2023 (12) TMI 107 - HC - Indian Laws

Dishonour of Cheque - insufficient funds - whether the complainant has proved the case against the Accused for the offence under Section 138 of the Negotiable Instruments Act? - correctness of conviction of accused - HELD THAT - A person, who signs a Cheque and makes it over to the Payee remains liable unless he adduces evidence to rebut the presumption that the Cheque had been issued for payment of a debt or in discharge of a liability. The presumption is that the existence of a legally enforceable debt is to be presumed in favour of the complainant and the accused has to adduce evidence to rebut the presumption under section 139 of Negotiable Instruments Act. But in the case on hand the complainant failed to prove the case, per contra the accused probabilished his defence through sufficient evidence thereby the said case laws will not be helpful to decide the case in favour of the complainant. The trial Court in its judgment, has taken a view that the Accused has not denied the signature found in the complaint and the complainant proved her financial capacity to pay the amount by pledging her jewels and mortgaging the properties. But those mortgaged documents are unregistered documents and cannot be relied and those documents were also not marked. Further, the alleged pledging of jewels were not proved and only the complainant produced the redemption of jewels in the year 2010. But the alleged lending money was given in the year 2008. Further the trial Court failed to consider that P.W.2 himself admitted the employment under the first accused company and he only managed the accounts of the company and had transactions with the Bank and the Bank account was inoperative from 24.09.2005 onwards. Thereby the accused has probablized his defense. The trial Court has erroneously convicted the Accused by holding that the complainant has proved her case - the judgment of the trial Court is not sustainable and the judgment of the Appellate Court is well reasoned. There is no perverse or infirmity found on the judgment of the Appellate Court, thereby there is no warrant to interfere by this Court - Criminal appeal dismissed.

Summary

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Reversal of trial court judgment by the Appellate Court.
3. Financial capacity of the complainant.
4. Misuse of signed cheques by the complainant's husband.
5. Presumption under Section 139 of the Negotiable Instruments Act.

Summary:

1. Conviction under Section 138 of the Negotiable Instruments Act:
The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, 1881, sentencing them to six months of rigorous imprisonment and ordering them to pay compensation of Rs. 3,00,000/- within one month, failing which they would undergo three months of simple imprisonment.

2. Reversal of trial court judgment by the Appellate Court:
The Appellate Court reversed the trial court's judgment, holding that the complainant failed to prove the issuance of the cheque, financial capacity, and lack of pleadings in the complaint, thus acquitting the accused.

3. Financial capacity of the complainant:
The complainant alleged that the accused borrowed Rs. 3,00,000/- and issued a cheque which was dishonored due to "insufficient funds." The complainant claimed to have lent the money by pledging her jewels and mortgaging property. However, she failed to provide sufficient evidence to prove her financial capacity.

4. Misuse of signed cheques by the complainant's husband:
The accused contended that the complainant's husband, a former employee handling the company's accounts, misused signed cheques given for settling accounts. The complainant's husband admitted to handling the company's bank accounts, supporting the accused's defense.

5. Presumption under Section 139 of the Negotiable Instruments Act:
The trial court presumed the existence of a legally enforceable debt under Section 139 of the Negotiable Instruments Act. However, the Appellate Court found that the complainant failed to prove foundational facts, such as the acquaintance with the accused and the payment of money, thereby rebutting the presumption.

Conclusion:
The High Court upheld the Appellate Court's judgment, confirming the acquittal of the accused and dismissing the criminal appeal, finding no perversity or infirmity in the Appellate Court's decision.