2021 (12) TMI 1230 - HC - Indian Laws

Dishonor of Cheque - acquittal of accused from the charge under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881 - HELD THAT - The Appellate Court shall be slow in interfering with the order of acquittal passed by the trial Court. If the evaluation of the evidence and the findings recorded by the trial Court do not suffer from any illegality or perversity and the grounds on which the trial Court has based its conclusion are reasonable and possible. The High Court should not disturb the order of acquittal if another view is possible merely because an Appellate Court on re-appreciation and re-evaluation of the evidence is inclined to take a different view, interference with the judgment of acquittal is not justified if the view taken by the trial Court is a possible view. However, the High Court in an appeal under Section 378 has full power to review at large the evidence on which the order of acquittal was founded and to reach the conclusion that upon the evidence on record, the order of acquittal should be reversed when the trial Court fails to appreciate the evidence on record lawfully in its true perspective or the order of acquittal suffers from patent legality and mala fide, the High Court has every authority to reverse the judgment of acquittal. In the instant appeal, it is found on proper appreciation of evidence that the learned Magistrate erred in appreciating the evidence on record. She also fails to ascertain the fact of the complainant's case and illegally held that the complainant failed to prove that the cheque in question was issued by D.W.1 in discharge of a legally enforceable debt. She also failed to consider the law of presumption enunciated in Section 139 of the Negotiable Instruments Act in its true perspective. Appeal allowed - decided in favor of appellant.

Issues Involved:
1. Whether the cheque was issued in discharge of a legally enforceable debt or liability.
2. Whether the complainant-Company stood as a guarantor for the loan taken by the respondent no. 1-Company.
3. Whether the trial court's judgment of acquittal was justified based on the evidence presented.

Detailed Analysis:

Issue 1: Whether the cheque was issued in discharge of a legally enforceable debt or liability.
The appellant-Company alleged that it accommodated a loan of ?50,00,000/- by way of a fixed deposit as collateral for the respondent no. 1-Company. The respondent no. 1-Company issued a cheque for ?50,00,000/- in favor of the appellant-Company, which was dishonored due to insufficient funds. The appellant-Company sent a demand notice, but the respondents failed to pay the amount, leading to the filing of the complaint.

The defense argued that there was no debt or liability to the appellant-Company and that the cheque was given as a blank signed cheque in good faith, which was misused by the appellant-Company.

The High Court relied on the Supreme Court's decision in Bir Singh vs. Mukesh Kumar, which held that the presumption under Section 139 of the Negotiable Instruments Act includes the existence of a legally enforceable debt or liability. The burden to rebut this presumption lies on the accused. The High Court found that the respondents failed to discharge this burden, and the cheque was indeed issued in discharge of the debt.

Issue 2: Whether the complainant-Company stood as a guarantor for the loan taken by the respondent no. 1-Company.
The trial court questioned why the complainant-Company would stand as a guarantor for the respondent no. 1-Company without any business relationship. The trial court found no document proving that the complainant-Company had provided ?50,00,000/- to the respondent no. 1-Company or that Dena Bank had issued such a loan.

However, the High Court noted that P.W.2, the Chief Manager of Dena Bank, testified that the fixed deposit in the name of the appellant-Company was used as collateral for the loan to the respondent no. 1-Company. The fixed deposit was appropriated by the bank to liquidate the loan when the respondent no. 1-Company failed to repay. This created a legally enforceable debt or liability against the respondent no. 1-Company.

Issue 3: Whether the trial court's judgment of acquittal was justified based on the evidence presented.
The trial court acquitted the respondents, stating that the complainant-Company failed to prove the issuance of the cheque in discharge of any debt or liability. The trial court did not consider the presumption under Section 139 of the Negotiable Instruments Act correctly.

The High Court found that the trial court erred in its appreciation of the evidence and the legal presumption. The High Court emphasized that the presumption under Section 139 includes the existence of a legally enforceable debt or liability, and the respondents failed to rebut this presumption.

Conclusion:
The High Court set aside the trial court's judgment of acquittal, convicting the respondents under Section 138 read with Section 141 of the Negotiable Instruments Act. The case was remanded to the trial court for a hearing on the point of sentence, directing the trial court to pass an order of sentence against the respondents. The appeal was allowed, and the judgment was to be sent to the lower court for compliance.

← Previous Next →