2021 (11) TMI 544 - HC - Indian Laws

Dishonor of Cheque - amount to be repaid under the hire purchase agreement - prosecution under Section 138 of the Negotiable Instruments Act - rebuttal of statutory presumption - HELD THAT - Though the accused had filed an application for sending Ext.P2 cheque to the forensic expert for verifying the signature and handwriting and though that application was allowed by the court, the forensic laboratory had returned the same without comparison and demanding more documents written by the 2nd respondent/ accused during the same period in order to complete the investigation. However, the 2nd respondent/accused did not produce any further document, as a result of which Ext.P2 cheque was not subjected to any forensic examination - The trial court also found that the 2nd respondent/ accused had no case that the appellant/complainant had obtained the cheque from him by unlawful means and had fabricated his signature and handwritting and that no reply was sent by the 2nd respondent/accused to the statutory notice issued by the appellant/complainant. The trial court, therefore, was of the view that the appellant/complainant was entitled to the benefit of the statutory presumption under Section 139 of the Negotiable Instruments Act and therefore found that Ext.P2 cheque had been issued for discharge of a legally enforceable debt and answered that issue in favour of the appellant/complainant - A reading of the appellate court judgment shows that the appellate court was of the opinion that the signature on the cheque had not been proved to be that of the 2nd respondent/accused herein. In particular, the appellate court noticed that the signatures on Ext.D1, the account opening form and Ext.X1 containing the registration particulars of the vehicle were different from the signature contained in Ext.P2 cheque. This is a case where the 2nd respondent/accused has not denied the fact that he had entered into a hire purchase agreement with the appellant/complainant. He had also not denied the fact that he had failed to repay the instalments of the loan in time - The trial court on an examination of the signatures on various documents concluded that there was a similarity in the admitted signature and the signature contained in the cheque. Of course, the appellate court has by invoking Section 73 of the Evidence Act come to a different conclusion regarding the similarity in the signatures. In the facts of the present case, the transaction between the appellant/complainant and the 2nd respondent/accused has not been disputed. The appellate court also found that there was similarity in the signature on the cheque, the hire purchase agreement and in the registration details maintained with the Motor Vehicles Department. That finding by itself is to establish that the statutory presumption under the Negotiable Instruments Act was available to the appellant/complainant. Therefore, the appellate court went wrong in reversing the conviction and sentence imposed on the 2nd respondent/accused. This appeal is allowed.

Summary

Issues:
Challenge to conviction and sentence under Section 138 of the Negotiable Instruments Act based on discrepancies in signatures on the cheque and other documents.

Analysis:
The appellant filed an appeal challenging the judgment that reversed the conviction and sentence of the 2nd respondent/accused under Section 138 of the Negotiable Instruments Act. The trial court found the accused guilty based on evidence that he had defaulted on a hire purchase loan and issued a cheque for repayment. The trial court considered the hire purchase agreement, repayment history, and lack of response to statutory notices in reaching its decision. Despite the accused's request for forensic examination of the cheque, no further documents were provided, leading to inconclusive results. The trial court applied the statutory presumption under Section 139 of the Act, concluding the cheque was issued for a legally enforceable debt.

The appellate court, however, overturned the conviction, questioning the proof of the accused's signature on the cheque. By invoking Section 73 of the Evidence Act, the appellate court found discrepancies in signatures across various documents, leading to doubts about the authenticity of the cheque's signature. The appellate court emphasized the lack of conclusive evidence linking the accused to the cheque's signature, ultimately leading to the reversal of the conviction.

In analyzing the case, the court noted the undisputed hire purchase agreement and repayment default by the accused. Despite differing conclusions on signature similarities, both courts acknowledged some consistency in signatures across critical documents. The court referenced a prior judgment to highlight the importance of proving signature authenticity and the impact on establishing liability under Section 138 of the Act. The court ultimately reinstated the conviction but reduced the sentence considering the accused's occupation and ordered compensation equivalent to the cheque amount if not paid.

The judgment underscores the significance of establishing signature authenticity in cases under Section 138 of the Negotiable Instruments Act. The differing conclusions on signature similarities and the burden of proof in establishing liability were crucial aspects considered by the courts. The court's reliance on statutory presumptions, forensic examination requests, and prior case law highlights the complexities involved in determining liability in cases of dishonored cheques.