2024 (10) TMI 42 - HC - Indian Laws

SPA holder's testimony valid in Section 138 NI Act case, conviction upheld despite petitioner's challenge

Delhi HC dismissed revision petition challenging conviction under Section 138 NI Act for dishonoured cheque. Petitioner argued complainant failed to ... Dishonour of Cheque - legally recoverable debt or not - rebuttal of presumption - petitioner has been convicted and sentenced under Section 138 Negotiable Instruments Act, 1881 - HELD THAT:- The first ground which has been taken on behalf of the petitioners is that the complainant has failed to step into the witness box and only CW1 Sh. Ritin Behl the SPA holder, who has been examined and he had not personal knowledge of the facts involved in the present case. First and foremost, even though CW1 Sh. Ritin Behl had deposed on the basis of an SPA but it is a settled law that irrespective of the Special Power of Attorney in favour of the witness, he is a competent witness to depose about the facts which are in his knowledge. Furthermore, the entire case under Section 138 N.I. Act was based on the documents - it was for the petitioners to have led cogent evidence in their defence, which they have miserably failed to do. Once the signatures on the cheque were admitted, the presumption under Section 139 NI Act worked in favour of the complainant and the onus was on the petitioners/accused to prove that the cheques were not issued in discharge of the legally recoverable debt. However, neither the authenticity of the letter has been questioned in the cross-examination of CW1 nor is there any other cogent evidence brought to disprove that the cheque was not in discharge of any legally recoverable debt. The Petitioner has been rightly convicted and sentenced. The impugned judgment of learned ASJ dated 13.05.2024 does not deserve any interference as it suffers from no infirmity - the present Revision Petition is hereby dismissed. Issues:1. Challenge to conviction and sentence under Section 138 Negotiable Instruments Act, 1881.2. Defense raised regarding cheque issuance and liability.3. Examination of evidence and defense presented.4. Appeal against conviction and sentence modification.5. Competency of witness and authority to depose.6. Liability of directors in company for offense under Section 138 N.I. Act.7. Evidence regarding cheque issuance and rent liability.8. Presumption under Section 139 NI Act and burden of proof.Analysis:The judgment involves a Criminal Revision Petition challenging the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881. The petitioner, a tenant, issued a cheque for rent payment which was dishonored due to insufficient funds, leading to a complaint under Section 138 N.I. Act. The defense raised by the petitioner regarding the issuance of the cheque and liability was considered by the learned M.M. The petitioner failed to provide substantial evidence in defense, leading to conviction and sentencing to two years of simple imprisonment and a fine. The appeal before the learned ASJ resulted in the conviction being upheld, with modification in the sentence due to the legal entity of the Company. The directors were held liable for the offense, and the sentence was limited to them.The petitioners challenged the conviction on grounds of witness competency and authority to depose, citing precedents. The defense argued that one of the directors was not actively involved in the company's affairs and should not be held liable. Precedents were cited regarding the liability of directors in such cases, emphasizing the need for specific averments and proof. The defense also questioned the evidence presented, including a letter and the lease deed, claiming that the basic ingredients of the N.I. Act were not proven.The court rejected the challenges raised by the petitioners, emphasizing that the witness was competent to depose based on the SPA and that the petitioners failed to provide substantial evidence in their defense. The liability of the directors under Section 141 N.I. Act was upheld, as they were involved in the company's affairs and the cheque was issued on behalf of the company. The evidence regarding the cheque issuance and rent liability was deemed sufficient, with the presumption under Section 139 NI Act favoring the complainant. The defense's argument regarding a letter intended for another individual was dismissed, as the authenticity of the letter and the rent liability were established.In conclusion, the court affirmed the conviction and sentence, stating that the judgment suffered from no infirmity. The Revision Petition was dismissed, upholding the decision of the learned ASJ.