2020 (12) TMI 413 - HC - Indian Laws

Dishonor of Cheque - blank cheques were issued to the complainant in repayment of the loan transaction - legally enforceable debt or not - rebuttal of presumption - burden of prove not discharged - HELD THAT - It is well settled law that a revision against concurrent findings of conviction and sentence, the High Court does not, in the absence of perversity upset factual findings arrived at by the trial court. It is not for the revisional court to re-analyse and re- interpret the evidence on record in a case where the trial court and appellate court have come to a probable conclusion. On going through the concurrent findings, this Court is of the view that the both the trial court and appellate court concurrently construed the presumptions under Section 139 of the Act in accordance with law. 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. In the case at hand, the accused has no case that he 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. Although DW1 was examined before the trial court, he had no direct knowledge regarding the transaction between the parties. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability. In Bir Singh v. Mukesh Kumar 2019 (2) TMI 547 - SUPREME COURT the Supreme Court held that in view of Section 139 of the Act read with Section 118 of the Act thereof, the Court has to presume that the cheque has been issued for discharging a debt or liability. The burden was on the accused to prove that the blank cheques were issued to the complainant in repayment of the loan transaction. The burden has not been discharged. It has come out in evidence that the prosecution was initiated against the accused by the complainant in accordance with the scheme of the N.I.Act - the complainant has succeeded in proving that the accused borrowed an amount of ₹ 2,00,000/- from the complainant and issued Ext.P1 cheque for a legally enforceable debt. This Court is of the view that the trial court rightly convicted the accused for the offence punishable under Section 138 of the N.I.Act - Revision allowed in part.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Burden of proof on the accused regarding the issuance of the cheque.
3. Application of presumptions under Sections 118 and 139 of the Act.
4. Analysis of evidence and concurrent findings of the trial court and appellate court.
5. Alteration of sentence from imprisonment to fine.

Issue 1: Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The case involved the accused borrowing a sum and issuing a cheque that was dishonored due to insufficient funds. The complainant filed a criminal complaint under Section 138 of the Act, and the accused was convicted by the trial court. The High Court upheld the conviction, emphasizing the presumption that a cheque is issued for discharging a debt unless proven otherwise. The accused's defense that the cheques were not for repayment was not substantiated, leading to the conviction.

Issue 2: Burden of proof on the accused regarding the issuance of the cheque:
The accused failed to prove that the blank cheques issued were not for repayment of a loan. The court noted that the accused did not dispute the issuance or signature on the cheque, and his defense of altering the cheque's details was not supported by sufficient evidence. The burden of proof was on the accused to establish a credible defense, which was not met in this case.

Issue 3: Application of presumptions under Sections 118 and 139 of the Act:
The court analyzed Sections 118 and 139 of the Act, which provide presumptions related to negotiable instruments like cheques. It highlighted that once the execution of a negotiable instrument is proved or admitted, certain presumptions come into play, including the instrument being made for consideration and to discharge a debt. These presumptions shift the burden of proof to the accused to rebut them, which the accused failed to do effectively in this case.

Issue 4: Analysis of evidence and concurrent findings of the trial court and appellate court:
The High Court respected the concurrent findings of the trial court and appellate court, stating that unless there is perversity, factual findings should not be disturbed in revision. The courts correctly applied the legal presumptions under the Act, and the accused's arguments were found lacking in merit due to insufficient evidence to counter the presumptions.

Issue 5: Alteration of sentence from imprisonment to fine:
Regarding the sentence, the court considered the option of altering the sentence from imprisonment to a fine. The court found it appropriate to change the sentence to a fine of the same amount as the compensation, with a provision for imprisonment in default of payment. The accused was given a time extension to pay the fine due to the prevailing circumstances of the Covid-19 pandemic.

In conclusion, the High Court upheld the conviction of the accused under Section 138 of the Negotiable Instruments Act, emphasizing the importance of proving a credible defense when faced with legal presumptions. The court altered the sentence to a fine, providing the accused with an extended time frame to pay the compensation amount.