2022 (4) TMI 984 - HC - Indian Laws

Dishonor of Cheque - rebuttal of evidence - source of income/capacity to lend - stand of petitioner is that the respondent had no source of income to lend such a huge sum of ₹ 8,00,000/- to the petitioner - HELD THAT - Honourable Supreme Court of India in TEDHI SINGH VERSUS NARAYAN DASS MAHANT 2022 (3) TMI 797 - SUPREME COURT held that in the case under Section 138 of the Negotiable Instruments Act, the complainant need not show the first instance that he had capacity to lend the loan. The proceedings under Section 138 of the Negotiable Instruments Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent, the Courts were right in held on those lines. The accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent material namely by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross-examination of the witnesses of the complainant. Ultimately it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then, come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. The petitioner can very well examine his side witnesses to disprove the case of the respondent herein - Criminal Revision Case is allowed.

Summary

Issues:
1. Petitioner's right to issue witness summons under Section 243 of Cr.P.C.
2. Rebutting the evidence of the respondent by examining witnesses.
3. Interpretation of the law under Section 138 of the Negotiable Instruments Act.
4. Applicability of recent Supreme Court judgments in similar cases.

Analysis:

Issue 1: Petitioner's right to issue witness summons under Section 243 of Cr.P.C.
The petitioner, an accused in a case under Section 138 of the Negotiable Instruments Act, filed a revision to set aside the order dismissing the petition to issue witness summons to specific individuals. The trial court had directed the petitioner to file a petition to summon witnesses after the completion of the complainant's evidence. The witnesses listed were crucial to the petitioner's defense, including an auditor and individuals related to the complainant's financial status.

Issue 2: Rebutting the evidence of the respondent by examining witnesses
The petitioner argued that he had a right to lead his defense evidence by examining witnesses to disprove the case of the respondent. The petitioner claimed that the respondent had no source of income to lend the alleged amount and that certain witnesses were essential to establish this fact. The petitioner aimed to demonstrate through witnesses and documents that the respondent's claims were unfounded.

Issue 3: Interpretation of the law under Section 138 of the Negotiable Instruments Act
The High Court examined the provisions of the Negotiable Instruments Act, particularly Section 138, which governs cases of dishonored cheques. It was established that the accused could rebut the complainant's evidence by cross-examination, presenting witnesses, and producing materials to disprove the complainant's case. The court emphasized the accused's right to demonstrate that the complainant lacked the financial capacity to lend the disputed amount.

Issue 4: Applicability of recent Supreme Court judgments in similar cases
The High Court referenced a recent Supreme Court judgment in Crl.A.No.362 of 2022, emphasizing the accused's right to establish a probable defense by producing independent material, examining witnesses, and cross-examining the complainant's witnesses. The court highlighted that the accused could challenge the complainant's capacity to lend the amount without the complainant having to prove financial capacity initially.

In conclusion, the High Court allowed the Criminal Revision Case, setting aside the trial court's order and granting the petitioner the right to examine witnesses to disprove the respondent's case. The judgment underscored the accused's entitlement to present a defense by producing evidence and witnesses to challenge the complainant's claims under the Negotiable Instruments Act.