2021 (2) TMI 960 - HC - Indian Laws

Dishonor of Cheque - allegation is that having issued the Cheque towards discharge of his debt due to him, the petitioner has issued stop payment instructions to the banker to defraud him - Section 138 of the Negotiable Instruments Act - HELD THAT - The respondent in his cross examination stated that apart from 3 acres of horticultural land and wet land, he owns 8 acres of dry land and he cultivates pineapple, ginger and groundnuts. The fact that of respondent owning the horticultural and agricultural lands and cultivation of the same was not disputed in his cross examination - Taking into consideration the aforesaid aspects, the contentions of the petitioner regarding the lending capacity of the respondent is untenable. Therefore, this Court does not find any perversity in the finding of the Courts below about lending capacity of the respondent. Reg. issuance of cheque and liability - HELD THAT - The cheque was not dishonoured for any variations in the signature. DW.1 in his cross examination did not assert that the signature on Ex.P1 was forged one. He only said he cannot say if that is forged one or genuine one. If at all there was any doubt about his signature, the best option was to seek reference of Ex.P1 to the opinion of the hand writing expert which he did not resort to for the reasons best known to him - Once it was held that the cheque pertains to the account of the petitioner and that was issued by him, the presumptions under Section 118 of NI Act to the effect that cheque was issued for consideration and the presumption under Section 139 of the NI Act that the cheque was issued for discharge of liability arise. The petitioner failed to rebut the said presumption by adducing cogent, consistent and acceptable evidence. Therefore, the Courts below were justified in holding that the cheque Ex.P1 was issued by petitioner towards discharge of his liability. Acceptance of affidavit evidence of the petitioner - HELD THAT - The original proceedings were of the year 2002. The petitioner having submitted his evidence by way of affidavit voluntarily, now in this revision petition, for the first time after more than a decade is trying to claim that in accepting his affidavit, the trial Court has committed jurisdictional error. The said contention runs contrary to the judgment of the Supreme Court in Srinath's case referred supra. For the aforesaid reasons this Court does not find any illegality, impropriety and incorrectness in the order of conviction. Sentence - HELD THAT - The trial Court has sentenced the petitioner to imprisonment of one year but has not imposed any fine. The cheque amount was ₹ 4 lakhs. The compensation awarded is ₹ 4 lakhs. The offence under Section 138 of NI Act is punishable with imprisonment upto 2 years or with fine extending to twice the amount of the cheque or both. The respondent has fought this litigation for about 18 years. In adjudication of this matter the state resources are also diverted. Therefore, non imposition of any fine was not just and appropriate - Having regard to the age of the petitioner the sentence of imprisonment can be modified to sentence of fine with default sentence. Therefore, the petition is partly allowed. The impugned order of conviction for the offence under Section 138 of NI Act is hereby confirmed - The order of sentence is modified as follows The petitioner is sentenced to fine of ₹ 8 lakhs. In default to pay fine, the petitioner shall undergo simple imprisonment of 30 days. Out of the fine amount sum of ₹ 7,90,000/- shall be paid to the respondent as compensation and ₹ 10,000/- shall be remitted to the State - Petition allowed in part.

Summary

Issues Involved:

1. Lending capacity of the respondent.
2. Issuance of the cheque and liability.
3. Acceptance of affidavit evidence by the petitioner.
4. Sentence imposed on the petitioner.

Issue-wise Detailed Analysis:

1. Lending Capacity of the Respondent:

The petitioner contested that the respondent did not prove his lending capacity to draw the presumption under Sections 118 and 139 of the Negotiable Instruments Act. However, the court noted that the petitioner did not dispute the respondent's lending capacity at the earliest point of time or during the trial. The respondent testified about owning significant agricultural land, which was not contested during cross-examination. Therefore, the court found no perversity in the lower courts' findings regarding the respondent's lending capacity.

2. Issuance of the Cheque and Liability:

The petitioner did not dispute that the cheque (Ex.P1) belonged to his account. The respondent claimed the cheque was issued to discharge a debt. Initially, the petitioner contended that the documents were concocted but did not specifically assert that the signature on the cheque was forged. Later, the petitioner claimed that his uncle's son, Nagapathi Narayana Hegde, stole the cheque book and facilitated the respondent to file a complaint. However, this defense was not mentioned in the reply notice (Ex.P6) nor substantiated by any evidence of prosecution against Nagapathi Narayana Hegde. The court noted that the petitioner did not seek a handwriting expert's opinion to verify the signature. Consequently, the court upheld the presumption under Sections 118 and 139 of the NI Act that the cheque was issued for consideration and towards the discharge of liability, which the petitioner failed to rebut.

3. Acceptance of Affidavit Evidence by the Petitioner:

The petitioner argued that the trial court erred in accepting his evidence by affidavit, contrary to Section 145 of the NI Act and Section 315 of Cr.P.C. However, the petitioner voluntarily submitted his affidavit without objection. The court referenced the Supreme Court's guidelines in the Indian Bank Association case, which allows the court to accept affidavits of witnesses, including the accused, for cross-examination. The court found no jurisdictional error in the trial court's acceptance of the petitioner's affidavit and cited the Supreme Court's principle that procedural laws should aid justice rather than frustrate it.

4. Sentence Imposed on the Petitioner:

The petitioner, aged 64, sought modification of the one-year imprisonment sentence. The trial court had not imposed any fine but awarded compensation of ?4,00,000 to the respondent. Considering the prolonged litigation and the diversion of state resources, the court found the non-imposition of a fine inappropriate. The court modified the sentence to a fine of ?8,00,000, with a default sentence of 30 days of simple imprisonment. Out of the fine amount, ?7,90,000 was to be paid to the respondent as compensation, and ?10,000 was to be remitted to the state.

Conclusion:

The court confirmed the conviction for the offence under Section 138 of the NI Act but modified the sentence from imprisonment to a fine, considering the petitioner's age and the circumstances of the case. The revised sentence included a fine of ?8,00,000, with a default sentence of 30 days of simple imprisonment, and appropriate compensation to the respondent.