2020 (11) TMI 883 - HC - Indian Laws

Conviction Affirmed u/s 138 NI Act: Fine Imposed, Claims of Cheque Misuse Dismissed Due to Lack of Evidence.

Nitai Majumder Versus Tanmoy Krishna Das

The HC upheld the lower courts' findings, affirming the petitioner's conviction under Section 138 of the NI Act. The sentence was modified to a fine of ... Dishonor of Cheque - Section 138 of the Negotiable Instruments Act, 1981 - existence of debt or not - indemnification of debts - receipt of demand notice - rebuttal of presumption - whether explanation offered by the petitioner is enough to disprove the statutory presumptions under Sections 138 and 139, NI Act? - HELD THAT:- In the case of Hiten P. Dalal [2001 (7) TMI 1172 - SUPREME COURT] it has been held by the Apex Court that the presumptions to be drawn by the court under Sections 138 and 139, NI Act are presumptions of law which cast evidential burden on the accused to disprove the presumptions. In the instant case, apparently the accused petitioner did not lead any evidence in rebuttal of such statutory presumptions. He has also failed to bring on record such facts and circumstances which would lead the courts below to believe that the liability, attributed to the accused petitioner was improbable or doubtful. Apparently there is no reason to disbelieve the case of the complainant. The explanation offered by the accused petitioner on the other hand is not founded on proof and it does not stand to reason. The object of statutory notice is to protect an honest drawer of the cheque by providing him a chance to make the fund sufficient in his bank account and correct his mistake. The accused petitioner could have availed this opportunity by accepting the demand notice instead of repeatedly avoiding its service. He could have accepted the notice and projected his case that he already made the repayment of the loan, had this case of him been true. Therefore, it can be safely held that the prosecution successfully discharged its burden in proving the case against the petitioner with the help of the statutory presumptions under the NI Act, and the accused has failed to rebut those presumptions and prove the contrary by offering provable explanation founded on proof. Service of notice - HELD THAT:- The complainant has led convincing evidence to prove that the postman visited the house of the accused at the known address on 4 dates. Every time the postman was told by the house inmates that he was out of station. The fact is proved by the report [Exbt.4 series] given by the postman. From the overall conduct of the accused, it is clear that he wanted to avoid the service of the notice - it cannot be said that the demand notice was not served on him. This court is of the considered view that the impugned judgment dated 02.11.2017 passed by the learned Sessions Judge of Gomati Judicial District at Udaipur in Criminal Appeal No.47(3) of 2015 whereby he affirmed the conviction of the accused petitioner and modified the sentence passed by the learned trial court does not call for any interference - conviction and sentence of the accused petitioner is upheld. He is directed to deposit the fine of ₹ 4,00,000/- only in the court of the learned Sessions Judge in Gomati Judicial District at Udaipur in terms of the modified sentence within a period of 02 months for disbursement to the complainant respondent namely Shri Tanmoy Krishna Das, failing which the accused petitioner will suffer the default sentence in terms of the said judgment and order of the learned Sessions Judge. Criminal Revision Petition stands dismissed. Issues Involved:1. Legally enforceable debt.2. Issuance of the cheque.3. Dishonor of the cheque.4. Service of demand notice.5. Rebuttal of statutory presumptions.Detailed Analysis:1. Legally Enforceable Debt:The petitioner and respondent were on good terms, and the petitioner frequently borrowed money from the respondent. On 15.01.2014, the petitioner borrowed Rs. 3,50,000 from the respondent, promising to repay by 30.11.2014. The petitioner failed to repay, leading to the issuance of a cheque for the same amount on 13.12.2014, which was dishonored due to insufficient funds. The trial court confirmed the existence of a legally enforceable debt, and the Sessions Judge upheld this finding, noting that the petitioner admitted issuing the cheque as security for the loan.2. Issuance of the Cheque:The petitioner issued Cheque No. 418431 dated 13.12.2014 for Rs. 3,50,000. The petitioner claimed the cheque was given as security and was misused by the respondent after repayment of the loan. However, the courts found that the petitioner did not provide evidence to support this claim. The trial court rejected the petitioner's defense, stating that the claim required proof which the petitioner failed to provide.3. Dishonor of the Cheque:The cheque was presented for collection on the same day it was issued but was returned on 15.12.2014 with an endorsement 'insufficient funds.' The trial court and Sessions Judge both affirmed that the cheque was dishonored due to insufficient funds in the petitioner's account.4. Service of Demand Notice:A demand notice was issued by the respondent on 30.12.2014, demanding payment within 15 days. The postman attempted to deliver the notice on multiple occasions, but the petitioner's house inmates refused to accept it, claiming the petitioner was out of station. The courts held that the notice was deemed served as per the law, citing precedents that once a notice is dispatched to the correct address, the onus shifts to the accused.5. Rebuttal of Statutory Presumptions:The petitioner argued that the cheque was issued as security and not for discharge of any debt. The courts noted that under Sections 138 and 139 of the NI Act, there is a presumption of law that the cheque was issued for discharge of a debt or liability. The petitioner failed to rebut this presumption with convincing evidence. The courts relied on Supreme Court judgments stating that mere denial of debt is insufficient; the accused must provide evidence to prove the non-existence of debt or liability.Conclusion:The High Court upheld the findings of the lower courts, affirming the conviction of the petitioner under Section 138 of the NI Act. The sentence was modified to a fine of Rs. 4,00,000, with a default sentence of six months simple imprisonment. The petitioner's arguments regarding the misuse of the cheque and improper service of notice were rejected due to lack of evidence and legal precedents supporting the respondent's case. The petition was dismissed, and the petitioner was directed to deposit the fine within two months.