2021 (2) TMI 746 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - section 138 of Negotiable Instrument Act 1881 - Whether the learned trial court has appreciated the evidence before the court in the light of the sound principles regarding appreciation of evidence in cases arising out of 'Cheque Bounce under Negotiable Instrument Act 1881? - HELD THAT - The question of issuing statutory demand notice under section 138 of N.I Act arose only after receipt of the dishonour memo by the Bank. Before receipt of the said intimation the complainant cannot send or could not send demand notice mentioning future date as a Bank intimation regarding dishonour of cheque. The endorsement by the postal authorities, the seal of the postal department on cover and postal receipts coupled with contents of the said notice clearly indicates that the notice was sent on 03-08-2009 but not on 03-07-2009. The trial court wrongly interpreted the said aspect and without considering the effect of general clause Act section 27 has come to a conclusion that, cause of action on notice dated 03--08-2009 is barred by limitation and wrongly held that the accused is to be acquitted for want of cause of action and bar of limitation in filing complaint. The trial court shall frame proper point for consideration as to the legally enforceable debt or liability and also frame points for consideration as to presumption arising under section 118 and 139 of Negotiable Instrument Act and also to raise a point as to whether the accused has rebutted that presumption by preponderance of probabilities proves that his defense as probable. Without discussing the evidence of complainant or accused in a proper perspective simply stating there are latches in the complainant's case without stating what are those latches the finding is not tenable or legally sustainable. The trial court has committed a serious error in not appreciating the oral and documentary evidence. Except this limitation point no other points have been answered with reference to settled principle of law in appreciating evidence in case of Negotiable Instrument Act or Cheque Bounce case. Therefore, it is wise to set aside the order of the trial court and to remand the case for fresh disposal of case in accordance with law i.e., to hear both the parties and pass appropriate Judgment by giving reasons and findings both on evidence and the law except on the point of limitation which is admittedly within a period of limitation and held in favour of the complainant by this court. Appeal allowed.

Summary

Issues Involved:
1. Whether the trial court properly appreciated the evidence in a cheque bounce case under the Negotiable Instruments Act, 1881.
2. Whether the trial court's judgment of acquittal was illegal, perverse, and required interference by the appellate court.

Detailed Analysis:

Issue 1: Appreciation of Evidence in Cheque Bounce Cases
The appellant challenged the trial court's judgment on the grounds that the trial court did not properly appreciate the evidence in the light of the principles governing cheque bounce cases under the Negotiable Instruments Act, 1881. The trial court acquitted the accused primarily on the technical ground of limitation, without adequately considering whether the statutory presumption under Section 139 of the NI Act was rebutted by the accused. The trial court erroneously concluded that the subsequent notice dated 03-08-2009 was barred by limitation, despite clear evidence that the statutory demand notice was issued within the permissible period after receiving the bank's dishonor memo on 04-07-2009. The appellate court found that the trial court failed to properly evaluate the evidence presented by the complainant, including the bank memo, legal notice, postal receipts, and the returned postal covers marked as Ex.P.9 and Ex.P.10, which clearly indicated that the notice was sent on 03-08-2009.

Issue 2: Legality and Perversity of the Trial Court's Judgment
The appellate court held that the trial court's judgment was illegal and perverse, necessitating interference. The trial court's decision was based on a misinterpretation of the dates on the statutory notice and postal receipts, leading to an erroneous conclusion that the complaint was time-barred. The trial court failed to frame proper points for consideration regarding the legally enforceable debt or liability, the presumption under Sections 118 and 139 of the NI Act, and whether the accused had rebutted this presumption. The appellate court emphasized that the trial court should have provided clear reasons and findings on these aspects rather than dismissing the complaint on a technicality. The appellate court concluded that the trial court's judgment lacked a proper appreciation of the oral and documentary evidence and was not legally sustainable.

Conclusion:
The appellate court allowed the criminal appeal filed by the appellant/complainant, set aside the trial court's judgment of acquittal, and remanded the matter to the trial court with instructions to hear both parties and pass an appropriate judgment, giving reasons and findings on all points for consideration except the limitation issue, which was resolved in favor of the complainant. The trial court was directed to proceed uninfluenced by any observations made by the appellate court, except regarding the limitation issue. The records of the trial court were ordered to be sent back forthwith.