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2022 (4) TMI 79 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - discharge of debt and liability or not - rebuttal of presumption - money not returned even after receipt of notice of complainant - Whether on 08.06.2015 while the cheque was presented to the Triprua Gramin Bank, Udaipur it was dishounoured by the bank due to insufficient fund in the account of the accused? - HELD THAT - As per Section 146 of NI Act the Court shall, in respect of every proceeding under Chapter XVII, i.e., in respect of proceeding under Section 138 of NI Act as this case, on production of banks slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonor of such cheque, unless and until such fact is disproved. In this case, Ext.3 the bank slip there are Bank officials signature and mark denoting the cheque in question was dishonoured due to insufficient of fund in the account of accused and accused failed to adduce any evidence to disprove such presumption. The accused also failed to bring any material during cross-examination to disprove the said presumption - the trial court found that the complainant is able to prove the fact that the cheque vide no.445340, dated 08.06.2014 was dishonoured due to insufficient fund in the account of accused and also due to drawers signature differs - decided in affirmative and in favour of the complainant. Whether the accused even after receipt of the notice of the complainant, did not return the money and did not make arrangement of sufficient fund in his account to make the transaction good and to honour the cheque? - HELD THAT - The trial court has observed that evidence of PW 1 corroborated by Ext.4, the demand notice dated 12.06.2015 Ext.5 the postal receipt dated 13.06.2015 and Ext, the AD card, From Ext. 4 the trial court found that the complaint issued demand notice to accused on 12.06.2015. From Ext5, the trial court found that the complainant through his advocate sent demand notice to accused by registered post with AD. From Ext.6 the trial court found accused received demand notice issued by complainant through his advocate - In cross-examination, the defence failed to discard the mentioned evidence. No suggestion is given in cross-examination by defence that accused did not receive any demand notice. No plea is taken and no suggestion is given as to the fact that accused paid money to complainant after receipt of demand notice. Therefore, considering all this aspect, it can be said that the accused even after receipt of the notice of the complaint, did not return the money and did not make arrangement of sufficient fund in his account to make the transaction good and to honour the cheque - issue decided in favor of complainant. Whether the accused Sri Dipankar Majumder on 08.06.2015 issued the cheque No.445340 in for ₹ 3,00,000/- in favour of complainant in discharge of his debt and liability? - HELD THAT - The trial court found that the complainant Shri Apu Ranjan Debnath has been able to prove the fact the accused Sri Dipankar Majumder issued the questioned cheque in favour of complainant for an amount of ₹ 3,00,000/- to indemnify his debts and liability - issue decided in affirmative and in favour of complainant but against the accused. Thus, this court is of the view that the basic ingredients which are required for transaction is not disputed. It has been well established fact that there was good acquaintance between the petitioner and the respondent No.1 prior to the transaction took place. Neither there is any dispute relating to the issuing of demand notice by the petitioner to the respondent No.1 - the instant criminal revision liable to be allowed. Revision allowed.
Issues Involved:
1. Whether the accused issued the cheque in discharge of his debt and liability. 2. Whether the cheque was dishonoured due to insufficient funds. 3. Whether the accused failed to pay the amount after receiving the demand notice. Issue-wise Detailed Analysis: 1. Issuance of Cheque in Discharge of Debt and Liability: The trial court found that the accused issued a cheque for ?3,00,000 to the complainant to discharge his debt and liability. The court relied on the Supreme Court's decision in *M/S LAXMI DYECHEM vs. STATE OF GUJARAT & ORS*, which held that dishonour of a cheque due to mismatched signatures or other reasons falls under Section 138 of the NI Act. The complainant successfully proved that the cheque was issued to indemnify the accused’s debts, leading to the trial court deciding this point in favor of the complainant. 2. Dishonour of Cheque Due to Insufficient Funds: The trial court observed that the bank return memo (Ext.3) bore the official mark and signature denoting dishonour due to insufficient funds in the accused's account. Under Section 146 of the NI Act, this presumption of dishonour stands unless disproved. The accused failed to present any evidence to rebut this presumption. Consequently, the trial court affirmed that the cheque was dishonoured due to insufficient funds and decided this point in favor of the complainant. 3. Failure to Pay After Receiving Demand Notice: The trial court noted that the complainant issued a demand notice on 12.06.2015, which the accused received on 13.06.2015. The accused neither returned the money nor arranged sufficient funds to honor the cheque. During cross-examination, the defense did not challenge the receipt of the demand notice or suggest that the accused paid the money after receiving it. Thus, the trial court concluded that the accused failed to pay the amount after receiving the demand notice and decided this point in favor of the complainant. Lower Appellate Court’s Observations: The lower appellate court overturned the trial court's decision, stating that the complainant failed to prove the existence of a legally enforceable debt. It emphasized that the presumption under Section 139 of the NI Act requires a factual basis, which the complainant failed to establish. The court highlighted that the complainant did not provide essential details like the date of payment, existence of an agreement, or source of funds. The appellate court found these omissions sufficient to rebut the presumption of debt and acquitted the accused. High Court’s Final Judgment: The High Court reviewed the arguments and evidence, noting that the basic transaction facts were undisputed. The court referenced several precedents, including *Rangappa vs. Sri Mohan*, which held that the presumption under Section 139 is rebuttable and the accused must provide a probable defense. The High Court found that the lower appellate court erred in its judgment by not considering the statutory presumption under Section 139 adequately. Consequently, the High Court set aside the lower appellate court’s decision, reinstated the trial court’s conviction, and sentenced the accused to pay a fine of ?3,00,000 or face simple imprisonment for one year. Conclusion: The High Court allowed the criminal revision, setting aside the lower appellate court’s acquittal, and upheld the trial court’s conviction under Section 138 of the NI Act. The accused was sentenced to pay a fine of ?3,00,000 in default of which he would undergo simple imprisonment for one year.
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