2023 (11) TMI 1066 - HC - Indian Laws

Cheque dishonour conviction upheld despite account seizure as accused failed to prove sufficient funds under Section 138

Harpal Singh Versus State of Haryana and another

Punjab & Haryana HC dismissed revision petitions challenging conviction under Section 138 of Negotiable Instruments Act for cheque dishonour due to ... Dishonour of Cheque - Oreder of conviction and sentence of accused - insufficient funds - seizure of account - payment stopped by Court order - payment stopped by drawer - evidence led by the petitioner-accused regarding the reason behind the dishonour of cheque or not - rebuttal of presumption - seeking dismissal of all the revision petitions - HELD THAT:- It is in the light of the legal position that it is required to be seen that whether accused has been able to probabilise his defence. Here itself, it may be noted that the accused is not required to prove his defence on the standard of proof ‘beyond reasonable doubt’ and rather, he is simply required to probabilise his defence. The presumption under Section 139 of the Act can be rebutted even by evidence led by the complainant; and it is not required for the defence to lead evidence to rebut presumption, as has been held in PAWAN KUMAR VERSUS SUNIL KUMAR [2016 (9) TMI 1663 - PUNJAB AND HARYANA HIGH COURT] by this court and also by the Hon’ble Supreme Court in SHIV KUMAR VERSUS RAMAVTAR AGARWAL [2020 (2) TMI 1584 - SUPREME COURT]. Contention of ld. counsel for the petitioner is that in the present case also, the cheques in question had been given to the complainant in January/February 2015 as per his Statement. The cheques were payable during June to September 2015, but before the cheques became payable, the account of the petitioner was seized on 10.03.2015 as per Ex.CW2/3. As per the contention, petitioner was left with no control over his bank account either to deposit the funds or to make arrangement with the bank by entering into any agreement with the Bank and that act of attachment of the bank account was not the voluntary act on the part of the petitioner and so, he cannot be held liable - Neither at the time of handing over the cheques nor at the time of seizure nor at the time when the payments became due under the cheque, the petitioner had the sufficient amount in his account. It is not the defence of the petitioner that he wanted to make arrangement with his bank so as to honour the cheques. Thus, it is held that simply because drawer of the cheque is unable to pay the cheque amount, due to the fact that account stood freezed cannot be the reason to exonerate the liability of the accused-petitioner. In present case, as per trial court record, the accused was produced in the Court of ld. JMIC, Gurgaon for the first time on 23.12.2015 pursuant to the production warrants issued for him. There is nothing on record to suggest that at any point of time, petitioner-accused ever pleaded before the Court that though he had not received the legal notice, but he was ready to make payment of the cheque amount or that he be allowed to make necessary arrangement with the Bank so as to make payment of the cheque amount. No attempt appears to have been made on the part of the accused to move appropriate application before the concerned Court for getting his account released. In fact, the seizure of the account by the Court in the criminal case came as a boon for the petitioner because he factually did not have any amount in his account at any point of time so as to honour the cheque and on account of seizure of the account, he got the excuse to plead before the Court that his account has been seized. The last contention raised on behalf of the petitioner is that cheques had been misused as these were issued as a security cheque. The contention is again without any merit as it has been specifically testified by CW1 – complainant that all the particulars in the cheques were filled in by the accused himself. Even if it is presumed for the sake of arguments that cheques were issued as a security, the dishonour thereof will still attract Section 138 of the NI Act - In SHALINI ENTERPRISE AND ORS. VERSUS INDIABULLS FINANCIAL SERVICES LTD. [2012 (9) TMI 1213 - PUNJAB AND HARYANA HIGH COURT], similar plea of security cheque was taken. It was held by this Court held that the argument of the learned counsel for the petitioner that on dishonouring of a security cheque no offence punishable under section 138 of the Negotiable Instruments Act is made out. This court finds no merit in any of these revisions. Same are dismissed. Issues Involved:1. Conviction under Section 138 of the Negotiable Instruments Act (NI Act).2. Freezing of the accused's bank account.3. Non-receipt of legal notice by the accused.4. Allegation of misuse of security cheques.Summary:Conviction under Section 138 of the NI Act:The accused Harpal Singh, as director of M/s Pal Infrastructure Pvt. Ltd., was convicted under Section 138 of the NI Act for the dishonour of cheques issued to the complainant, Dharam Singh, and sentenced to imprisonment and compensation. The appeals against the conviction were dismissed, but the sentence was modified, removing the default imprisonment clause while maintaining the compensation.Freezing of the Accused's Bank Account:The accused argued that his bank account was already frozen by a court order at the time of cheque presentation, thus the basic ingredients of Section 138 of the NI Act were not met. However, the court held that the freezing of the account did not absolve the accused of liability under Section 138, as the account never had sufficient funds to honour the cheques, even before the freezing order.Non-receipt of Legal Notice by the Accused:The accused contended that he did not receive the legal notice as he was in judicial custody. The court held that the presumption of service under Section 27 of the General Clauses Act applied, and the accused had the opportunity to pay the cheque amount within 15 days of receiving the summons but failed to do so.Allegation of Misuse of Security Cheques:The accused claimed that the cheques were issued as security and were misused by the complainant. The court rejected this defense, stating that even if the cheques were issued as security, their dishonour would still attract Section 138 of the NI Act. The court emphasized that the accused admitted to signing the cheques, invoking the presumptions under Sections 118 and 139 of the NI Act, which were not effectively rebutted by the accused.Conclusion:The court dismissed all the revision petitions, upholding the conviction and sentence under Section 138 of the NI Act, and rejected the defenses related to the freezing of the bank account, non-receipt of legal notice, and misuse of security cheques.