2023 (12) TMI 947 - HC - Indian Laws

Dishonored cheque case conviction restored under Section 138 after acquittal overturned on appeal

HC reversed trial court's acquittal in dishonored cheque case under Section 138 Negotiable Instruments Act. Appellant proved accused issued cheque ... Dishonour of Cheque - Insufficient Funds - legality of judgment of acquittal - existence of legally enforceable debt or not - accused had issued the cheque in discharge of the liability of Surinder Singh and the learned Trial Court erred in ignoring this position - HELD THAT:- The absence of any agreement will not make the case of the complainant doubtful - the cross-examination of the complainant or his witness was insufficient to rebut the presumption and it was duly proved on record that the accused had issued a cheque in discharge of his liability. Learned Trial Court erred in holding otherwise. Hem Chand (CW-1) stated that the cheque(Exhibit C-1) was deposited with the bank. The cheque was dishonoured due to insufficient funds. He admitted in his cross-examination that the account of the accused was closed. It is apparent from the statement of this witness that the cheque was dishonoured due to insufficient funds, was not challenged in the cross-examination and has to be accepted as correct. Testimony of this witness will not make the case of the complainant suspect because the cheque was drawn on Oriental Bank of Commerce and the official of the said bank specifically stated that the cheque was dishonoured due to insufficient funds. Therefore, the next requirement that a cheque was dishonoured due to insufficient funds has been duly established - The complainant stated that he issued the legal notice (Ext. C-3) asking the accused to make the payment within 15 days. Postal receipts (C-4 and C-5) and acknowledgement (C-6) corroborates his testimony. The acknowledgement shows that the registered cover was returned after delivery; therefore, it is duly proved that legal notice was duly served. It was duly proved that the cheque was issued in discharge of the legal liability, which was dishonoured due to insufficient funds and the accused had not made the payment despite receipt of a valid notice of demand - the complainant has proved all the ingredients for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act. The learned Trial Court did not consider the presumption attached to the cheque and the suggestions made to the complainant and his witnesses. It had taken a view which could not have been taken by any reasonable person. The judgment of the learned Trial Court proceeds in ignorance of the settled position of law and the same is liable to be interfered with even in an appeal against the acquittal. The present appeal is allowed. Issues Involved:1. Whether the accused issued a cheque in discharge of a legally enforceable debt or liability.2. Whether the cheque was dishonoured due to insufficient funds.3. Whether the legal notice was duly served to the accused.4. Whether the accused rebutted the presumption under Section 139 of the Negotiable Instruments Act.Issue-wise Summary:1. Issuance of Cheque in Discharge of Legally Enforceable Debt:The complainant alleged that the accused issued a cheque for Rs. 46,000 in favor of the complainant. The accused admitted issuing the cheque but denied any liability. The trial court held that no agreement was proved to establish that the accused was to pay some amount to the complainant's father. The High Court, however, emphasized the presumption under Section 139 of the Negotiable Instruments Act, which mandates that once the signature on the cheque is admitted, it is presumed to be issued in discharge of a debt or liability. The accused failed to provide any evidence to rebut this presumption, and the cross-examination of the complainant's witnesses did not sufficiently challenge this presumption.2. Dishonour of Cheque Due to Insufficient Funds:The cheque was deposited but dishonoured with the endorsement 'Insufficient Funds.' The trial court's finding that the cheque was dishonoured due to insufficient funds was not challenged in the cross-examination, thus it was accepted as correct. The High Court reiterated that the testimony of the bank official confirmed the dishonour due to insufficient funds.3. Service of Legal Notice:The complainant issued a legal notice demanding payment within 15 days, which was received by the accused. The High Court found that the legal notice was duly served, supported by postal receipts and acknowledgment. The accused did not make the payment within the stipulated time, fulfilling the requirement under Section 138 of the Negotiable Instruments Act.4. Rebuttal of Presumption Under Section 139:The accused did not lead any evidence to rebut the presumption under Section 139. The trial court held that the complainant's version was doubtful due to discrepancies in the amount mentioned by the complainant's father and the complainant. However, the High Court found that the cross-examination of the complainant's witnesses was insufficient to rebut the presumption. The High Court emphasized that mere denial in the statement under Section 313 Cr.P.C. is not sufficient to rebut the presumption. The High Court concluded that the accused had issued the cheque in discharge of his liability, and the trial court erred in holding otherwise.Conclusion:The High Court allowed the appeal, set aside the trial court's judgment, and convicted the accused for the offence punishable under Section 138 of the Negotiable Instruments Act. The accused was ordered to be produced for hearing on the quantum of sentence.