2022 (2) TMI 133 - HC - Indian Laws

Conviction challenge under Section 138 dismissed, statutory presumption upheld, sentence reduced, assets released.

Sanjiv Kumar And Another Versus Haryana Financial Corporation And others

The challenge to the conviction under Section 138 of the Negotiable Instruments Act for dishonored cheques was dismissed. The court upheld the lower ... Dishonor of Cheque - misuse of cheque by appellant or not - legally enforceable debt or not - rebuttal of statutory presumption - section 138 of NI Act - HELD THAT:- There is no dispute with regard to the signatures found on the cheques and also their execution. Once the signature on the cheques and also the execution of the cheque are admitted, there is a statutory presumption that the cheques were issued for legally enforceable debt and the said presumption is a rebutted presumption. The petitioner has not rebutted the statutory presumption. Both the courts below have found the petitioner guilty for the offence under Section 138 of the NI Act. The judgments of the courts below are concurrent since the issuance of the cheques and also the signature found in the cheques are admitted and also the statutory presumption has not been rebutted by the petitioner. While exercising the revisional jurisdiction, this Court need not to sit in the armchair of the judgments of the courts below. It is enough to see as to whether there is any perversity in the orders of the courts below while appreciating evidence of finding regarding the facts. A substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. In this view of the matter, this Court is of the considered view that even in the absence of any formal letter of authority or power of attorney having been executed, a person by virtue of the office which he holds, could sign and verify the pleadings on behalf of the corporation. On reading of the entire material placed before this Court, this Court does not find any perversity in the judgments of both the courts below while appreciating evidence - taking into consideration the peculiar facts & circumstances of the case coupled with the fact that an amount of ₹ 10 lac had already been paid by the petitioner after dishonor of cheque(s) and an amount of ₹ 10 lac was deposited in the Treasury Account with State Bank of India, Treasury Branch, Mini Secretariat, Kaithal, vide order dated 25.09.2009 passed by this Court, receipt of which is annexed with the file as Annexure P-4; as also all assets of petitioner were sold by the respondent – Corporation resulting in realization of gross amount of ₹ 80.10 lac, taking a lenient view, period of sentence qua imprisonment of petitioner is reduced to the period already undergone by him, while maintaining the conviction. Application disposed off. Issues:Challenge to judgment of conviction under Section 138 of the Negotiable Instruments Act, 1881 (NI Act) for dishonored cheques.Detailed Analysis:1. Conviction under Section 138 of the NI Act:The petitioners challenged the judgment of conviction under Section 138 of the NI Act for dishonored cheques issued in favor of the complainant, a financial corporation. The courts below found the petitioners guilty based on evidence that the cheques were dishonored due to insufficient funds and legal notice was served but not honored by the petitioners. The courts held that the petitioners did not rebut the statutory presumption that the cheques were issued for a legally enforceable debt. The concurrent judgments of the lower courts were upheld, emphasizing that the courts need not reassess evidence unless there is perversity in the findings.2. Authority to File Complaint:The petitioners argued that the complaint was invalid as it was filed by an Assistant of the complainant corporation without formal authorization. However, the court cited precedent stating that procedural defects, like lack of formal authorization, should not defeat a just cause if the substantive right is not affected. The court held that the Assistant's position within the corporation allowed him to file the complaint, even without a formal letter of authority.3. Sentencing and Disposition:Considering the circumstances, including the death of one petitioner and another individual during the proceedings, the court reduced the sentence for the surviving petitioner who had already paid a significant amount and had assets sold by the complainant. The court reduced the imprisonment period to the time already served, maintaining the conviction. The court allowed the release of a deposited amount and granted the complainant liberty to seek compensation through appropriate legal means.In conclusion, the petition challenging the conviction under Section 138 of the NI Act for dishonored cheques was dismissed, upholding the lower courts' findings. The court emphasized the importance of substantive rights over procedural irregularities, and considering the circumstances, reduced the sentence for the surviving petitioner while allowing the release of a deposited amount and granting the complainant liberty to pursue compensation legally.