2022 (2) TMI 850 - HC - Indian Laws

High Court overturns acquittal in check bounce case, emphasizes burden of proof rules

Sri Pradip Kumar Basu Versus City Link Commotrade Pvt. Ltd. & Anr.

The Calcutta High Court allowed the appeal against the acquittal of the accused company and its Director under Sections 138/141 of the Negotiable ... Dishonor of Cheque - insufficient funds - acquittal of accused - failure to appreciate the evidence in its proper perspective - burden to proof - Section 138/141 of the Negotiable Instruments Act - HELD THAT:- It appears that the learned Magistrate had failed to appreciate the evidence and the presumption under Section 139 of the Negotiable Instruments Act, that the onus lies upon the accused person, who issued the cheques. Therefore, a person who has undisputedly issued the cheques cannot shirk the responsibility when they are dishonoured unless he proves that such cheques were not for discharge of debt or other liability in whole or in part in favour of the payee. The Ld. Magistrate has misplaced the burden of proof. The complaint case has been lodged within the statutory period laid down in Section 142(b) of the Negotiable Instruments Act. As such, the decision arrived at, acquitting the appellant is not legally tenable. The impugned judgment and order is therefore, set aside. The case is remitted to the 8th Court of Metropolitan Magistrate, Calcutta for summoning the complainant and the accused respondent and after giving them an opportunity of hearing pass a fresh judgment in accordance with law on the evidence already on record, preferably within three months from receipt of this order. Appeal allowed. Issues:Appeal against acquittal under Sections 138/141 of the Negotiable Instruments Act - Failure to establish liability of accused company - Burden of proof under Section 139 of the Act - Legal tenability of acquittal - Misplacement of burden of proof by the Magistrate - Statutory period for lodging complaint case.Analysis:The appeal before the Calcutta High Court pertained to an acquittal order passed by the Metropolitan Magistrate in a case under Sections 138/141 of the Negotiable Instruments Act. The complainant, who is the Executive Director of a group of companies, alleged that two cheques issued by the respondent company were dishonored for insufficient funds. The complainant filed a case within the statutory period, and evidence was presented including examination of witnesses and documentary evidence.The Magistrate acquitted the accused company and its Director, stating that the complainant failed to establish the liability of the accused towards him and the connection between the companies. The appeal challenged this decision, arguing that the Magistrate misinterpreted the evidence and the burden of proof under Section 139 of the Act. The appellant contended that the accused admitted to the dishonor of cheques and failed to rebut the presumption under Section 139.The High Court, after reviewing the evidence and legal provisions, found that the Magistrate had erred in misplacing the burden of proof. The Court emphasized that the burden lies upon the accused to prove that the cheques were not issued for a valid debt or liability. As the complaint was filed within the statutory period, the acquittal was deemed legally untenable. Consequently, the High Court set aside the impugned judgment and remitted the case back to the Magistrate for a fresh judgment within three months.In conclusion, the appeal was allowed, and all pending applications were disposed of. The High Court directed the Lower Court to summon both parties, provide an opportunity for hearing, and pass a new judgment based on the existing evidence. The judgment was to be in accordance with the law, ensuring the proper application of burden of proof principles under the Negotiable Instruments Act. The Lower Court was instructed to comply with the High Court's order promptly.