2020 (12) TMI 508 - HC - Indian Laws

Dishonor of Cheque - accused failed to pay the dishonoured cheque amount - rebuttal of presumption or not - allegation that the complainant has proved beyond reasonable doubt that the accused has committed the alleged offence punishable under Section 138 of the N.I. Act - HELD THAT - In the cross-examination of PW-1 throughout, the accused at various places has elicited several replies of ignorance from the witness about the alleged liability of the accused towards the complainant. Certain discrepancies in the loan agreement itself at Exs.P9 and P10 were elicited in the cross-examination of PW-1 including that Ex.P10 is silent about who has paid the loan amount to whom and what was the alleged agreed rate of interest? It was also elicited in the cross-examination of PW-1 that the alleged premiums towards the insurance of the vehicle which was the subject matter of the loan transaction was paid by the accused. However from the accused side, it was also elicited from the very same witness in the cross-examination that the alleged statement of the loan account at Ex.P11 still shows a liability of ₹ 40,000/- as towards insurance deposit. No doubt, PW-1 attempted to patch up the said discrepancy by stating that a rebate has been given towards the said loan. However, the very same witness in the subsequent sentence has also stated the alleged rebate does not give the details as to towards which all acts and to what amount the rebate was given. It goes to show that since the accused in Ex.P11 has shown a sum of ₹ 40,000/- as a liability towards the insurance amount in spite of the admitted fact that the said amount was paid by the accused, the very correctness and trustworthiness of the statement of accounts at Ex.P11 becomes doubtful - Similarly the very same statement of accounts though gives a deduction of ₹ 1,57,434/- towards the receipt of monthly hire rentals but as was told by PW-1 in his cross-examination to a specific query by the accused, that the said statement does not give the complete details of how many instalments of what amount was received by the complainant from the accused. Therefore as rightly submitted by the learned counsel for the respondent, the correctness of the statement of accounts at Ex.P11 becomes more doubtful. The defence of the accused that there existed no legally enforceable debt equivalent to the cheque amount as on the date of presentation of the cheque gains more reasons to believe and accept, than believing the version of the complainant that the cheque amount was the outstanding liability from the accused - Once the accused has successfully rebutted the presumption under S.139 of the N.I. Act, the onus shifts back to the complainant. However, the complainant failed to discharge its burden of proving the alleged liability from the accused, equivalent to the cheque amount. Considering the said fact, the Trial Court has rightly held that the complainant has failed to prove beyond reasonable doubt that the accused has committed the offence punishable under Section 138 of the N.I. Act - the order acquitting the accused of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 stands confirmed - appeal dismissed.

Summary

Issues:
1. Whether the complainant has proved beyond reasonable doubt that the accused committed the offence under Section 138 of the Negotiable Instruments Act?
2. Whether the Trial Court's judgment warrants interference in this appeal?

Analysis:
1. The complainant alleged that the accused issued a cheque for ?7,90,000, which was dishonored due to insufficient funds. The complainant presented evidence including the dishonored cheque, legal notice, and loan agreements. The complainant's witness, PW-1, testified and provided documentary evidence to support the claim. The accused did not present any witnesses or documents. The Trial Court acquitted the accused, leading to the appeal.

2. The witness, PW-1, testified to the loan transactions between the parties. The accused had availed a loan from the complainant after clearing a previous loan. The accused did not dispute the issuance of the cheque but claimed it was not for the existing loan. The defense argued that there was no legally enforceable debt at the time of the cheque presentation. The defense highlighted discrepancies in the loan agreement and statement of accounts, casting doubt on the outstanding liability.

3. The defense successfully rebutted the presumption of debt under Section 139 of the N.I. Act. The accused's cross-examination exposed inconsistencies in the statement of accounts, raising doubts about the outstanding amount. The Trial Court found that the complainant failed to prove the liability equivalent to the cheque amount. The judgment was based on a proper analysis of the evidence, leading to the dismissal of the appeal and confirmation of the accused's acquittal under Section 138 of the N.I. Act.

Conclusion:
The High Court dismissed the appeal and upheld the Trial Court's judgment acquitting the accused of the offence under Section 138 of the Negotiable Instruments Act, 1881. The Court found that the complainant failed to prove the existence of a legally enforceable debt equivalent to the cheque amount, leading to the confirmation of the acquittal.