2021 (12) TMI 354 - HC - Indian Laws

Application to Quash Criminal Proceedings Denied Due to Lack of Evidence

The High Court dismissed the application to quash the criminal proceedings, emphasizing that disputed factual issues must be decided by the trial court. ... Dishonor of Cheque - insufficiency of funds - existence of legally enforceable debt or not - rebuttal of presumption - HELD THAT:- It appears that a complaint filed under Section 138 of the N.I.Act by the respondent No.2 was registered as Criminal Case No. 2208 of 2017. That, process was issued under section 204 of the Code of Criminal Procedure by the learned trial Court, as per order passed below Exh. 1 on 15th September, 2017. It is not in dispute that the cheque was issued by the present applicant under his signature in favour of respondent No.2 on 24th April, 2017 for the amount of ₹ 60,000/- which is produced at page 19. It was not in dispute that the cheque was returned back by the bank authority on account of “insufficient fund” by return memo dated 10th July, 2017. Once, the accused has admitted the issuance of the cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the N.I.Act. However, such a presumption is rebuttable in nature and the accused-applicant is required to lead the evidence to rebut such presumption. The applicant was required to lead evidence that the entire amount due and payable to the complainant was paid. Considering the fact that the applicant-accused has admitted the issuance of the cheque and his signature on the cheque and that cheque in question was issued for security purpose as well as the amount was paid by him. There is a presumption under Section 139 of the N.I.Act that there exists a legally enforceable debt or liability. Of course, such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, two receipts are produced by the accused applicant which requires to be proved by him with cogent evidence in trial. The story put forward by the applicant-accused that the cheque was given by way of security is not believable at this juncture to rebut the presumption. This application deserves to be dismissed and dismissed. Issues Involved:1. Issuance of process under Section 204 of the Code of Criminal Procedure.2. Alleged misuse of the cheque by the complainant.3. Existence of a legally enforceable debt or liability under Section 138 and Section 139 of the Negotiable Instruments Act.4. Rebuttal of presumption under Section 139 of the Negotiable Instruments Act by the accused.5. Jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure to quash the criminal proceedings.Issue-wise Detailed Analysis:1. Issuance of process under Section 204 of the Code of Criminal Procedure:The complaint was initially registered as Criminal Inquiry No. 182 of 2017 and later as Criminal Case No. 2208 of 2017. The trial court issued process under Section 204 of the Code of Criminal Procedure on 15th September 2017, directing the accused to appear. The accused challenged the issuance of process and subsequent proceedings, seeking to quash the complaint.2. Alleged misuse of the cheque by the complainant:The accused claimed that the cheque in question, amounting to Rs. 60,000, was misused by the complainant to extract more money, despite the accused having already paid the demanded amount. The accused argued that the cheque was issued only for security purposes and not for any outstanding debt. The complainant denied these claims, asserting that the cheque was issued for a legitimate business transaction.3. Existence of a legally enforceable debt or liability under Section 138 and Section 139 of the Negotiable Instruments Act:The court noted that once the accused admitted issuing the cheque, a presumption of a legally enforceable debt or liability arises under Section 139 of the Negotiable Instruments Act. This presumption, however, is rebuttable. The court referred to several judgments, including K.N. Beena vs. Muniyappan and Rangappa vs. Sri Mohan, to emphasize that the burden of proving the cheque was not issued for a debt or liability lies on the accused.4. Rebuttal of presumption under Section 139 of the Negotiable Instruments Act by the accused:The accused presented receipts claiming that the amount of Rs. 60,000 was paid in cash in two installments, and the cheque was issued for security purposes. The court held that these factual aspects require evidence and cannot be decided in a quashing petition under Section 482 of the Code of Criminal Procedure. The court emphasized that the accused must lead evidence to rebut the presumption of a legally enforceable debt or liability.5. Jurisdiction of the High Court under Section 482 of the Code of Criminal Procedure to quash the criminal proceedings:The court reiterated that in a petition under Section 482 of the Code of Criminal Procedure, it cannot adjudicate disputed questions of fact. The court referred to previous judgments, including HMT Watches Ltd. vs. M.A. Abida, which held that whether a cheque was given as security or for an outstanding liability is a question of fact to be determined by the trial court. The High Court should not quash proceedings based on disputed factual aspects.Conclusion:The court dismissed the application to quash the criminal proceedings, stating that the accused must rebut the presumption of a legally enforceable debt or liability through evidence in the trial court. The court discharged the rule and vacated any interim relief granted. The criminal case will proceed before the learned 3rd Additional Civil Judge and Judicial Magistrate First Class, Godhara.