2024 (9) TMI 104 - HC - Indian Laws

Dishonour of Cheque - burden of proof of outstanding due on the complainant - failure to consider in the Criminal Revision filed by the petitioner that the sentence awarded is illegal. Whether the appellate court has acted with material irregularity and illegality in assuming burden of proof of outstanding due on the complainant in the facts and circumstances of this case? - HELD THAT - The respondent-accused admitted her signature on the cheque but did not appear in the witness-box to discharge the reverse burden. Her husband DW-1 claims to have been looking after the business of Sushila Co., but failed to discharge this burden by producing books of accounts etc. or folio of cheque-book as to against which head the cheque was issued or in fact there is entry of purchase of 100 Tins of Oil in the books of accounts or not, rather simply conveyed evasive reply that he is not aware of the fact that whether Sushila Co., had purchased 100 Tins of Oil from the petitioner, therefore, the accused evidently failed to discharge the burden to prove that the cheque was not issued against existing debt. The learned appellate court has mis-construed the law that burden of proof was on the complainant. Further, the appellate court has travelled beyond the scope of proof of charge under Section 138 of the Negotiable Instruments Act by finding fault that the residential address of accused is different than her business premises. The accused not has denied that she has business at the referred premises. Whether the appellate court failed to consider in the Criminal Revision filed by the petitioner that the sentence awarded is illegal inasmuch as it is not consistent with the requirement of minimum punishment under Section 138 of the Negotiable Instruments Act? - HELD THAT - A bare perusal of provisions of Section 138 of the Negotiable Instruments Act makes it crystal clear that for the offence under the said provision, the punishment would be imprisonment for a term which may extend to two years or with fine which may extend to twice the amount of the cheque, or with both. In the case on hand, the trial Judge has awarded sentence only but the sentence cannot be less than the cheque amount. It may extend to twice the cheque amount. Since the trial Judge has not passed minimum sentence consistent with the law, the same is revisable one, hence, dismissal of Criminal Revision No.24/1999 stands set aside and it is restored before the appellate court, who shall pass order according to law considering propriety of sentence. Technically the petitioner should have challenged the common impugned order separately as the said order was passed in above referred criminal appeal as well as criminal revision petition. The court can pass a common order in two matters connected with each other but it should be challenged by filing separate petitions. However, the aforesaid technicality would not fetter the powers of this Court under Section 397 Cr. P.C., to suo moto take cognizance and revise, if any illegality or correctness in the proceedings before the inferior criminal court, comes to the notice of Court. This criminal revision is allowed.

Issues Involved:
1. Whether the appellate court acted with material irregularity and illegality in assuming the burden of proof of outstanding dues on the complainant.
2. Whether the appellate court failed to consider that the sentence awarded is illegal as it is not consistent with the requirement of minimum punishment under Section 138 of the Negotiable Instruments Act.

Detailed Analysis:

Issue 1: Burden of Proof of Outstanding Dues
The petitioner filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, alleging that the respondent issued a cheque for Rs. 40,600/- which was dishonoured due to insufficient funds. The petitioner presented the cheque to the bank, which was returned unpaid. Subsequently, a notice was sent to the respondent demanding payment, which was not fulfilled within 15 days.

During the trial, the petitioner provided evidence including the bounced cheque (Exhibit-1), bank return memo (Exhibit-2), notice (Exhibit-3), and the respondent's reply (Exhibit-6). The respondent admitted her signature on the cheque but claimed it was misused by an employee. The trial court convicted the respondent, imposing a fine of Rs. 25,000/-, out of which Rs. 20,000/- was to be paid as compensation to the petitioner.

The appellate court set aside the conviction, reasoning that the petitioner failed to provide a bill proving the sale of oil and questioned the business address details. The High Court found that the appellate court misconstrued the law by placing the burden of proof on the complainant. Under Section 139 of the Negotiable Instruments Act, once the complainant proves the cheque was issued, the burden shifts to the accused to prove otherwise. The respondent failed to discharge this burden, as she did not produce any evidence to rebut the presumption that the cheque was issued for a debt or liability.

Issue 2: Consistency of Sentence with Section 138 of the Negotiable Instruments Act
The trial court imposed a fine but did not adhere to the statutory requirement that the punishment could include imprisonment for up to two years or a fine up to twice the cheque amount, or both. The appellate court dismissed the petitioner's revision challenging the sentence as being devoid of merit.

The High Court observed that the sentence awarded by the trial court was not consistent with the mandatory provisions of Section 138 of the Negotiable Instruments Act. The minimum punishment should at least equal the cheque amount, and it can extend to twice that amount. The High Court set aside the dismissal of the criminal revision and restored it for reconsideration by the appellate court to pass an order consistent with the law.

Conclusion
The High Court concluded that the appellate court's judgment was flawed due to a misinterpretation of the burden of proof under Section 139 of the Negotiable Instruments Act. The High Court remitted the matter back to the appellate court for reconsideration according to the correct legal standards. Additionally, the High Court addressed the technicality of filing separate petitions for challenging a common order but exercised its revisional jurisdiction to rectify the identified illegalities.

Summary
The High Court allowed the criminal revision, setting aside the appellate court's judgment and remitting the matter back for reconsideration. The High Court emphasized the correct application of the burden of proof under Section 139 and the necessity of adhering to the statutory punishment provisions under Section 138 of the Negotiable Instruments Act.

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