2021 (6) TMI 465 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - legally enforceable debt between the parties or not - HELD THAT - The petitioner/accused has not raised any other grounds or addressed any other augments worth to be considered. On the other hand, as observed above, the admitted cheque at Exhibit P-1, of which the accused is the drawer has been dishonoured with the banker's share of 'insufficient funds' as could be seen in the banker's memo at Ex. P-2 and the debit slip at Ex. P-3. The copy of the legal notice at Exhibit P-4 has been admittedly served upon the accused which is further evidenced in the postal receipt and postal acknowledgement card at Exhibits P-5 and P-6 respectively. The reply sent by the accused as per Exhibit D-1 proves to be untenable and could not able to shaken the evidence of the complainant, both oral and documentary and even the evidence of DW-1 also, could not, in any way, succeed in introducing any doubt in the case of the complainant. It is appreciating the evidence placed before them properly, both the Trial Court and the learned Sessions Judge's Court have rightly held the accused guilty of the alleged offence and after convicting him, have awarded proportionate sentence for the proven guilt - there are no illegality, irregularity or impropriety, warranting interference in the impugned judgments of conviction and order on sentence passed by the Trial Court and confirmed by the learned Sessions Judge's Court. Criminal Revision Petition dismissed.

Summary

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.
2. Validity of the tax invoice and its reflection in tax returns.
3. Presumption under Sections 118 and 139 of the N.I. Act.
4. Defence of the accused regarding issuance of the cheque.

Issue-wise Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881:
The petitioner, accused of purchasing gold ornaments and issuing a cheque for ?13,80,000, faced conviction under Section 138 of the N.I. Act by the Trial Court and the Sessions Judge's Court. The cheque was dishonored due to insufficient funds, and despite a legal notice, the accused did not pay the amount. The courts found the accused guilty and sentenced him to pay a fine of ?16,00,000 or undergo simple imprisonment for one year.

2. Validity of the tax invoice and its reflection in tax returns:
The accused argued that the complainant did not prove the tax invoice (Ex. P-8) and did not reflect the transaction in the Commercial Tax Department, casting doubt on the sale of gold. However, the complainant provided tax returns (Ex. P-9) showing the VAT collected, including the amount from the transaction in question. The court found the complainant's documentation credible, rejecting the accused's contention.

3. Presumption under Sections 118 and 139 of the N.I. Act:
The accused relied on judgments from the Hon'ble Apex Court, asserting that the presumption under Sections 118 and 139 is rebuttable. The burden of proof lies on the accused to show a probable defence. The complainant, supported by evidence from PW-2 (Bank Manager) and documents (Exs. P-10 to P-13), established that the accused had prior transactions with the complainant, contradicting the accused's claim of unfamiliarity.

4. Defence of the accused regarding issuance of the cheque:
The accused claimed the cheque was given as a blank signed cheque to a third party (Praveen Achar) as security, not to the complainant. However, the accused failed to provide evidence or take action against Praveen Achar for not returning the cheques. The court found the accused's defence unconvincing, noting inconsistencies in his statements and lack of immediate mention of this defence in his reply to the legal notice.

Conclusion:
The court concluded that the complainant proved beyond reasonable doubt that the accused issued the cheque towards a legally enforceable debt, which was dishonored due to insufficient funds. The accused's defence was deemed untenable. Both the Trial Court and the Sessions Judge's Court were found to have rightly convicted the accused and imposed a proportionate sentence. The Criminal Revision Petition was dismissed as devoid of merit, and the order was transmitted to the respective courts.