2016 (8) TMI 1553 - HC - Indian Laws

Court affirms conviction under Section 138 of Negotiable Instruments Act, emphasizes burden of proof.

The court upheld the lower courts' decisions in a criminal revision petition challenging a conviction under Section 138 of the Negotiable Instruments Act. ... Section 138 of the Negotiable Instruments Act - presumption under Section 139 - presentation and representation of cheque - blank cheque and third party misuse defence - proof of consideration and burden of proof - reliability and admissibility of documentary evidenceBlank cheque and third party misuse defence - presumption under Section 139 - proof of consideration and burden of proof - Whether the defence that the cheque was a blank cheque handed to a third party (Perumal) and misused by the complainant rebutted the statutory presumption and required acquittal - HELD THAT: - The revision petitioner admitted the signature on the dishonoured cheque but contended the cheque was one of several blank cheques handed to a third party, Perumal, who purportedly misused them. The Court examined the material relied on by the petitioner and found no sufficient evidence that the cheque had been delivered to Perumal for safekeeping or that Perumal had been examined as a defence witness. The petitioner failed to provide a satisfactory explanation for non examination of Perumal and the purported notice documents (Exs.D8 and D9) were created after the filing of the complaint and contradicted the cheque book record (Ex.D4). Given the admission of signature and the absence of cogent material to rebut the statutory presumption under Section 139, the Court held that the defence of misuse of a blank cheque by a third party was not established and could not displace the presumption of issuance for consideration. [Paras 7, 9, 10, 11, 14]The defence that the cheque was a blank cheque handed to Perumal and was misused by the complainant is rejected; the presumption under Section 139 stands unrebutted.Presentation and representation of cheque - reliability and admissibility of documentary evidence - Section 138 of the Negotiable Instruments Act - Whether the requirements of presentation/representation of the cheque and service of notice under the Negotiable Instruments Act were complied with so as to sustain conviction under Section 138 - HELD THAT: - The petitioner challenged the prosecution on the ground that the cheque was not presented within the time prescribed and that notices were not properly issued following the initial dishonour. The Court reviewed the sequence of presentation and representation (initial presentation, return for 'funds insufficient', re presentation and return) and found that the trial Court had evaluated the evidence and documents and concluded that procedural requirements leading to prosecution under Section 138 were satisfied. The Court also noted the complainant's testimony and accepted that he had funds and competence to lend, rejecting the attempt to impeach the complainant's capacity on cross examination. No material infirmity or illegality in the lower courts' appreciation of presentation/representation and notice requirements was found. [Paras 2, 8, 14]The courts below correctly found compliance with presentation/representation and notice requirements; conviction under Section 138 is sustained.Final Conclusion: The High Court found no illegality in the concurrent findings of the trial and appellate courts. The contention that the cheque was a blank cheque handed to a third party and misused was not proved; the presumption under Section 139 remained unrebutted and the conviction under Section 138 of the Negotiable Instruments Act is upheld. The criminal revision is dismissed. Issues:Conviction under Section 138 of the Negotiable Instruments Act, Misuse of blank cheque, Failure to prove issuance of cheque to Perumal, Contradictions in evidence, Presumption under section 139 of the Negotiable Instruments Act.Analysis:The case involves a criminal revision petition challenging a judgment of conviction and sentence under Section 138 of the Negotiable Instruments Act. The petitioner borrowed a sum and issued a cheque which was dishonored twice due to insufficient funds. The petitioner argued that the cheque was not presented within the prescribed time and that the complainant failed to prove the borrowing of the sum. The petitioner contended that the blank cheque was signed without consideration and was misused by the complainant, urging the dismissal of the case. The respondent, on the other hand, argued that the trial court's decision was correct, emphasizing the petitioner's admission regarding the issuance of the cheque. The court examined the evidence, including the petitioner's failure to prove the issuance of the cheque to Perumal and the contradictions in the evidence presented.The petitioner admitted the signature on the dishonored cheque but failed to provide sufficient evidence that it was issued to Perumal. The court rejected the argument that the blank cheque was misused, as the petitioner could not substantiate the claim. Additionally, the petitioner's contention regarding the complainant's source of funds was dismissed, as the evidence did not support the claim. The court highlighted the presumption under section 139 of the Negotiable Instruments Act, placing the burden on the accused to rebut it. The court also addressed discrepancies in the names mentioned in the complaint and evidence presented.The court analyzed the petitioner's submission regarding the issuance of the cheque to Perumal, noting inconsistencies in the evidence and the lack of examination of key witnesses. The court dismissed the petitioner's reliance on certain notices and records, deeming them created for the case. The court referenced a judgment that was deemed inapplicable to the present case. The respondent cited relevant judgments to support their contention, emphasizing the sufficiency of funds with the complainant and the consideration behind the issuance of the cheque by the petitioner.Ultimately, the court upheld the lower courts' decisions, dismissing the criminal revision petition. The court found no illegality or infirmity in the orders passed by the lower courts and concluded that the cheque was issued for consideration. The judgment highlights the importance of substantiating claims, addressing contradictions in evidence, and the burden of proof in cases under the Negotiable Instruments Act.