2021 (12) TMI 893 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - discharge of legally enforceable liability or cheque issued as security - rebuttal of presumption u/s 118 and 139 of NI Act - HELD THAT - Section 139 of the Act provides that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, or any debt or other liability. Similarly, Section 118 of the Act provides that unless contrary is proved , that the holder of the cheque received the cheque in discharge, in whole or in part, of a debt or liability. True, it is that to rebut aforesaid presumption accused can always raise probable defence either by leading some positive evidence or by referring to the material, if any adduced on record by the complainant. But in the case at hand, accused has miserably failed to raise probable defence much less sufficient to rebut the presumption applicable in favour of the complainant under Section 118 and 139 of the Act. This Court sees no reason to interfere with the well reasoned judgments passed by the courts below, which otherwise appear to be based upon the correct appreciation of evidence and as such, same need to be upheld. Moreover, this Court has a very limited jurisdiction under Section 397 of the Cr.PC, to re-appreciate the evidence, especially, in view of the concurrent findings of fact and law recorded by the courts below. Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the courts below while passing impugned judgments, and as such, there is no occasion, whatsoever, to exercise the revisional power - this court is convinced and satisfied that complainant has successfully proved by leading cogent and convincing evidence that he advanced ₹ 1.50 Lakh to the accused, who with a view to discharge his lawful liability, issued cheque in question, but the same came to be dishonored on account of insufficient funds in his account. Since despite issuance of legal notice, accused failed to make good the payment , learned court below totality of evidence led on record by the complainant, rightly held accused guilty of having committed offence punishable under S.138 of act and as such, no interference in the impugned judgment/order of conviction and sentence is called for. Moreover, this court, after issuance of notice dated. 14.10.2019, repeatedly granted opportunity to the petitioner/accused to deposit the amount but neither he furnished personal bonds nor deposited amount. Impugned judgment/order of conviction and sentence passed by learned Courts below are upheld - Petition dismissed.

Summary

Issues Involved:
1. Legally enforceable liability under Section 138 of the Negotiable Instruments Act.
2. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
3. Accused's defense and burden of proof.
4. Examination of evidence and jurisdiction of the High Court under Section 397 of the Cr.PC.

Issue-wise Detailed Analysis:

1. Legally Enforceable Liability under Section 138 of the Negotiable Instruments Act:
The court addressed whether the cheque in question was issued towards the discharge of a legally enforceable liability or as security. The complainant alleged that the accused borrowed ?1,50,000 for house construction and issued a cheque which was dishonored due to insufficient funds. Despite a legal notice, the accused failed to make the payment, leading to the complaint under Section 138 of the Act. The trial court convicted the accused, and the Sessions Judge upheld the conviction.

2. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The court noted that the accused did not dispute the issuance of the cheque or his signatures. Under Sections 118 and 139, a presumption arises that the cheque was issued for a legally enforceable debt. The court emphasized that this presumption is rebuttable, but the accused failed to provide a probable defense to rebut it. The court cited the Supreme Court's judgment in Rohitbhai Jivanlal Patel v. State of Gujarat, which held that once the presumption arises, the onus shifts to the accused to disprove it.

3. Accused's Defense and Burden of Proof:
The accused claimed that the cheque was issued as a blank security cheque to one Smt. Amra Devi, who, in connivance with the complainant, misused it. However, he failed to substantiate this claim with evidence or witness testimony. The court found that the accused did not discharge his burden of proof to rebut the presumption under Sections 118 and 139. The court referred to the Supreme Court's judgment in M/s Laxmi Dyechem v. State of Gujarat, which stated that the accused must establish a probable defense to create doubt about the existence of a legally enforceable debt.

4. Examination of Evidence and Jurisdiction of the High Court under Section 397 of the Cr.PC:
The court reiterated that it has limited jurisdiction under Section 397 of the Cr.PC to re-appreciate evidence, especially when there are concurrent findings of fact and law by lower courts. The court cited the Supreme Court's judgment in State of Kerala v. Puttumana Illath Jathavedan Namboodiri, which held that the High Court's revisional power is supervisory and not equivalent to appellate jurisdiction. The court found no material irregularity or error in the lower courts' judgments.

Conclusion:
The court dismissed the revision petition, upholding the judgments and order of conviction and sentence passed by the lower courts. The accused was directed to surrender before the trial court to serve the sentence if not already served. The court found that the complainant successfully proved the loan of ?1,50,000 to the accused, who issued the cheque in discharge of his lawful liability, which was dishonored due to insufficient funds. The accused's failure to rebut the statutory presumption under Sections 118 and 139 led to the dismissal of his defense.