Accused fails to rebut statutory presumption in cheque dishonour case under Section 138 Negotiable Instruments Act

The HC dismissed the accused's petition in a dishonour of cheque case under Section 138 of the Negotiable Instruments Act. The accused failed to successfully rebut the statutory presumption under Section 139 that the cheque was issued for discharge of debt or liability. Despite the accused's claim that blank cheques were misused, the court found no evidence to support this defense. The accused's signatures on the cheque were admitted, and mere statements without positive evidence were insufficient to establish probable defense. The court upheld the conviction, emphasizing that statutory presumption favors the complainant when the accused cannot prove the cheque was issued as security rather than for debt discharge.

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Issues Involved:
1. Validity of the judgment/order of conviction and sentence under Section 138 of the Negotiable Instruments Act.
2. Legality of the enhancement of compensation from Rs. 7.00 Lakh to Rs. 8.50 Lakh.
3. Admissibility and sufficiency of evidence regarding the issuance and dishonor of the cheque.
4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
5. Rebuttal of statutory presumption by the accused.

Detailed Analysis:

1. Validity of the judgment/order of conviction and sentence under Section 138 of the Negotiable Instruments Act:
The complainant alleged that the accused issued two cheques for the payment of apple boxes, which were dishonored due to insufficient funds. The trial court convicted the accused under Section 138 of the Negotiable Instruments Act, sentencing her to two months of simple imprisonment and a compensation of Rs. 7.00 Lakh. The Sessions Judge dismissed the accused's appeal and upheld the conviction, enhancing the compensation to Rs. 8.50 Lakh. The High Court found no illegality or infirmity in the judgments of the lower courts, confirming the conviction and sentence.

2. Legality of the enhancement of compensation from Rs. 7.00 Lakh to Rs. 8.50 Lakh:
The complainant appealed for an enhancement of the compensation, which the Sessions Judge granted, increasing the amount to Rs. 8.50 Lakh. The High Court upheld this enhancement, noting that the accused had failed to comply with multiple opportunities to make the payment as ordered by the court.

3. Admissibility and sufficiency of evidence regarding the issuance and dishonor of the cheque:
The complainant successfully proved the issuance of the cheque and its dishonor due to insufficient funds. The evidence included the complainant's testimony, the statement of account, and the statutory demand notice. The accused admitted to borrowing money and signing the cheque but claimed the amount was not filled by her. The court found this defense insufficient to rebut the presumption of lawful liability.

4. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The court emphasized that once the execution of the cheque is admitted, a presumption arises under Section 139 that the cheque was issued for the discharge of debt or liability. This presumption is rebuttable, but the accused must provide sufficient evidence to do so. The accused's admission of signing the cheque and the lack of evidence to support her claim of misuse of blank cheques led the court to uphold the presumption in favor of the complainant.

5. Rebuttal of statutory presumption by the accused:
The accused attempted to rebut the presumption by claiming the cheque was issued as a security and not for the discharge of a debt. However, she failed to provide convincing evidence to support this claim. The court cited precedents, including Hiten P. Dalai v. Bratindranath Banerjee and Basalingappa vs. Mudibasappa, to highlight that the standard for rebutting the presumption is the preponderance of probabilities. The accused's defense was deemed improbable and insufficient to rebut the statutory presumption.

Conclusion:
The High Court dismissed the revision petition, upholding the judgments of the lower courts. The accused was directed to surrender and serve the sentence. The court reiterated the principles regarding the presumption under Sections 118 and 139 of the Negotiable Instruments Act and the burden on the accused to rebut this presumption with sufficient evidence.

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