2020 (11) TMI 891 - HC - Indian Laws

Conviction upheld for dishonored cheques under Section 138. Burden of proof on accused. Importance of evidence stressed.

Raju M. Thomas Versus State Of Kerala

The court upheld the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881, due to dishonored cheques and failure to ... Dishonor of Cheque - insufficiency of funds - non-discharge of debt or liability - the accused failed to pay the amount covered under the cheques within fifteen days from the date of receipt of the statutory notice - Section 138 of the Negotiable Instruments Act, 1881 - HELD THAT:- It is well settled law that when concurrent findings of facts rendered by the trial court and the appellate court are sought to be set aside in revision, the High Court does not, in the absence of perversity, upset factual findings arrived at by the two courts below. It is not for the revisional court to re-analyse and reinterpret the evidence on record in a case, where the trial court has come to a probable conclusion. Unless the contrary is proved, it is presumed that the holder of a cheque received the cheque of the nature referred to in Section 138 of the NI Act for the discharge, in whole or in part, of any debt or other liability. In the case at hand, the accused has no case that he has not signed the cheque or parted with under any threat or coercion. That apart, the accused has no case that the cheque had been lost irrecoverably or stolen. The accused failed to prove in the trial by leading cogent evidence that there was no debt or liability. Both the trial court and the appellate court rightly held that the burden was on the accused to disprove the initial presumption under Sections 118 and 139 of the NI Act. The burden is not discharged rightly. The complaint was filed before the trial court in 2007. The complainant has been prosecuting this case for the last 16 years. The accused is sentenced to pay a fine of ₹ 2,00,000/- and in default of payment of fine to undergo simple imprisonment for a period of four months. In view of the situation prevailing in the country due to Covid-19 pandemic, the accused is given six months time from today to pay the fine amount - the criminal revision petition is partly allowed. Issues:1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.2. Burden of proof on accused to disprove initial presumption under Sections 118 and 139 of the NI Act.3. Evaluation of evidence and statutory notices.4. Applicability of legal precedents in determining liability.5. Modification of sentence in light of case circumstances.Issue 1: Conviction under Section 138 of the Negotiable Instruments Act, 1881:The judgment pertains to a criminal revision petition challenging the conviction and sentence under Section 138 of the NI Act. The accused had issued cheques that were dishonored due to insufficient funds, leading to a complaint by the 1st respondent. The trial court found the accused guilty, emphasizing the statutory notice issued and non-payment by the accused. The court highlighted the importance of evidence and burden of proof in such cases, emphasizing the presumptions under Sections 118 and 139 of the NI Act. The accused's defense of repayment was not substantiated with sufficient evidence, leading to the confirmation of conviction.Issue 2: Burden of proof on accused to disprove initial presumption under Sections 118 and 139 of the NI Act:The judgment underscores the legal principles regarding the burden of proof in cases under Section 138 of the NI Act. It explains that once the execution of a negotiable instrument is proven, presumptions under Sections 118 and 139 come into play, shifting the burden to the accused to disprove the existence of debt or liability. The accused's defense of repayment was deemed insufficient, and the court held that the burden was not discharged effectively. The judgment emphasizes the importance of adducing credible evidence to rebut the statutory presumptions.Issue 3: Evaluation of evidence and statutory notices:The judgment discusses the evaluation of evidence, particularly the examination of witnesses and the contents of statutory notices. It highlights the importance of disclosing material facts in statutory notices and the need for clarity in transactions. The court rejected the argument that details of the cheques and transactions were not adequately mentioned in the notice, emphasizing that the accused had replied to the notice with full knowledge of the transaction details. The judgment emphasizes the significance of clear communication in legal proceedings.Issue 4: Applicability of legal precedents in determining liability:The judgment references legal precedents such as Divakaran v. State of Kerala and Bir Singh v. Mukesh Kumar to establish the legal framework for cases under Section 138 of the NI Act. It clarifies that the issuance of a blank signed cheque can still attract the presumption under Section 139, emphasizing the need for evidence to prove non-existence of debt or liability. The court's reliance on established legal principles showcases the importance of precedent in determining liability in such cases.Issue 5: Modification of sentence in light of case circumstances:The judgment addresses the question of sentencing in light of the case's circumstances. Considering the prolonged duration of the case and the absence of mandatory jail sentence under Section 138 of the NI Act, the court modifies the sentence. The accused is directed to pay a fine and given time due to the Covid-19 pandemic situation. The judgment reflects the court's consideration of case specifics and legal provisions in determining an appropriate sentence modification.This comprehensive analysis of the judgment provides insights into the legal reasoning, evidentiary considerations, burden of proof, and sentencing aspects involved in the case under review.