2003 (3) TMI 768 - HC - Indian Laws

Accused convicted under Section 138 NI Act, sentenced to pay compensation. Judgment set aside.

Chacko Versus Joseph

Chacko Versus Joseph - TMI Issues Involved:1. Whether the cheques were issued for the discharge of a legally enforceable debt/liability.2. Whether the statutory time table under Section 138 of the Negotiable Instruments Act was followed.Issue-Wise Detailed Analysis:1. Whether the cheques were issued for the discharge of a legally enforceable debt/liability:The complainant alleged that the accused had issued three cheques totaling Rs. 6,00,000 for the discharge of a legally enforceable debt/liability. The cheques were dishonored due to insufficient funds. The accused admitted that the cheques were drawn on his bank account and bore his signature but contended that they were not issued to the complainant. Instead, he claimed that the cheques were stolen from his workplace where he had left them signed in blank. The accused suggested that the complainant had misused the cheques with mala fide intentions.The court noted that the presumption under Section 139 of the Negotiable Instruments Act places the burden on the accused to rebut the presumption that the cheques were issued for a legally enforceable debt. The court found the accused's defense-that he left signed blank cheques accessible to others and did not take any action upon discovering them missing-improbable and artificial. The accused did not file a police complaint or instruct the bank to stop payment, which further weakened his defense.The court emphasized that the improbability of the accused's version and the absence of any compelling evidence to support his claim led to the conclusion that the cheques were indeed issued for the discharge of a legally enforceable debt/liability. The court held that the complainant's evidence was consistent and credible, and the accused failed to discharge the burden under Section 139.2. Whether the statutory time table under Section 138 of the Negotiable Instruments Act was followed:The court examined whether the complainant adhered to the statutory time table for issuing notices and filing complaints under Section 138 of the Negotiable Instruments Act.For Crl. A. 430 of 1995, the court found that the notice of demand was sent on 24.10.1990, within 15 days of the dishonor of the cheque on 22.10.1990. The complaint was filed on 7.12.1990, within 45 days of the date of dispatch of the notice. Therefore, the statutory time table was followed satisfactorily.For Crl. A. Nos. 431 and 435 of 1995, the cheques were dishonored on 31.10.1990, and the notices of demand were issued on 7.11.1990. The complainant received the returned notices on 27.11.1990. The court held that the presumption of due service arises when the sender receives the returned notice. The complaints were filed on 1.1.1991, within 45 days of the deemed service date of 27.11.1990. Thus, the statutory time table was followed in these cases as well.The court rejected the contention that the notices issued on 21.11.1990 and 2.12.1990 were valid, as they were not sent within 15 days of the date of knowledge of dishonor. The court held that the presumption of due service should be drawn when the sender receives the returned notice, provided the sender acts reasonably and does not sleep over his rights.Conclusion:The court found the accused guilty of the offense under Section 138 of the Negotiable Instruments Act. The impugned common judgment was set aside, and the accused was convicted and sentenced to imprisonment till the rising of the court. Additionally, the accused was directed to pay specific amounts as compensation to the complainant, with default sentences of simple imprisonment for three months. The court instructed the learned Magistrate to take necessary steps for the execution of the sentence, with the respondent required to appear before the Magistrate on 30.6.2003.