2022 (9) TMI 1116 - HC - Indian Laws

Dishonor of Cheque - legally enforceable - cheque received through third party - acquittal of the accused - rebuttal of presumption - section 138 and 139 of NI Act - HELD THAT - It appears from the available document, Exhibit-E that the vehicle in question was registered in the name of Tinkori Mandal on 6th August, 2003 and the vehicle was acquired on hire purchase with the financial assistance from Malda Co-operative Agricultural Bank Limited. In absence of any document establishing the nexus between A.B. Construction and Mourya Finance Company Limited, the appellant/complainant has failed to prove that A.B. Construction or Ajay Basu had any obligation to pay to appellant any money and chaque in question was given in discharge of such obligation. On the contrary, accused/respondent was successful in rebutting the presumption arising out of the provision of Section 139 of the Negotiable Instrument Act. The appellant being the complainant had failed to establish by cogent evidence that the accused/respondent issued the cheque in favour of the complainant in discharge of his liability to pay debt otherwise legally enforceable rather it is established that the cheque was received from Ajit Sinha. The impugned judgement passed by learned Trial Court does not warrant any interference - appeal against order of acquittal merits no consideration and dismissed.

Issues Involved:
1. Jurisdiction of the Trial Court post-remand.
2. Compliance with Section 138 of the Negotiable Instruments Act.
3. Rebuttal of presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act.
4. Legally enforceable debt or liability.
5. Validity of the cheque issuance and its dishonor.

Detailed Analysis:

1. Jurisdiction of the Trial Court Post-Remand:
The appellant argued that the learned Trial Court overstepped its jurisdiction by re-examining issues already settled by the Co-ordinate Bench. However, the judgment clarified that the remand was "virtually an open remand," obligating the Trial Court to decide all points necessary for adjudicating the proceeding under Section 138 of the N.I. Act. The Trial Court was directed to allow the complainant to lead further evidence to establish Subhrangshu Das's status as the sole proprietor of the appellant company. Therefore, the Trial Court did not transgress its jurisdiction.

2. Compliance with Section 138 of the Negotiable Instruments Act:
The judgment outlined the necessary ingredients to constitute an offense under Section 138:
- Cheque issuance in discharge of liability.
- Presentation of the cheque.
- Dishonor of the cheque.
- Service of notice as per Section 138.
- Non-payment despite notice.

The appellant failed to prove that the cheque was issued by the accused in discharge of a legally enforceable debt. The evidence suggested that the cheque was handed over by Ajit Sinha of Mourya Finance Company Limited, not by Ajay Basu of A.B. Construction.

3. Rebuttal of Presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act:
The judgment referenced the Supreme Court's stance in M. S. Narayan Menon vs. State of Kerala, stating that the presumptions under Sections 118(a) and 139 are rebuttable by a preponderance of probabilities, not beyond a reasonable doubt. The accused successfully rebutted the presumption by demonstrating that the cheque was issued as a security measure by Mourya Finance Company Limited and was not intended for the appellant.

4. Legally Enforceable Debt or Liability:
The appellant was unable to establish a direct financial obligation between A.B. Construction and the appellant. The evidence showed that the cheque was issued by Ajit Sinha, and there was no substantiated link between A.B. Construction and Mourya Finance Company Limited. Thus, the accused had no legally enforceable debt towards the appellant.

5. Validity of the Cheque Issuance and Its Dishonor:
The evidence indicated that the cheque was issued by Ajay Basu under the instruction of Ajit Sinha. The accused claimed that the cheque was given as security and was misused by Ajit Sinha. The Trial Court found this defense credible, and the appellant failed to provide contrary evidence.

Conclusion:
The High Court upheld the Trial Court's acquittal, noting that the appellant failed to prove the essential ingredients of Section 138 of the N.I. Act. The accused successfully rebutted the presumptions under Sections 118(a) and 139, demonstrating no legally enforceable debt existed. Consequently, the appeal against the order of acquittal was dismissed without costs.

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