2023 (8) TMI 1288 - HC - Indian Laws

Dishonour of Cheque - acquittal of accused - blank signed cheques - rebuttal of presumptions - Loan advanced or not - evidences not appreciated in correct manner - several contradictions in the case set out by the complainant in the legal notice. Black signed cheques - HELD THAT - This Court notes that it was rightly held by both the Courts below, after taking note of judicial precedents, that the law did not require the entire cheque to be filled by the drawer only and if the signatures were admitted, the person signing the cheque would be liable to the holder for the amount as mentioned in the cheque, in due course. The contention raised on behalf of petitioner that since the complainant had filled the details on the blank signed cheque handed over to her by the petitioner, the same would lead to an inference that there was no legally recoverable debt, is without any merit. As revealed from records including cross-examination of the petitioner, the petitioner thereafter had not asked the complainant to return his blank signed cheques nor he had lodged any complaint in this regard with the police or any other department. It is also a matter of record that the complainant had presented the cheques for encashment not only once but twice, however, the petitioner had even then neither approached or contacted the complainant, nor he had given any reply to the legal notice sent by her despite having received the same - the defence raised by the petitioner that the cheques were not issued toward a legally enforceable debt did not hold any ground. As far as the other contention that income tax officer had informed the Court that income tax returns of the complainant for several years in between were not available with them is concerned, it is to be noted that the officer concerned had informed the Court that the department was not able to procure the required documents despite best efforts as the voluminous records had got mixed up due to shifting of their offices. Further, as regards the argument that the complainant was not financially strong so as to have advanced any loan to the petitioner, the complainant had stated that for the grant of first loan to the petitioner, she had obtained a loan of Rs. 6.35 lakhs from her mother-in-law and taken rest amount from the chest reserves of home and for the second loan, she had sold her jewellery. These averments of the complainant were also corroborated from her income tax returns and other material produced by the complainant. This Court is also of the view that the defence raised by the petitioner was not sufficient to rebut the presumption raised against him under Section 118(a) and 139 of NI Act, and where the issuance of cheques and signatures on the same were not disputed and when the complainant was sufficiently able to establish the factum of having advanced loans to the petitioner as well as their sources, this Court find no infirmity with the judgment passed by the learned ASJ vide which the conviction of the petitioner under Section 138 of NI Act as recorded by the learned MM was affirmed. Petition dismissed.

Summary

Issues Involved:
1. Admissibility and filling of details on blank signed cheques.
2. Proving the factum and particulars of the alleged loan.
3. Financial capacity of the complainant to advance the loan.
4. Examination of witnesses and sufficiency of evidence.
5. Rebuttal of presumption under Sections 118(a) and 139 of NI Act.

Summary of Judgment:

1. Admissibility and Filling of Details on Blank Signed Cheques:
The court noted that the complainant admitted to filling in details on the blank signed cheques handed over by the petitioner. The petitioner accepted that the cheques were signed by him and drawn on his bank account. The court referenced the Supreme Court's decision in *Bir Singh v. Mukesh Kumar* (2019) which clarified that a signed blank cheque, voluntarily presented, attracts presumption under Section 139 of the Negotiable Instruments Act. The law does not require the entire cheque to be filled by the drawer, and the presumption of legal liability stands unless rebutted by the accused.

2. Proving the Factum and Particulars of the Alleged Loan:
The complainant's testimony and income tax returns corroborated the claim of advancing loans to the petitioner. The court observed that the complainant had presented sufficient documentary evidence, including income tax returns and balance sheets, which reflected the loans given to the petitioner. Despite the petitioner's argument that the complainant's financial capacity was insufficient, the court found that the complainant had demonstrated her ability to advance the loans through documented sources like loans from her mother-in-law and sale of jewelry.

3. Financial Capacity of the Complainant to Advance the Loan:
The court noted that the complainant's financial capability was corroborated by her income tax returns and balance sheets, which showed sufficient funds and assets to advance the loans. The petitioner's failure to provide any evidence of his financial soundness or to rebut the complainant's financial capacity further weakened his defense.

4. Examination of Witnesses and Sufficiency of Evidence:
The petitioner argued that the complainant failed to examine relevant witnesses and relied on insufficient evidence. However, the court found that the authenticated copies of the complainant's income tax returns and other documents provided sufficient proof of the loans. The court also noted that the petitioner did not take steps to examine the alleged creditors or provide any material evidence to support his claims.

5. Rebuttal of Presumption under Sections 118(a) and 139 of NI Act:
The court held that the petitioner failed to rebut the presumption under Sections 118(a) and 139 of the NI Act. The petitioner did not provide a plausible defense or sufficient evidence to counter the presumption of legal liability. The court affirmed that the complainant had met the essential requirements of Section 138 of the NI Act, and the defense raised by the petitioner was unworthy of credence.

Conclusion:
The court dismissed the revision petition, upholding the judgments of the lower courts which convicted the petitioner under Section 138 of the NI Act. The petitioner was directed to pay the remaining fine/compensation and surrender to serve the substantive sentence awarded. The judgment was ordered to be uploaded on the website forthwith.