2022 (8) TMI 821 - HC - Indian Laws

High Court Overturns Sessions Court, Affirms Conviction under Section 139 of N.I. Act

M/s. Sai Auto Agencies, Versus Hemant Ambadas Bajad,

M/s. Sai Auto Agencies, Versus Hemant Ambadas Bajad, - TMI Issues Involved:1. Whether the complainant was entitled to present the cheque despite recovering Rs.3,90,000/- prior to the issuance of the cheque.2. Whether the presumption under Section 139 of the N.I. Act was rebutted.3. Whether the cheque was issued for a legal debt or liability.4. Whether the learned Sessions Court was justified in acquitting the accused.5. The appropriate course of action when part payment is received before presenting the cheque.Issue-Wise Detailed Analysis:1. Entitlement to Present the Cheque:The learned Sessions Court set aside the conviction on the ground that the complainant recovered Rs.3,90,000/- before the issuance of the cheque, thus he was not entitled to present it. However, the complainant argued that there was no evidence proving that the recovery was prior to the cheque issuance. The court found that no material evidence was presented by the accused to establish the date of recovery, and the complainant had disclosed the recovery of Rs.40,500/- in the demand notice, indicating no suppression.2. Presumption under Section 139 of the N.I. Act:The presumption under Section 139 of the N.I. Act states that the cheque was issued for consideration and the holder received it in discharge of an existing debt. The accused admitted to issuing the cheque and his signature on it, invoking the presumption. The court held that the accused failed to rebut this presumption either through cross-examination or by leading defense evidence.3. Cheque Issued for Legal Debt or Liability:The complainant provided evidence, including a letter dated 15.06.2011 (Exh.42), where the accused admitted liability and issued the cheque for Rs.14,72,799/-. The court found that the complainant's evidence was credible, and the accused's cross-examination did not effectively challenge the validity of Exh.42. Thus, the cheque was indeed issued for a legal debt.4. Justification of Acquittal by the Sessions Court:The Sessions Court acquitted the accused based on the alleged prior recovery of Rs.3,90,000/-. However, the High Court found no evidence supporting this recovery before the cheque issuance. The court emphasized that the complainant's conduct was transparent, as he disclosed the recovery of Rs.40,500/- in the notice of demand. The High Court concluded that the Sessions Court's inference was unjustified and without basis.5. Course of Action for Part Payment:The court discussed the appropriate actions when part payment is received before presenting the cheque. It suggested making an 'indorsement' on the cheque for the balance amount and presenting it for the lesser amount. This ensures the cheque remains valid for the balance due. The court referenced Section 56 of the N.I. Act, which allows for such indorsement and negotiation for the balance amount.Conclusion:The High Court quashed the Sessions Court's judgment and restored the Chief Judicial Magistrate's conviction. The court held that the complainant was entitled to present the cheque, the presumption under Section 139 was not rebutted, and the cheque was issued for a legal debt. The court provided guidance on handling part payments, emphasizing indorsement and negotiation for the balance amount. The appeal was allowed, and the judgment of the Chief Judicial Magistrate was enforced.