2021 (12) TMI 274 - HC - Indian Laws

Dishonor of Cheque - existence of legal debt/liability or not - guilty of offence under Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT - There cannot be any quarrel with the proposition that the jurisdiction being exercised by this Court in revision necessarily limits the scope to interfere in concurrent findings rendered by the two Courts below against the applicants. Nonetheless, if the applicants are able to demonstrate that the findings rendered by the two Courts below are erroneous, perverse and wholly unsustainable, the impugned judgments and orders can certainly be interfered with. A perusal of the nature of cross examination of the witnesses of the respondent and the manner in which defence evidence was led by examining witnesses, it becomes clear that the material brought on record fell way short of rebutting the presumption that operated against the applicants. The elaborate submissions sought to be made before this Court on behalf the applicants on the aspect of the alleged failure of the respondent to give details of the account and crystalized form of legal debt or liability is not supported by the material available on record - In fact, with the nature of stand taken before the Magistrate and the manner in which oral and documentary evidence was led on behalf of the applicants, it becomes clear that there is no scope for the applicants to raise such a contention in revisional jurisdiction before this Court. This Court finds that no case for interference is made out on behalf of the applicants in revisional jurisdiction - the revision application is found to be without any merits and it is dismissed.

Summary

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Territorial Jurisdiction.
3. Opportunity to present oral arguments.
4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
5. Legal debt or liability.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The original accused challenged the concurrent findings of guilt under Section 138 of the Negotiable Instruments Act, 1881, for dishonouring two cheques amounting to ?2,00,000 and ?7,00,000. The Judicial Magistrate, First Class, sentenced the partners of the appellant firm to three months of simple imprisonment and directed them to pay ?11,16,000 under Section 357(3) of the Cr.P.C. This judgment was confirmed by the Sessions Court.

2. Territorial Jurisdiction:
The applicants contended that the Magistrate at Bicholim lacked territorial jurisdiction, arguing that the complaint was filed to harass them. However, the Sessions Court found no merit in this argument, noting that the objection was not raised before the Magistrate. The High Court upheld this view, referencing the judgment in Dashrath Rupsingh Rathod Vs. State of Maharashtra, which clarified that existing complaints and proceedings were unaffected by changes in territorial jurisdiction law.

3. Opportunity to Present Oral Arguments:
The applicants argued that they were not given the opportunity to present oral arguments before the Sessions Court. However, the High Court found that the roznama and the judgment indicated that the applicants' counsel was indeed heard. The affidavit disputing this was not considered sufficient to challenge the Sessions Court's findings.

4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The Magistrate found that the presumption under Sections 118 and 139 was not rebutted by the applicants. The applicants failed to provide evidence to support their claims of forced issuance of cheques and forgery of signatures. The High Court agreed, noting that the applicants did not meet the preponderance of probabilities required to rebut the presumption.

5. Legal Debt or Liability:
The applicants argued that there was no material to ascertain the exact nature of the legal debt or liability related to the cheques. They claimed to have supplied 3000 metric tonnes of iron ore, while the respondent acknowledged only 1500 metric tonnes of low-grade iron ore. The High Court found that the applicants failed to prove the supply of the second installment of 1500 metric tonnes. The Court noted that the applicants did not invoke the arbitration clause or initiate civil proceedings regarding the quality dispute. The defense of forced issuance of cheques was unsupported by evidence.

Conclusion:
The High Court found no reason to interfere with the concurrent findings of the lower courts. The applicants' arguments regarding territorial jurisdiction, opportunity to present oral arguments, and the nature of legal debt or liability were rejected. The revision application was dismissed, upholding the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881.