2024 (6) TMI 840 - HC - Indian Laws

Accused fails to rebut statutory presumption in Rs 5 lakh cheque bounce case under Section 138

The Gauhati HC dismissed a revision petition in a cheque dishonour case under Section 138 of the N.I. Act. The accused issued a cheque for Rs. 5,00,000/- ... Presumption under Sections 118 and 139 of the Negotiable Instruments Act - rebuttable reverse onus - legally enforceable debt or liability in proceedings under Section 138 - service of statutory demand notice by registered post and presumption of service - stop payment instruction and its evidentiary effect - exercise of court's power under Section 311 Cr.P.C. - concurrent findings of fact and interference by revisional jurisdictionPresumption under Sections 118 and 139 of the Negotiable Instruments Act - rebuttable reverse onus - legally enforceable debt or liability in proceedings under Section 138 - Validity of conviction under Section 138 of the Negotiable Instruments Act based on admitted cheque and statutory presumptions - HELD THAT: - The courts below found that the cheque was issued by the petitioner in discharge of liability and was dishonoured for insufficiency of funds. As the petitioner did not dispute the cheque or his signature, the trial and first appellate courts drew the statutory presumptions under Sections 118 and 139 of the NI Act. The High Court applied the settled principle that the presumption is rebuttable and governed by preponderance of probabilities (Rangappa and subsequent authorities), but found that the petitioner failed to raise a probable defence on the record. The petitioner neither entered the witness box nor produced material to show existence of no legally enforceable debt or sufficient funds at presentation. In these circumstances the courts rightly sustained the conviction under Section 138. [Paras 14, 15, 17, 24, 34]Findings of the courts below on statutory presumption and consequent conviction under Section 138 are sustainable; conviction upheld.Stop payment instruction and its evidentiary effect - presumption under Sections 118 and 139 of the Negotiable Instruments Act - Sufficiency of the petitioner's claim that he stopped payment because the cheque was lost - HELD THAT: - The petitioner pleaded loss of cheque and production of a stop payment instruction; the bank witness (D.W.1) could not produce the original stop payment letter and the system record indicated low balance. The courts found non production of the instruction and absence of explanation for the delay in informing the bank (cheque dated 12.09.2009; stop payment claimed on 24.02.2010), and noted no police report or evidence supporting loss. On these facts the claim of stop payment/loss did not rebut the presumption and was disbelieved. Reliance on precedents (Medchl, K. Bhaskaran) led to the conclusion that the accused failed to show sufficient funds or valid reason for stop payment. [Paras 19, 20, 21, 22, 23]Petitioner's plea of loss/stop payment remained unsubstantiated and did not rebut the statutory presumption; defence rejected.Service of statutory demand notice by registered post and presumption of service - Validity of service of the statutory demand notice where A/D card shows receipt by a person named Supriti Debnath - HELD THAT: - The A/D card showed delivery to Supriti Debnath; the trial court relied on the principle in C.C. Alavi Haji and K. Bhaskaran to draw presumption that the notice was served when correctly addressed and dispatched by registered post. The petitioner did not suggest in cross examination that Supriti was unrelated nor adduce evidence to rebut service; though a two Judge decision (M.D. Thomas) was cited, the High Court preferred the three Judge precedent (C.C. Alavi Haji). The petitioner had also, in answers under Section 313 Cr.P.C., admitted receipt of the notice before later denying it. [Paras 25, 26, 27, 29]Service of the demand notice is to be presumed and was properly held to be valid by the courts below.Exercise of court's power under Section 311 Cr.P.C. - concurrent findings of fact and interference by revisional jurisdiction - Whether courts below should have suo motu invoked Section 311 Cr.P.C. to summon or examine additional witnesses in favour of the petitioner - HELD THAT: - The High Court held that the primary burden to rebut statutory presumption lay on the petitioner; he did not seek production of additional witnesses or file any petition under Section 311 before the trial court. Invocation of Section 311 is discretionary and to be exercised only for strong and valid reasons; absent any request or showing that the petitioner could not reasonably have adduced evidence himself, there was no basis for the court to invoke Section 311 suo motu. Reliance on authorities emphasising caution in exercising Section 311 led to rejection of this contention. [Paras 30, 31, 32, 33]No fault in courts below for not invoking Section 311 suo motu; petitioner's contention rejected.Concurrent findings of fact and interference by revisional jurisdiction - Interference with concurrent findings of fact recorded by trial and first appellate courts - HELD THAT: - The High Court noted concurrent findings on evidence and credibility by the trial and first appellate courts. Absent demonstration of gross illegality, perversity or misapplication of law, concurrent factual findings do not warrant interference in revision. The High Court examined the record and found no such illegality or infirmity requiring upsetting the conclusions reached below. [Paras 6, 34, 35]Concurrent findings of the courts below are sustained; revisional interference is unwarranted.Final Conclusion: Revision petition dismissed as devoid of merit; impugned convictions and sentences under Section 138 of the Negotiable Instruments Act and the appellate order are upheld; records to be sent down and parties shall bear their own costs. Issues Involved:1. Legality, propriety, and correctness of the Judgment and Order dated 27.04.2018.2. Service of legal notice.3. Existence of legally enforceable liability.4. Invocation of jurisdiction u/s 311 of the Cr.P.C.5. Presumption under Sections 118 and 139 of the N.I. Act.Summary:Issue 1: Legality, propriety, and correctness of the Judgment and Order dated 27.04.2018The petitioner challenged the judgment and order dated 27.04.2018 passed by the Additional Sessions Judge, Cachar, Silchar, which upheld the judgment of the Additional Chief Judicial Magistrate convicting the petitioner u/s 138 of the Negotiable Instruments Act, 1881. The petitioner was sentenced to simple imprisonment for one year and to pay Rs. 7,00,000/- to the complainant.Issue 2: Service of legal noticeThe petitioner argued that the legal notice was not served upon him as it was received by one Supriti Debnath, whose relationship with the petitioner was not established. The court referred to the decision in *C.C. Alavi Haji vs. Palapetty Muhammed & Anr.*, stating that when a notice is sent by registered post with the correct address, it is presumed to be served unless proven otherwise. The court found that the notice was properly addressed and presumed to be served.Issue 3: Existence of legally enforceable liabilityThe petitioner contended that the complainant failed to establish any legally enforceable liability. The court noted the statutory presumption u/s 118 and 139 of the N.I. Act, which presumes that the cheque was issued for discharge of debt or liability. The court found that the petitioner did not rebut this presumption and failed to provide evidence supporting his claim that the cheque was lost and a stop payment instruction was issued.Issue 4: Invocation of jurisdiction u/s 311 of the Cr.P.C.The petitioner argued that the trial court failed to invoke its jurisdiction u/s 311 of the Cr.P.C. to examine certain witnesses. The court held that it was the petitioner's primary duty to rebut the statutory presumption and that there was no valid reason shown for the court to invoke this discretionary power.Issue 5: Presumption under Sections 118 and 139 of the N.I. ActThe court reiterated the presumption under Sections 118 and 139 of the N.I. Act, which places the burden on the accused to prove that the cheque was not issued for any debt or liability. The petitioner failed to rebut this presumption, and the court found no fault with the findings of the trial court and the first appellate court.Conclusion:The court dismissed the revision petition, finding no merit in the petitioner's arguments and upheld the judgments and orders of the lower courts. The petitioner was found guilty u/s 138 of the N.I. Act, and the statutory presumption in favor of the complainant remained unrebutted.