2022 (7) TMI 40 - HC - Indian Laws

Court upholds convictions for dishonored cheques, orders transmission of orders to lower courts.

M/s MDN Enterprises Versus Lokesh E. And M/s MDN Enterprises Versus D.T. Patel

The High Court dismissed both Criminal Revision Petition No. 219/2018 and Criminal Revision Petition No. 220/2018, upholding the judgments of conviction ... Dishonor of Cheque - legally enforceable debt - rebuttal of presumption - acquittal of the accused - section 138 of NI Act - HELD THAT:- Admittedly, the accused has not repaid the alleged loan amount to the complainant even after the issuance of notice to him. Thus, the presumption about existence of legally enforceable debt form in favour of the complainant in both the cases. However, the said presumption is rebuttable - In order to rebut the presumption, the complainant has taken a defence of general denial of the loan transaction in C.C. No. 1051/2011 and a common defence that the cheques in question were given to the complainant Sri. D.T. Patel, his brother by name Sri. Shanthi Bhai and the accused together as a security. However, those cheques have been misused by them. Naturally, the complainants in both the cases have denied the suggestions made to that effect from the accused side, in their cross-examinations. There is no explanation available anywhere as to why should the accused give blank cheques to all the three persons i.e., both the complainants herein and one Sri. Shanthi Bhai when even according to accused, the alleged transaction of a sum of Rs. 50,000/- was only between himself and said Sri. D.T. Patel. Therefore, the defence of the accused creates a doubt in the mind of the court. The accused could not able to rebut the presumption about the existence of legally enforceable debt formed in favour of the complainants in both the cases under Section 139 of N.I. Act. Thus, both the Trial Court as well as the First Appellate Court since after proper appreciation of evidence placed before them, have rightly come to a conclusion holding the accused guilty of the alleged offence in both the matters and have sentenced him proportionate to the proven guilt, there are no reason to interfere in the impugned judgments in both the matters. The Criminal Revision Petition is dismissed. Issues Involved:1. Whether the judgment of conviction and order of sentence in Criminal Revision Petition No. 219/2018 is perverse, illegal, or erroneous.2. Whether the judgment of conviction and order of sentence in Criminal Revision Petition No. 220/2018 is perverse, illegal, or erroneous.Issue-wise Detailed Analysis:Issue 1: Judgment of Conviction and Order of Sentence in Criminal Revision Petition No. 219/2018The petitioner, a proprietorship concern represented by its proprietor, was accused in C.C. No. 1051/2011 for the offence punishable under Section 138 of the Negotiable Instruments Act (N.I. Act). The complainant alleged that the accused availed a loan of Rs. 2,50,000/- for business improvement and issued a cheque for repayment, which was dishonored with the memo 'Account Closed.' Despite notice, the accused did not repay, leading to the criminal case.The Trial Court convicted the accused, and the conviction was upheld by the Sessions Judge's Court. The accused filed a revision petition arguing that there was no loan transaction, the notice was not served due to signature variation, and the cheque was issued as security, not for repayment. The complainant countered that notices were sent to the correct address, and the accused did not take steps to recover the cheque, indicating it was issued for a legally enforceable debt.The High Court noted that the cheques were drawn by the accused, returned due to account closure, and notices were sent to the correct address. The accused's contention of signature variation on the acknowledgment was dismissed as the notices were sent to the correct address and deemed served. The presumption of legally enforceable debt was not rebutted by the accused, who failed to produce evidence or take steps to recover the cheque. Thus, the High Court found no reason to interfere with the conviction and dismissed the revision petition.Issue 2: Judgment of Conviction and Order of Sentence in Criminal Revision Petition No. 220/2018In C.C. No. 1049/2011, the accused was alleged to have taken a loan of Rs. 2,00,000/- and issued a cheque for repayment, which was dishonored with the memo 'Account Closed.' Despite notice, the accused did not repay, leading to the criminal case.The Trial Court convicted the accused, and the conviction was upheld by the Sessions Judge's Court. The accused filed a revision petition arguing that the cheque was issued as security, not for repayment, and no notice was served. The complainant countered that notices were sent to the correct address, and the accused did not take steps to recover the cheque, indicating it was issued for a legally enforceable debt.The High Court noted that the cheques were drawn by the accused, returned due to account closure, and notices were sent to the correct address. The accused's contention of signature variation on the acknowledgment was dismissed as the notices were sent to the correct address and deemed served. The presumption of legally enforceable debt was not rebutted by the accused, who failed to produce evidence or take steps to recover the cheque. Thus, the High Court found no reason to interfere with the conviction and dismissed the revision petition.Conclusion:The High Court dismissed both Criminal Revision Petition No. 219/2018 and Criminal Revision Petition No. 220/2018, finding no merit in the arguments presented by the accused. The judgments of conviction and orders of sentence by the Trial Court and the Sessions Judge's Court were upheld. The Registry was directed to transmit a copy of the order to both the Trial Court and the Sessions Judge's Court along with their respective records.