2024 (9) TMI 1238 - HC - Indian Laws

Dishonour of Cheque - acquittal of the sole respondent - discharge of burden under Section 139 of the Negotiable Instruments Act - HELD THAT - Evidently, in the case on hand, the prosecution discharged its burden to prove the requirement of Section 138 of the Negotiable Instruments Act. The sole respondent admitted that his signed cheques were misused. However, no evidence was led to prove this fact, therefore, presumption would be there in favour of the complainant that the cheque was issued by the accused for payment of the existing dues. The trial court has wrongly relied on some of the lapses on the part of the complainant to disbelieve that the complainant proved the cheque under Section 138 of the Negotiable Instruments Act and wrongly held that the accused has already discharged its burden under Section 139 of the Negotiable Instruments Act only for certain lapses of the complainant. This case is squarely covered by the dictum in RAJESH JAIN VERSUS AJAY SINGH 2023 (10) TMI 418 - SUPREME COURT . Hence, judgment relied upon by the learned counsel for the respondent is not applicable in the facts and circumstances of this case. The judgment of acquittal dated 24.8.2022 passed in Criminal Case No. 258/2016 by learned Special Metropolitan Magistrate, NI Act, Jodhpur stands hereby set aside and the sole respondent is convicted for the offence under Section 138 of the Negotiable Instruments Act - Considering the mitigating and aggravating circumstances appearing in this case as well as the fact that no previous conviction is there against the sole respondent, 2 months simple imprisonment is awarded alongwith fine of the cheque amount plus 30% of the same as compensation to be payable within a month, failing which, the said amount would be recoverable according to law prescribed for recovery of fine. Criminal appeal allowed.

Issues Involved:
1. Whether the cheque was issued against payment of any legal liability.
2. Whether the cheque bounced due to insufficient funds.
3. Whether the notice was sent within 30 days of dishonour of the cheque.
4. Whether the accused failed to pay back the cheque amount within 15 days of receipt of notice.
5. Whether the complaint was filed within the stipulated time.
6. Whether the accused discharged the burden under Section 139 of the Negotiable Instruments Act.

Issue-Wise Detailed Analysis:

1. Whether the cheque was issued against payment of any legal liability:
The appellant claimed that he had advanced Rs.4,39,000/- to the respondent, who issued cheque no. 626216 on 12.5.2009 for the said amount. The cheque was returned due to "insufficient funds" on 29.05.2009. The appellant sent a legal notice on 24.6.2009 and filed a complaint on 16.7.2009 after the respondent failed to pay the cheque amount. The respondent contended that the cheque was misused by the appellant and was not issued for any liability. The trial court concluded that the respondent failed to discharge his burden under Section 139 of the Negotiable Instruments Act, but also drew adverse inference due to the appellant's failure to produce a written agreement regarding the loan.

2. Whether the cheque bounced due to insufficient funds:
The cheque issued by the respondent was returned by the bank due to "insufficient funds," as evidenced by the return memo dated 29.05.2009. This fact was not disputed by the respondent.

3. Whether the notice was sent within 30 days of dishonour of the cheque:
The appellant sent a legal notice to the respondent on 24.6.2009, which was within the 30-day period required by law following the cheque's dishonour on 29.05.2009.

4. Whether the accused failed to pay back the cheque amount within 15 days of receipt of notice:
The respondent did not pay the cheque amount within 15 days of receiving the legal notice, leading to the filing of the complaint by the appellant.

5. Whether the complaint was filed within the stipulated time:
The appellant filed the complaint on 16.7.2009, which was within the statutory period after the respondent failed to make the payment within 15 days of receiving the notice.

6. Whether the accused discharged the burden under Section 139 of the Negotiable Instruments Act:
The trial court initially held that the respondent discharged his burden under Section 139 due to the appellant's failure to produce the written loan agreement. However, the appellate court noted that the respondent admitted to signing the cheque and failed to provide evidence supporting his claim of misuse. Citing the Supreme Court's judgments, the appellate court emphasized that the presumption under Section 139 requires the accused to prove the non-existence of the debt or liability. The appellate court concluded that the trial court wrongly relied on lapses by the complainant and that the respondent did not discharge his burden under Section 139.

Conclusion:
The appellate court set aside the trial court's judgment of acquittal and convicted the respondent under Section 138 of the Negotiable Instruments Act. The respondent was sentenced to 2 months of simple imprisonment and a fine equivalent to the cheque amount plus 30% as compensation. The respondent was directed to surrender within one month, and the bail bond was cancelled. The criminal appeal was allowed accordingly.

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