2023 (10) TMI 1248 - HC - Indian Laws

Dishonour of Cheque - existence of legally enforceable debt - benefit of doubt to accused or not - presumption of consideration under Secs.118(a) and 139 of the N.I Act - HELD THAT - In the case on hand, the complainant s case is that, Ext.P8 cheque was issued by the accused in discharge of a legally enforceable debt and the cheque got dishonoured when presented for collection and the accused failed to pay the demanded amount, despite receipt of the statutory lawyer notice - The accused denied the allegation and has raised a defence that he has no business transaction with the complainant. Instead, Ext.P8 cheque was issued by him to DW1 to purchase computers. It was misutilising the cheque, the complainant filed the false complaint. The courts below, after a threadbare analysis of the materials placed on record, have concurrently concluded that the accused had failed to shift the reverse onus of proof cast on his shoulders under Section 139 of the N.I. Act. Accordingly, the courts below found the accused guilty, and convicted and sentenced him for the above offence - There are no error, illegality or irregularity in the conclusion arrived at by the courts below. Thus, the conviction imposed by the courts below is confirmed. In DAMODAR S. PRABHU VERSUS SAYED BABALAL H. 2010 (5) TMI 380 - SUPREME COURT the Hon'ble Supreme Court held that unlike other forms of crime, the punishment under Section 138 of the N.I. Act is not a means for seeking retribution, but is a means to ensure payment of money. Complainant's interest lies primarily in recovering the money rather than seeing the drawer getting incarcerated. In an offence under Section 138 of the N.I. Act, the compensatory aspect of the remedy should be given priority over the punitive aspect. Thus lenient view as regards substantive sentence can be taken, by sentencing the revision petitioner to undergo imprisonment for one day(till the rising of the Court) and pay compensation for the cheque amount, which would do complete justice to both sides - revision petition is dismissed.

Summary

Issues involved:
The judgment involves the correctness and propriety of the judgments in Crl.Appeal No.898/2005 of the Court of the First Additional Sessions Judge, Thrissur, confirming the judgment passed in C.C No.144/2002 of the Court of the Judicial Magistrate of First Class, Chavakkad, regarding the offence under Sec.138 of the Negotiable Instruments Act.

Issue 1: Allegations and Defence
The complainant alleged that the accused borrowed a sum of Rs.6,00,000 and issued a cheque which got dishonoured. The accused denied the transaction and claimed he issued the cheque to someone else for a different purpose. The complainant argued the cheque was issued for a legally enforceable debt.

Issue 2: Presumption of Consideration
The N.I Act presumes consideration for negotiable instruments like cheques under Secs.118(a) and 139. The accused must rebut this presumption by proving the absence of a legally enforceable debt. The Supreme Court has clarified the concept of 'reverse onus' under Sec.139, emphasizing the accused's burden to raise a probable defence.

Issue 3: Analysis and Conclusion
The courts found the accused failed to shift the burden of proof under Sec.139. Despite the accused's denial and alternative explanation, evidence showed a business relationship between the parties. The accused's defence was deemed unconvincing, leading to his conviction under Sec.138. The High Court upheld the lower courts' decision, emphasizing the compensatory aspect of the remedy over punitive measures.

Separate Judgement:
The High Court modified the sentence due to the accused's age and health, reducing it to one day of imprisonment and ordering compensation payment. The Court highlighted the compensatory nature of Section 138 of the N.I. Act and prioritized the recovery of money over retribution. The execution of the sentence was deferred, and compliance was directed to the Trial Court.