. The fine amount, if paid, would be released to the complainant as compensation under the Code of Criminal Procedure.

In conclusion, the High Court allowed the revision petition in part, modifying the sentence for the accused based on the circumstances presented during the proceedings.