2020 (3) TMI 138 - HC - Indian Laws

Court overturns acquittal in cheque bounce case, emphasizes evidence evaluation and legal provisions

The High Court of Chhattisgarh allowed the appeal against the respondent's acquittal under Section 138 of the Negotiable Instruments Act, 1881. The Court ... Dishonor of Cheque - insufficiency of funds - acquittal of respondent for the offence under Section 138 of the Negotiable Instruments Act, 1881 - rebuttal of presumption - HELD THAT:- As per Section 139 of the Negotiable Instruments Act,1881, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. It is not a case of the respondent that he has not signed the cheque. A meaningful reading of the provisions of the Act, 1881 makes it ample clear that the person signed the cheque over to a payee remains liable and he may adduce any evidence to rebut presumption. Presumption will live, exist and survive and shall end only when contrary is proved by the accused/respondent. The trial Court recorded finding that there is no specific evidence that on which date loan was advanced, therefore, advancement of loan is not established. In view of this Court, finding arrived at by the trial Court is against the legal aspects of the matter. When the respondent himself has not deposed before the trial Court that he has not borrowed money from the appellant, presumption under Section 139 of the Act, 1881 will survive and remain exist and corroboration to the statement of the appellant is not required. On an overall assessment, it can be said that the finding of the trial Court is against the weight of the evidence and the same is not legal and contrary to the provisions of the Act, 1881, therefore, argument advanced on behalf of the respondent is not sustainable. The act of the respondent falls within mischief of Section 138 of the Act, 1881 - espondent is convicted under Section 138 of the Act, 1881 - appeal allowed. Issues:1. Appeal against acquittal under Section 138 of the Negotiable Instruments Act, 1881.2. Dispute over the issuance of cheques for a cash loan.3. Evaluation of evidence and legal presumptions under the Act.Issue 1: Appeal against acquittal under Section 138 of the Negotiable Instruments Act, 1881:The appellant appealed against the acquittal of the respondent by the Judicial Magistrate First Class under Section 138 of the Act. The appellant claimed to have given a cash loan to the respondent, who issued two cheques that were dishonored due to insufficient funds. The respondent failed to make payment even after receiving a legal notice, leading to the complaint under Section 138.Issue 2: Dispute over the issuance of cheques for a cash loan:The appellant argued that the cheques were issued for a debt, and the respondent's claim that they were for surety was an afterthought. Evidence presented by witnesses established the loan amount, issuance of cheques, dishonor, and lack of payment despite notice. The respondent's evidence failed to rebut the appellant's version, leading to the conclusion that the liability existed on the date of the cheque issuance.Issue 3: Evaluation of evidence and legal presumptions under the Act:The Court analyzed the evidence, including witness testimonies and documents, to determine the liability under Section 138. Legal presumptions under Sections 118 and 139 of the Act were discussed, emphasizing that the burden of proof lies with the accused to rebut the presumption. The Court found the trial court's findings against the weight of evidence and contrary to legal provisions, convicting the respondent under Section 138 and ordering payment of the due amount with interest.In summary, the High Court of Chhattisgarh allowed the appeal against the respondent's acquittal under Section 138 of the Negotiable Instruments Act, 1881. The Court found that the cheques were issued for a cash loan, not for surety, and the respondent failed to disprove the liability. Legal presumptions supported the appellant's claim, leading to the respondent's conviction and a fine of Rs. 1,60,000. The Court emphasized the importance of evidence evaluation and adherence to legal provisions in cases involving dishonored cheques, ensuring the discharge of the liability with interest if the due amount is not paid promptly.