2023 (9) TMI 1248 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - acquittal of the accused - rebuttal of the presumption - HELD THAT - In the present case, the Learned Trial Court failed to appreciate that the accused persons failed to adduce any evidence to discharge the onus placed upon them by the presumption in law available under section 139 of the Negotiable Instruments Act. Besides making a general denial of the fact that the cheque had been issued in discharge of legal debt and/or liability, the defence failed to adduce any evidence to rebut the presumption nor did it make out a case citing the reason for which the cheque can be held to have not been issued in discharge of legal debt and/or liability. In such circumstances, the Learned Trial Court, by considering the legal presumption available under Section 139 of the Negotiable Instruments Act to have been rebutted merely on denial made by the accused/respondents, has clearly failed to appreciate the scope and purport of section 139 of the Negotiable Instruments Act. The impugned order of acquittal is thus erroneous in law as also in facts and is thus liable to be set aside. Considering the fact that the presumption under Section 139 N.I. Act goes in favour of the complainant unless and until rebutted by the accused in accordance with law, the principal of Natural Justice requires that the complaint case be remanded back to the trial court for retrial with the direction that the Learned Magistrate shall issue notice upon both sides and allow the parties to adduce fresh evidence in respect of the presumption under Section 139 N.I. Act by calling for the relevant documents and proving the same in accordance with law and provide sufficient opportunity to the accused/opposite parties to rebut the said presumption and proceed accordingly in accordance with law. Thus the findings of the Learned Magistrate is clearly against the provisions of Section 139 of the N.I. Act and thus not in accordance with law - Appeal allowed.

Summary

Issues Involved:
1. Appeal against acquittal.
2. Appellant/Complainant's case.
3. Defence/Accused's case.
4. Evidence.
5. Analysis of Evidence.
6. Conclusion.

Summary:

1. Appeal against acquittal:
The appeal was filed against the judgment dated November 3, 2016, by the 19th Metropolitan Magistrate, Calcutta, in Complaint Case No. 440/10 under Section 138 of the Negotiable Instruments Act, 1881, which acquitted the accused.

2. Appellant/Complainant's case:
The appellant, a partnership firm dealing in gold ornaments, claimed that the accused, a job contractor, failed to return gold worth Rs. 20 lakhs and issued a cheque for Rs. 4,80,000, which was dishonored due to "Insufficient Funds". Despite a demand notice, the accused failed to make the payment, leading to the filing of the complaint. The appellant argued that the trial court did not consider the statutory presumption under Section 139 of the Negotiable Instruments Act and failed to account for the fact that relevant documents were in police custody due to another criminal case.

3. Defence/Accused's case:
The accused, represented by legal aid counsel, contended that the judgment under appeal was lawful and required no interference.

4. Evidence:
The complainant reiterated the case, presenting exhibits including the dishonored cheque and demand notice. The business relationship was admitted by the accused's lawyer.

5. Analysis of Evidence:
The trial judge found that the complainant failed to produce documents proving the accused's liability, which is crucial under Section 138 of the NI Act. The judge noted serious lacunae in the complainant's evidence, leading to the acquittal of the accused.

6. Conclusion:
The High Court found that the trial court failed to properly interpret Section 139 of the NI Act, which presumes the cheque was issued for a debt unless rebutted by the accused. The accused did not provide evidence to rebut this presumption. Thus, the acquittal was erroneous. The case was remanded for retrial, allowing both parties to present fresh evidence. The trial court was directed to expedite the trial and ensure the presence of the accused.

Order:
The appeal (CRA 154 of 2017) was allowed, setting aside the judgment dated November 3, 2016. The trial court was instructed to proceed with the trial expeditiously and in accordance with law. All connected applications were disposed of, interim orders vacated, and a copy of the judgment was sent to the trial court for compliance.