2022 (4) TMI 79 - HC - Indian Laws

High Court reinstates conviction under Section 138 NI Act, imposes fine or imprisonment.

Sri Apu Ranjan Debnath, Versus Sri Dipankar Majumder, The State of Tripura

Sri Apu Ranjan Debnath, Versus Sri Dipankar Majumder, The State of Tripura - TMI Issues Involved:1. Whether the accused issued the cheque in discharge of his debt and liability.2. Whether the cheque was dishonoured due to insufficient funds.3. Whether the accused failed to pay the amount after receiving the demand notice.Issue-wise Detailed Analysis:1. Issuance of Cheque in Discharge of Debt and Liability:The trial court found that the accused issued a cheque for Rs. 3,00,000 to the complainant to discharge his debt and liability. The court relied on the Supreme Court's decision in *M/S LAXMI DYECHEM vs. STATE OF GUJARAT & ORS*, which held that dishonour of a cheque due to mismatched signatures or other reasons falls under Section 138 of the NI Act. The complainant successfully proved that the cheque was issued to indemnify the accused’s debts, leading to the trial court deciding this point in favor of the complainant.2. Dishonour of Cheque Due to Insufficient Funds:The trial court observed that the bank return memo (Ext.3) bore the official mark and signature denoting dishonour due to insufficient funds in the accused's account. Under Section 146 of the NI Act, this presumption of dishonour stands unless disproved. The accused failed to present any evidence to rebut this presumption. Consequently, the trial court affirmed that the cheque was dishonoured due to insufficient funds and decided this point in favor of the complainant.3. Failure to Pay After Receiving Demand Notice:The trial court noted that the complainant issued a demand notice on 12.06.2015, which the accused received on 13.06.2015. The accused neither returned the money nor arranged sufficient funds to honor the cheque. During cross-examination, the defense did not challenge the receipt of the demand notice or suggest that the accused paid the money after receiving it. Thus, the trial court concluded that the accused failed to pay the amount after receiving the demand notice and decided this point in favor of the complainant.Lower Appellate Court’s Observations:The lower appellate court overturned the trial court's decision, stating that the complainant failed to prove the existence of a legally enforceable debt. It emphasized that the presumption under Section 139 of the NI Act requires a factual basis, which the complainant failed to establish. The court highlighted that the complainant did not provide essential details like the date of payment, existence of an agreement, or source of funds. The appellate court found these omissions sufficient to rebut the presumption of debt and acquitted the accused.High Court’s Final Judgment:The High Court reviewed the arguments and evidence, noting that the basic transaction facts were undisputed. The court referenced several precedents, including *Rangappa vs. Sri Mohan*, which held that the presumption under Section 139 is rebuttable and the accused must provide a probable defense. The High Court found that the lower appellate court erred in its judgment by not considering the statutory presumption under Section 139 adequately. Consequently, the High Court set aside the lower appellate court’s decision, reinstated the trial court’s conviction, and sentenced the accused to pay a fine of Rs. 3,00,000 or face simple imprisonment for one year.Conclusion:The High Court allowed the criminal revision, setting aside the lower appellate court’s acquittal, and upheld the trial court’s conviction under Section 138 of the NI Act. The accused was sentenced to pay a fine of Rs. 3,00,000 in default of which he would undergo simple imprisonment for one year.