2023 (4) TMI 1 - HC - Indian Laws

Dishonour of Cheque - legally enforceable debt or not - rebuttal of presumption - HELD THAT - This Court is not persuaded to agree with learned counsel for the petitioner that courts below have not appreciated the evidence in its right perspective, rather same being based upon the proper appreciation of facts as well as law, calls for no interference. In the case at hand, there is no denial, if any, by the petitioner-accused with regard to issuance of cheque in question as well as his signature thereupon, rather an attempt has been made by the accused to carve out a case that cheque in question was issued as security while taking shuttering from the complainant. Complainant in his statement recorded under Section 313 Cr.PC though denied the liability, if any, of him to pay the amount, but stated that entire rent qua the shuttering taken by him was paid, but yet complainant failed to return the cheque procured by him as security at the time of hiring of shuttering. Since there is no dispute, if any, with regard to issuance of cheque as well as signature thereupon of petitioner, presumption as available under Sections 118 and 139 of the Act comes into play, which clearly provides that there is presumption available in favour of the holder of the cheque that same was issued in discharge of the lawful liability. No doubt, aforesaid presumption is rebuttable, but for that purpose, accused is/was under obligation to raise probable defence. The Hon ble Apex Court in M/s Laxmi Dyechem V. State of Gujarat, 2012 (12) TMI 106 - SUPREME COURT , has categorically held that if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. To raise probable defence, accused can rely on the materials submitted by the complainant. Needless to say, if the accused/drawer of the cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, statutory presumption under Section 139 of the Negotiable Instruments Act, regarding commission of the offence comes into play. If the entire evidence led on record by the complainant is read in its entirety, no illegality and infirmity can be said to have been committed by the courts below while holding the petitioner-accused guilty of having committed offence punishable under Section 138 of the Act. In the case at hand, complainant successfully proved all the ingredients of Section 138 of the Act. He successfully proved on record that before instituting proceedings under Section 138 of the Act, he had served legal notice upon the accused, thereby calling upon him to make the payment good. Nor he replied to the legal notice, nor paid the money - Since factum with regard to advancement of loan to the tune of Rs. 1.00 lac stands established on record and same was never repaid, cheque issued as security, if any, could be well presented by the complainant before the bank concerned for encashment. By now it is well settled that dishonour of cheque issued as security can also attract offence under Section 138 of the Negotiable Instruments Act. Hon ble Apex Court in case titled Sripati Singh v. State of Jharkhand 2021 (11) TMI 66 - SUPREME COURT . Since after having carefully examined the evidence in the present case, this Court is unable to find any error of law as well as fact, if any, committed by the courts below while passing impugned judgments, there is no occasion, whatsoever, to exercise the revisional power - this Court sees no valid reason to interfere with the well reasoned judgments recorded by the courts below, which otherwise, appear to be based upon proper appreciation of evidence available on record and as such, same are upheld. The present criminal revision petition is dismissed being devoid of any merit.

Summary

Issues Involved:

1. Legality of the conviction under Section 138 of the Negotiable Instruments Act.
2. Adequacy of evidence and appreciation by the trial and appellate courts.
3. Applicability of statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act.
4. Validity of the defense that the cheque was issued as security.

Summary:

Legality of the Conviction under Section 138 of the Negotiable Instruments Act:

The petitioner challenged the judgment dated 9.1.2020 by the Sessions Judge, Sirmour, which affirmed the trial court's conviction and sentence under Section 138 of the Negotiable Instruments Act. The petitioner was sentenced to six months of simple imprisonment and ordered to pay compensation of Rs. 1,20,000/-.

Adequacy of Evidence and Appreciation by the Trial and Appellate Courts:

The trial court, based on the material evidence, convicted the petitioner for issuing a cheque that was dishonored due to insufficient funds. The appellate court upheld this decision. The High Court found no merit in the petitioner's argument that the lower courts failed to appreciate the evidence correctly, noting that the findings were based on a proper appreciation of facts and law.

Applicability of Statutory Presumptions under Sections 118 and 139 of the Negotiable Instruments Act:

The petitioner did not deny issuing the cheque or his signature on it. The court noted the statutory presumption under Sections 118 and 139 of the Act, which assumes the cheque was issued for a lawful liability. The petitioner failed to raise a probable defense to rebut this presumption, as required by law.

Validity of the Defense that the Cheque was Issued as Security:

The petitioner claimed the cheque was issued as security for shuttering equipment, not for a loan. The court found this defense unsubstantiated. The complainant's evidence, including the cheque, memo, and legal notice, was consistent and unchallenged. The court referred to the Apex Court's ruling in Sripati Singh v. State of Jharkhand, which held that a cheque issued as security can still attract Section 138 if it is dishonored.

Conclusion:

The High Court dismissed the criminal revision petition, finding no error in the judgments of the lower courts. The petitioner was directed to surrender and serve the sentence, and the trial court was instructed to release any deposited amount to the complainant upon application.