2018 (10) TMI 1975 - HC - Indian Laws

Key Points in Cheque Bounce Case: Burden of Proof, Debt Amount, Trial Procedure

The court held that disputed questions of fact regarding the nature of the cheque and debt amount cannot be resolved in a quash application but should be ... Dishonor of Cheque - insufficiency of funds - cheque was issued as a security or not - rebuttal of presumption - Section 138 and 139 of the Negotiable Instruments Act - HELD THAT:- This Court is of the view that the same is a disputed question of fact and cannot be decided in a quash application. Similarly, whether the cheque amount exceeds the debt amount is also a disputed question of fact and can be decided only during trial. It is for the complainant-bank to establish the ingredients of the offences under Section 138 of the Negotiable Instruments Act and only thereafter the burden under Section 139 of the Negotiable Instruments Act will fall upon the accused. In this case, there is no admission by the complainant-bank that the cheque amount exceeds the debt amount - In S. Krishnamurthy Vs Chellammal [2015 (3) TMI 1386 - SUPREME COURT], the Hon'ble Supreme Court has very clearly held that while dealing with an application in Criminal Procedure Code, disputed questions of fact cannot be gone into. Hence, this petition is closed with liberty to the petitioner to raise all the points before the Trial Court. G.R.Surana/3 rd petitioner is directed to appear before the Trial Court within a period of two weeks from the date of receipt of a copy of this order and file an application under Section 436 Cr.P.C for bail - petition closed. Issues:1. Dispute over the nature of the cheque issued by the accused.2. Dispute regarding whether the cheque amount exceeds the debt amount.3. Resignation of one of the accused and its impact on the prosecution.Analysis:1. The complainant-bank alleged that the accused failed to pay the due amount within 90 days, leading to the dishonor of a cheque issued as per the terms of a credit facility. The accused argued that the cheque was given as security and not towards the discharge of the liability. The court held that such disputed questions of fact cannot be resolved in a quash application and should be determined during trial. Citing previous judgments, the court emphasized that the complainant must establish the elements of the offense under Section 138 of the Negotiable Instruments Act before the burden falls upon the accused.2. The accused contended that the cheque amount did not represent the correct debt amount, citing payments made towards the loan and property security provided. Referring to legal precedents, the defense argued that if the cheque amount exceeds the debt amount, a prosecution under Section 138 cannot be maintained. The court noted that the complainant's admission of receiving a partial payment in a previous case influenced the decision on whether the cheque amount exceeded the debt amount. It emphasized that disputed questions of fact should be addressed during trial, not in a quash application.3. The third petitioner, who had resigned from the accused company, raised concerns about the prosecution against them. The court observed discrepancies in the resignation date and the official filing, indicating that the petitioner's presence was necessary during the trial. It directed the petitioner to appear before the Trial Court within a specified period, allowing for bail and outlining conditions for future court appearances. The court clarified that the petitioner's presence could be dispensed with for certain hearings if specific conditions were met, emphasizing the importance of compliance to avoid further legal consequences.In conclusion, the judgment highlighted the importance of resolving disputed facts during trial rather than in a quash application. It underscored the burden on the complainant to establish the offense under the Negotiable Instruments Act and the need for accused parties to address their arguments in the appropriate legal forum. The court's directive regarding the presence of the resigned petitioner demonstrated the procedural considerations essential for a fair trial.