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2023 (5) TMI 929 - HC - Indian LawsDishonour of Cheque - legally enforceable debt or not - Failure to prove source of loan given - Failure to rebut presumption u/s 139 of NI Act - opportunity to explain the incriminating circumstances not provided - HELD THAT - The learned Trial Court had no reason to hold that the accused person had no liability to issue the cheque as he did not incur any liability by taking loan from the complainant. It was the wife of the accused person who took the loan. It is further observed by learned Trial Court that there was no evidence to show that the accused had the capacity to lend money. He did not have any licence to lend money as well. When it is admitted by Soumen De that the cheque was issued by him, it is to be presumed that he issued the cheque in order to repay the loan incurred by him and his wife. The onus was shifted upon the drawer of the cheque, to rebut such presumption. In his bid to discharge his onus Soumen De, respondent no. 2 took two specific defence. According to the respondent, the money was never received by him as loan other than a sum of Rs. 20,000/-. The loan was of taken by his wife and during subsistence of their marriage. His wife told him that she would take care of the loan. The other defence of the accused person is that the complainant did not have the capacity to extend a sum of Rs. 8,60,000/- as loan. The stand taken by the accused person, appear to be mutually contradictory. If the loan is taken by his wife and his wife assured him that she would take care of the issue of repayment of loan, it indicates that the complainant had the capacity to accommodate the accused person or his wife and to pay a sum of Rs. 8,60,000/- towards loan, as claimed by the complainant - the accused person failed to raise a probable defence to rebut the presumption under Section 139 of the NI Act. Considering the language used in Section 138 of the NI ACT, it can be said that it is only the drawer of the cheque who can be made liable for the penal action under the provisions of the NI Act. It is settled law that strict interpretation is required to be given to penal statutes - When drawer of the cheque issued the cheque and failed to rebut the presumption, there is hardly any reason to dismiss the petition of complaint on the ground that the loan was not taken by the drawer of the cheque. In fact, as the cheque was not issued by Paramita De, learned Trial Court had no reason to issue process against her in the proceeding under Section 138 of the N.I. Act, though she may be liable to legal action in other forum. Having admitted the fact that the cheque Exhibit 2 contains his signature, the accused person has incurred the liability to pay the money and also he has made himself culpable for the offence within the meaning of section 138 of the NI Act. By several judicial pronouncement, apart from the statutory provision as laid down under section 138 of the NI Act, it has become settled principle of law that the person who issues the cheque drawn on an account maintained by him for payment of any amount to another person, from out of that account for the discharge, in whole or in part of any debt or liability, in case of dishonour of the cheque shall have to face the consequences - It goes without saying that an accused person is presumed to be innocent unless proved guilty and an order of acquittal strengthens such presumption in favour of the accused person but the same rule cannot be made applicable with same rigour while dealing with an offence under section 138 of the NI Act, where a presumption is available that the holder of the cheque received the cheque for the discharge of any debt or liability either wholly or in part. This presumption is rebuttable. The accused person has failed to rebut such presumption. The learned trial court committed grave mistake in recording an order of acquittal, upon absolute misreading of not only the evidence on record but also upon erroneous understanding of statutory provision of law as laid down under section 138 of the NI Act. Learned Trial Court even after drawing up presumption, proceeded with the view that the complainant was to prove the case beyond reasonable doubt. It was but a fundamental error committed by learned Trial Court. The impugned judgement therefore, is not sustainable in law - appeal allowed.
Issues Involved:
1. Appreciation of evidence and misreading by the Trial Court. 2. Presumption under Section 139 of the NI Act and its rebuttal. 3. Proper examination of the accused under Section 251 of the CrPC. 4. Financial capacity of the complainant to lend the money. 5. Legal principles regarding acquittal under Section 138 of the NI Act. Summary: Issue 1: Appreciation of Evidence and Misreading by the Trial Court The appellant contended that the Trial Court failed to appreciate the evidence on record, leading to an erroneous acquittal. The complainant had provided evidence substantiating that a sum of Rs. 8,60,000/- was taken by the accused through three documents. The Trial Court, however, dismissed the complainant's testimony due to doubts about his financial capacity to lend the money. Issue 2: Presumption under Section 139 of the NI Act and Its Rebuttal The appellant argued that the cheque issued by the accused carried a presumption of discharge of liability under Section 139 of the NI Act. The accused admitted his signature on the cheque but claimed no liability, stating his ex-wife would handle the loan. The High Court emphasized that the accused failed to rebut the presumption, as his defenses were contradictory and did not raise a probable defense. Issue 3: Proper Examination of the Accused under Section 251 of the CrPC The respondent argued that the Trial Court did not properly examine the accused under Section 251 of the CrPC, causing prejudice. The High Court acknowledged that the Trial Court did not narrate the substance of the accusation properly but concluded that the accused was not prejudiced as he stood trial and adduced evidence. Issue 4: Financial Capacity of the Complainant to Lend the Money The Trial Court questioned the complainant's financial capacity to lend Rs. 8,60,000/-, leading to an adverse presumption. The High Court held that the financial capacity of the complainant should not be a ground to dismiss a proceeding under Section 138 of the NI Act when the cheque amount matched the loan amount. Issue 5: Legal Principles Regarding Acquittal under Section 138 of the NI Act The High Court referred to various judgments, emphasizing that mere creation of doubt by the accused does not suffice to rebut the presumption under Section 139 of the NI Act. The Trial Court's approach was erroneous as it required the complainant to prove his case beyond reasonable doubt, which is not the standard in Section 138 cases. Conclusion: The High Court found that the Trial Court committed a grave mistake in acquitting the accused based on a misreading of evidence and misunderstanding of the law under Section 138 of the NI Act. The appeal was allowed, setting aside the acquittal. The accused was found guilty and ordered to pay a fine of Rs. 17,20,000/- within three months, failing which he would undergo imprisonment for two years. The fine amount would be given to the complainant as compensation.
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