2017 (5) TMI 1116 - HC - Indian Laws

Conviction upheld for dishonoring cheque under NI Act. Failure to rebut presumption of debt. No irregularity found.

U. Nirmala Metha Versus S.V.S. Ramaprakash @ Prakash

The court upheld the conviction and sentence of the petitioner for dishonoring a cheque under Section 138 of the Negotiable Instruments Act. The ... Offence under Section 138 of Negotiable Instrument Act - existence of liability or enforceable debt - Held that:- The petitioner/accused failed to prove by any probable defense that the existence of liability was either improbable or doubtful. So far as the judgments relied upon by the learned counsel appearing for the petitioner in Rangappa (2010 (5) TMI 391 - SUPREME COURT OF INDIA) has held that the petitioner can raise the presumption by preponderance of probabilities and if the accused is able to raise a probable defence, which creates a doubt about the existence of liability or enforceable debt, then the prosecution can fail. But, in the instant case, the petitioner has failed to raise any probable defence to rebut the presumption. Hence, the above judgment is not applicable to the petitioner's case. The another judgment relied upon by the learned counsel for the petitioner in T.R. Palanisamy (2012 (6) TMI 862 - MADRAS HIGH COURT ), is also not factually applicable to the petitioner's case. In the above circumstances, it is of the considered view that the petitioner/accused had failed to rebut the initial presumption under Section 139 of Negotiable Instruments Act. Considering all the above materials, both the court belows had convicted the petitioner and find no illegality or irregularity in the judgment of the courts-below, hence, the revision fails and is liable to be dismissed. Issues Involved:1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act.2. Presumption of debt and burden of proof under Section 139 of the Negotiable Instruments Act.3. Validity of cheque issuance and alleged coercion.4. Compliance with legal requirements under Section 138 of the Negotiable Instruments Act.5. Rebuttal of presumption by the accused.Comprehensive, Issue-Wise Detailed Analysis:1. Legally Enforceable Debt under Section 138 of the Negotiable Instruments Act:The respondent/complainant filed a private complaint against the petitioner for the offence under Section 138 of the Negotiable Instruments Act, alleging that the petitioner issued a cheque for Rs. 13,98,537/- which was dishonored due to 'payment stopped by the drawer.' The trial court convicted the petitioner and sentenced her to two years of simple imprisonment and compensation. The lower appellate court confirmed the conviction. The complainant's case was that the petitioner, who ran a jewelry shop, had business transactions with the complainant and failed to clear dues, leading to the issuance of the disputed cheque.2. Presumption of Debt and Burden of Proof under Section 139 of the Negotiable Instruments Act:The trial court held that since the petitioner admitted to issuing the cheque, there was a presumption of a legally enforceable debt under Section 139 of the Negotiable Instruments Act. The petitioner failed to rebut this presumption with any probable defense. The appellate court also upheld this view. The petitioner contended that the complainant did not produce account books or income tax returns to establish the debt, which should create doubt and lead to an adverse inference against the complainant.3. Validity of Cheque Issuance and Alleged Coercion:The petitioner argued that the cheque was obtained forcibly using police pressure and there was no legally enforceable debt. The complainant had lodged a police complaint, leading to a compromise where the petitioner agreed to clear dues by issuing the cheque. However, the petitioner did not examine any witnesses or produce documents to support her claim of coercion. The court found that the petitioner failed to establish that the cheque was obtained forcibly.4. Compliance with Legal Requirements under Section 138 of the Negotiable Instruments Act:The complainant issued a legal notice after the cheque was dishonored, but the petitioner did not reply. Only after the complaint was filed did the petitioner send a notice claiming the complainant owed her money. The court noted that the petitioner’s notice did not mention the disputed cheque or any coercion. The court held that the legal requirements under Section 138 were met by the complainant.5. Rebuttal of Presumption by the Accused:The court emphasized that under Section 139, there is a rebuttable presumption that the cheque was issued for a legally enforceable debt. The petitioner needed to provide a probable defense to rebut this presumption. The court cited Supreme Court judgments stating that the accused must show the non-existence of debt by preponderance of probabilities. The petitioner’s bare denial and counterclaim without proof were insufficient to rebut the presumption. The court concluded that the petitioner failed to raise a probable defense, and thus the presumption of debt remained.Conclusion:The court dismissed the criminal revision case, finding no illegality or irregularity in the judgments of the lower courts. The petitioner failed to rebut the presumption of a legally enforceable debt under Section 139 of the Negotiable Instruments Act, and the conviction and sentence were upheld. Consequently, connected miscellaneous petitions were also closed.