2022 (1) TMI 1170 - HC - Indian Laws

Appellant's appeal dismissed in cheque bounce case due to lack of evidence for firm proprietorship.

Shri Bagjedi Steel Traders Versus Utkarsh Sharma

The Court upheld the JMFC's acquittal of the respondent-accused under Section 138 of the NI Act. The appellant failed to establish sole proprietorship of ... Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - failure of producing documentary evidence - HELD THAT:- It is apparent that in case of failure of producing documentary evidence, it cannot be considered in respect of proprietor that he is the sole proprietor of Firm and on that basis, the complaint under Section 138 of the NI Act is not maintainable. No documentary evidence in respect of being a sole proprietor of the Firm on behalf of complainant-appellant has been produced before the Court and from the record, it reveals that the cheque in question has been issued in the name of complainant- Firm and the only bill Ex.P6 whose authenticity has been denied by the accused- respondent because it does not either bear the signature of complainant or accused. On that basis, no presumption can be drawn against the accused. As per the provisions of Section 138(b) of the NI Act, it is the statutory duty of the complainant that after dishonour of cheque, information regarding dishonour/return of cheque should be furnished by giving a written notice to the accused within a period of thirty days. In the present matter, although a notice was issued by the complainant but it has been reflected from the impugned judgment that consideration amount of ₹ 50,000/- has been shown as due against the respondent- accused which is under suspicion and no evidence in this regard has been produced before the Court on the behalf of the complainant to establish his case beyond reasonable doubt. Therefore, the learned JMFC has rightly acquitted the respondent-accused of offence under Section 138 of the NI Act. Appeal dismissed. Issues:Challenge to judgment of acquittal under Section 138 of the Negotiable Instruments Act.Analysis:1. The appellant-complainant challenged the judgment of acquittal dated 12/01/2016 by the Court of JMFC, Shivpuri, under Section 138 of the NI Act. The respondent-accused borrowed cement from the appellant's shop and issued a cheque that was dishonored due to insufficient funds. Despite issuing a legal notice and the borrowed amount not being repaid, the accused was acquitted by the JMFC.2. The appellant argued that the judgment of the JMFC was unsustainable as the accused's cheque was dishonored, and the legal notice was duly served. The JMFC disregarded the bill presented by the appellant, claiming it lacked authenticity without signatures. The appellant contended that procedural defects should not override substantive rights, citing relevant Supreme Court judgments.3. The respondent's counsel supported the JMFC's judgment, asserting no errors were made in the acquittal. The court heard both parties and reviewed the documents and judgment on record.4. The court found that the appellant failed to provide documentary evidence establishing sole proprietorship of the firm, rendering the complaint under Section 138 of the NI Act unmaintainable. The only bill presented was denied authenticity by the accused due to lack of signatures, preventing any presumption against the accused. The court noted the statutory duty to inform the accused of cheque dishonor within 30 days, highlighting the lack of evidence to prove the due amount beyond reasonable doubt.5. Consequently, the JMFC's acquittal of the respondent-accused under Section 138 of the NI Act was upheld, as no interference was warranted. The appeal lacked merit and was dismissed.