2025 (12) TMI 213 - HC - Indian Laws

Revisional challenge under Sections 397/401 and 482 CrPC fails in cheque dishonour conviction under NI Act

M/s IMPACT FIRE AND SAFETY APPLIANCE PVT LTD & ANR. Versus STATE GOVERNMENT OF NCT OF DELHI & ANR.

HC, exercising revisional jurisdiction under Sections 397/401 read with Section 482 CrPC, declined to interfere with concurrent conviction and sentence of ... Dishonour of Cheque - invocation of revisional jurisdiction under Sections 397/401 read with Section 482 CrPC - rebuttal of statutory presumptions u/s 118 and 139 of the Negotiable Instruments Act, 1881 - HELD THAT:- It is well settled that this Court ought to exercise restraint, and should not interfere with the findings of the impugned orders or reappreciate evidence solely because another view is possible unless the impugned orders are wholly unreasonable or untenable - It is not open to the Court to misconstrue the revisional proceedings as a second appeal by sitting in appeal over the challenged orders. In the present case, the petitioners have sought to prove their case by controverting that the cheque in questions was not issued to discharge any legally enforceable debt - Upon a perusal of the impugned judgment as well as the judgment on conviction, it can be seen that the arguments of the petitioners have been extensively dealt by the learned ACMM as well as the learned ASJ respectively. It is trite law that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque/respondent received the cheque in discharge of a legally enforceable debt or liability are raised against the accused. In the present case, the main defence raised by the Petitioner is with respect to his liability of the cheque amount in question. It has been stated that certain defective goods worth Rs. 57,530/- were returned to the respondent. To prove the same, the appellant had relied upon the delivery challan dated 16.10.2014 (Ex. DW1/A) and had examined DW-1/Rajiv Kumar, the alleged employee of the respondent no. 2 who had allegedly received the defective goods and DW-2/Vinod Mondal, the alleged dispatch man who had delivered the defective goods - However, it is evident from the record that both the witnesses have not supported the case of the Petitioner. It has been rightly observed that there is no documentary or oral evidence on record to prove that defective goods were returned by the petitioner to the respondent - in the opinion of this Court, the contention of the petitioner that the learned ACMM as well as the learned ASJ failed to appreciate that the subject cheques were not issued to discharge any legally enforceable debt, is bereft of any merit. This Court finds no infirmity in the impugned judgment passed by the learned ASJ, and the same does not warrant any interference - Petition dismissed. 1. ISSUES PRESENTED AND CONSIDERED 1.1 Whether, in revisional jurisdiction, the Court could interfere with concurrent findings of conviction under Section 138 of the Negotiable Instruments Act, 1881, on the basis that another view of the evidence was possible. 1.2 Whether the cheque in question was issued in discharge of a 'legally enforceable debt or liability' and whether the accused successfully rebutted the statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act, 1881. 1.3 Whether the alleged return of defective goods by the accused negated or reduced the liability underlying the cheque amount. 1.4 Whether non-service or alleged non-receipt of the statutory legal demand notice defeated the complaint under Section 138 of the Negotiable Instruments Act, 1881. 2. ISSUE-WISE DETAILED ANALYSIS 2.1 Scope of revisional jurisdiction in challenging concurrent findings Legal framework (as discussed): The Court adverted to Sections 397/401 CrPC and referred to the decisions in Sanjaysinh Ramrao Chavan v. Dattatray Gulabrao Phalke and State of Kerala v. Puttumana Illath Jathavedan Namboodiri to delineate the limits of revisional jurisdiction as supervisory, confined to correctness, legality and propriety of findings, sentence or order, and not equivalent to a second appellate jurisdiction or a forum for reappreciation of evidence, except where glaring features indicate gross miscarriage of justice. Interpretation and reasoning: The Court emphasised that in a revision petition against concurrent findings of the Magistrate and the Sessions Court, it could not sit in appeal or re-evaluate evidence merely because another view was possible. Its role was limited to seeing whether the impugned judgment was unreasonable, untenable in law, or disclosed any gross miscarriage of justice. On perusal of the trial and appellate judgments, the Court found that the evidence and the defence of the petitioners had been extensively and appropriately dealt with. Conclusions: The Court held that no perversity, illegality, or material irregularity in the appreciation of evidence by the courts below was demonstrated so as to justify interference in revision. 2.2 Existence of legally enforceable debt and operation of presumptions under Sections 118 and 139 NI Act Legal framework (as discussed): The Court noted that the petitioner admitted his signature on the cheque, its particulars in his handwriting, its issuance towards goods supplied under a specific tax invoice, and its dishonour. Referring to Section 118 and Section 139 of the NI Act, and to Rangappa v. Sri Mohan, the Court held that once execution of the cheque is admitted, presumptions arise that the cheque was drawn for consideration and received in discharge of a legally enforceable debt or liability. The Court also relied on Rajesh Jain v. Ajay Singh to highlight that, upon such presumption, the evidential burden shifts to the accused to rebut it by demonstrating non-existence of debt or liability, either by leading defence evidence or on the basis of particular circumstances of the case, on a preponderance of probabilities. Interpretation and reasoning: The Court treated the admitted issuance and dishonour of the cheque against the identified invoice as sufficient to trigger the statutory presumptions. It examined the defence that there was no subsisting liability because part of the goods were allegedly defective and returned. The Court, consistent with the principles in Rajesh Jain, focused on whether the accused had discharged the evidential burden of rebutting the presumption by credible defence, rather than requiring the complainant to further prove the loan/liability beyond the presumptions once execution was admitted. Conclusions: The Court concluded that the presumptions under Sections 118 and 139 stood attracted and remained unrebutted, the accused having failed to establish that no debt or liability existed to the extent of the cheque amount at the time of its issuance or presentation. 2.3 Defence of alleged return of defective goods and its effect on liability Interpretation and reasoning: The petitioners claimed that defective goods worth Rs. 57,530 were returned, thereby negating or reducing liability. To support this, they relied on a delivery challan dated 16.10.2014 (Ex. DW1/A) and examined DW-1 (alleged employee of the complainant who received the goods) and DW-2 (alleged dispatch man who returned the goods). The Court noted: (a) DW-1, a summoned witness, categorically denied knowledge of any transaction, return of goods, or challan process, and stated he had no direct dealings with customers. (b) DW-2 failed to prove his employment with the petitioners, denied knowledge of the articles, and admitted that the delivery challan dated 16.10.2014 was not prepared by him. (c) There was no document on record to establish that the goods delivered by the complainant were defective. (d) The delivery challan (Ex. DW1/A) was dated 16.10.2014, subsequent to issuance of the cheque on 12.10.2014, and did not state that goods were being returned due to defects. Instead, it carried a typed endorsement that the goods were received 'in good condition'. (e) No complaint regarding defective goods was made between the date of invoice (04.09.2014) and the date of cheque (12.10.2014). (f) The employee purportedly preparing the alleged delivery challan was not examined, and the complainant was not cross-examined regarding the delivery challan despite its availability with the petitioners. On this basis, the Court endorsed the findings of the trial and appellate courts that the defence witnesses did not support the petitioners and that the plea of return of defective goods was unsubstantiated. Conclusions: The Court held that there was no reliable oral or documentary evidence to prove return of defective goods or any adjustment of liability; hence the defence that there was no legally enforceable debt to the extent of the cheque amount was rejected as meritless. 2.4 Alleged non-service of statutory legal demand notice Legal framework (as discussed): The Court reiterated the settled position that a notice properly addressed and sent by registered post is deemed to be served, and that service of court summons cures any alleged defect in service of statutory notice. Interpretation and reasoning: The petitioner claimed non-receipt of the legal notice dated 24.11.2014. The Court observed that: (a) The petitioner did not dispute the correctness of the address to which the notice was sent. (b) The complainant proved dispatch of the notice to the petitioners' address through postal receipt (Ex. CW1/E) and tracking report (Ex. CW1/G). In light of these, and applying the presumption of due service of a properly addressed and posted notice, the Court found the plea of non-service untenable. It also noted that any alleged defect in service would in any case be cured by service of court summons. Conclusions: The Court held that service of the legal demand notice stood duly proved in law, and non-receipt as alleged by the petitioners did not vitiate the proceedings under Section 138 NI Act. 2.5 Overall conclusion on conviction and interference in revision Interpretation and reasoning: Having found (i) the cheque and its issuance towards the transaction admitted, (ii) statutory presumptions under Sections 118 and 139 applicable and not rebutted, (iii) the defence of return of defective goods unsupported by credible evidence, and (iv) legal notice duly served in law, the Court held that all ingredients of the offence under Section 138 NI Act were satisfied. On revisional standards, the Court found no infirmity, illegality, or perversity in the concurrent judgments of the trial and appellate courts. Conclusions: The Court declined to interfere in its revisional jurisdiction and dismissed the petition, thereby affirming the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881.