2022 (11) TMI 397 - HC - Indian Laws

Dishonor of Cheque - Application of Money Lending Act - discharge of legally enforceable debt or not - rebuttal of statutory presumption - preponderance of probabilities - privity of contact - section 138 and 139 of NI Act - HELD THAT - The complaint was taken up for trial and ended in conviction holding the petitioner guilty of the offence under Section 138 of the Negotiable Instruments Act, 1881. The trial Court sentenced the petitioner to undergo SI for one year and also directed to pay compensation of Rs.25,00,000/- being the cheque amount. The compensation was directed to be paid within a period of three months, from the date of the judgment in default, to undergo SI for a period of three months. The complainant in the cross examination though admits that he is engaged in money lending business and he is not a registered money lender, as far as this transaction is concerned, even in his statutory notice, the complainant has categorically stated that the petitioner herein being a long time friend has lend money for free of interest. That being the case, when the transaction is not for interest, the Money Lending Act have no application. The standard of proof to rebut the presumption under Section 118 and Section 139 of the Negotiable Instruments Act, 1881 though not as high as required for the prosecution to prove and even preponderance of probability is sufficient for rebuttal. The accused cannot take inconsistent stand to claim that he has probabilise his defence. Inconsistent plea as a rebuttal evidence will improbabilise the rebuttal - In the instant case, the petitioner/accused had informed the bank that the subject cheque got lost he has intimated the police that the subject cheque was taken away by force by the complainant/respondent. But in the course of the trial, he has suggested to the witness that this cheque was given in respect of the liability of one Govindarajan. However, the issuance of the cheque and money transaction with the respondent/complainant has not been denied. The foundational fact of the drawing cheque and the privity has been proved by the complainant. No material placed by the accused to discharge the burden. This Court finds no error in the finding of the trial Court - this criminal Revision Case is dismissed.

Summary

Issues Involved:

1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Failure to prove the foundational fact of the debt.
3. Complainant's status as an unregistered money lender.
4. Allegation of cheque being forcibly taken.
5. Sentence imposed being excessive.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act:

The petitioner was convicted for an offence under Section 138 of the Negotiable Instruments Act and sentenced to one year of simple imprisonment (SI) and directed to pay Rs.25,00,000/- as compensation to the complainant within three months, failing which an additional three months of SI would be imposed. The trial court's judgment was upheld by the appellate court, leading to the current revision.

2. Failure to Prove the Foundational Fact of the Debt:

The petitioner contended that the complainant failed to produce any documents proving the alleged money transaction to enforce a debt. The complainant only presented the cheque (Ex.P1) without any supporting documents. The complainant admitted to being involved in money lending without being registered under the Tamil Nadu Money Lenders Act, 1957, and failed to produce business records to substantiate the transaction.

3. Complainant's Status as an Unregistered Money Lender:

The complainant admitted to lending money without being registered as a money lender. However, it was argued that the transaction in question was not for interest and was a friendly loan, thus not falling under the purview of the Money Lenders Act. The court found that the Money Lending Act did not apply as the transaction was interest-free.

4. Allegation of Cheque Being Forcibly Taken:

The petitioner claimed that the cheque was forcibly taken with the help of goondas and lodged a complaint with the police. However, the petitioner also instructed the bank to stop payment, stating the cheque was lost. The inconsistency in the petitioner's defense was noted, as the police complaint was closed as a "mistake of fact." The court found that the petitioner's claim of the cheque being forcibly taken was not credible.

5. Sentence Imposed Being Excessive:

The petitioner argued that the sentence was excessive, citing the Supreme Court judgment in Mangilal v. State of M.P. The court noted that under the Negotiable Instruments Act, the sentence could extend to two years and compensation up to twice the cheque amount. The imposed sentence of one year and compensation equal to the cheque amount was deemed reasonable.

Conclusion:

The court dismissed the revision petition, finding no error in the trial court's judgment. The foundational fact of the debt was proven by the complainant, and the petitioner's inconsistent defenses failed to rebut the presumption under Sections 118 and 139 of the Negotiable Instruments Act. The sentence imposed was found to be appropriate and within the statutory limits. Consequently, the connected miscellaneous petitions were also closed.