2021 (9) TMI 775 - HC - Indian Laws

Dishonor of Cheque - discharge of enforceable debt or not - rebuttal of presumption or not - only point involved in this case is that the cheque itself was not issued in discharge of any liability and accordingly, one of the basic ingredients of the offence under Section 138 of the Negotiable Instruments Act was not at all satisfied - HELD THAT - The Complainant's son was trying to change his transporting business after selling his trucks and about this, the petitioner had knowledge and so the petitioner came in contact with the Complainant side and offered his son to participate in a new business and after being convinced, the Complainant spent a huge amount in the business of the petitioner by his selling trucks, but on asking to repay the benefits of the share, the petitioner issued a post dated cheque bearing no. 831577 dated 15.08.2006 for a sum of ₹ 24,344/- in favour of the Complainant. On presentation of the cheque on 7.09.2006, 19.09.2006 and also on 18.10.2006 with the consent of the petitioner, the same was dishonoured due to being not arranged for. The further case of the Complainant was that the petitioner was informed in respect of the payment of the bounced cheque amount, but he did not pay the same. The Complainant sent a legal notice to the petitioner on 31.10.2006 by registered post and also by courier service, but the petitioner did not pay the said amount and ultimately, the Complaint case was filed. This Court finds that C.W.-2 is the Complainant who has stated that the petitioner had issued Cheque No.831577 dated 15.08.2006 for a sum of ₹ 24,344/- in his favour and he identified the writing and signature of the petitioner which was marked as Exhibit-1. On presentation, the cheque was not encashed and it was dishonoured. He identified the bank return memos which were marked as Exhibits- 2, 2/1 and 2/2 respectively - This Court finds that all the witnesses examined on behalf of the Complainant have clearly stated about the dishonour of the cheque, the return memo, legal notice, etc. Any debt or liability could not be disproved by the defence. In this case, the learned trial court found that the said cheque was issued by the petitioner in favour of the Complainant for discharging his debt, but the same was returned by the bank unpaid because of insufficient fund which falls under the purview of the Section 138 of the Negotiable Instruments Act. This Court finds that the learned appellate court also recorded that all the basic ingredients for offence under Section 138 of the Negotiable Instruments Act were satisfied and accordingly conviction of the petitioner was upheld. This Court finds that both the learned courts below have appreciated the evidences on record and have rightly considered the provision under Section 139 of the Negotiable Instruments Act while upholding conviction of the petitioner under Section 138 of the Negotiable Instruments Act. This Court also finds that all the basic ingredients for filing the Complaint case for offence under Section 138 of the Negotiable Instruments Act were duly satisfied. There is no illegality or perversity in the impugned judgments of conviction and order of sentence of the petitioner. Petition dismissed.

Summary

Issues:
1. Appeal against conviction and sentence under Section 138 of the Negotiable Instruments Act.
2. Dispute regarding the issuance of the cheque in discharge of liability.
3. Examination of witnesses and evidence presented during trial.
4. Application of Section 139 of the Negotiable Instruments Act and presumption in favor of the holder.
5. Upholding of conviction by lower courts and dismissal of criminal appeal.

Analysis:
1. The petitioner filed a criminal revision application against the judgment of conviction and sentence passed by the lower courts under Section 138 of the Negotiable Instruments Act. The appeal was made on the grounds that the cheque was issued as a guarantee and not in discharge of any debt, thereby challenging the basic ingredient of the offense.

2. The Opposite Party contended that the issuance of the cheque against a legally payable debt creates a presumption under Section 139 of the Act, which was not rebutted by the petitioner. The lower courts found that the cheque was issued by the petitioner to discharge his debt, and the dishonor due to insufficient funds fell under the purview of the Act.

3. During the trial, witnesses including the Complainant, his son, and other acquaintances testified regarding the issuance of the cheque, its dishonor, legal notices sent, and other related events. The courts found the evidence presented by the prosecution to be consistent and credible, supporting the case of the Complainant.

4. The courts below correctly applied Section 139 of the Negotiable Instruments Act, which presumes that a cheque is received for discharge of debt unless proven otherwise. The lower courts upheld the conviction based on the fulfillment of all basic ingredients required for the offense under Section 138, including the presumption in favor of the holder of the cheque.

5. The High Court, after reviewing the impugned judgments and evidence on record, affirmed the conviction of the petitioner under Section 138 of the Act. It was concluded that there was no illegality or perversity in the lower court's decisions, and the appeal lacked merit, leading to its dismissal. The interim order was vacated, the bail bond canceled, and pending applications dismissed, with instructions to send the lower court records back.

This detailed analysis highlights the legal proceedings, arguments presented, examination of witnesses, application of relevant legal provisions, and the final decision of the High Court in dismissing the appeal against conviction and sentence under the Negotiable Instruments Act.