2026 (2) TMI 1 - HC - Indian Laws

Dishonoured cheque under Negotiable Instruments Act: conviction sustained on unrebutted presumption; court removes state costs.

Rebuttable presumption under the Negotiable Instruments Act that a cheque reflects a legally recoverable debt was found unrebutted because the cheque was ... Rebuttable presumption u/s 139 of the Negotiable Instruments Act - Existence of legally recoverable debt for offence u/s 138 of the Negotiable Instruments Act - Admissibility of additional evidence by appellate court - Appellate discretion u/s 391 CrPC to secure ends of justice - Appellate powers to decide conviction and sentence - High Court supervisory jurisdiction on criminal revision - HELD THAT:- Admittedly, cheque is issued in a sum of Rs. 3,80,000/-. Cheque was presented at the first instance and it was dishonoured and later on, amount was demanded by the complainant and there was a request to represent the same and as such, cheque was again represented on 08.05.2008. Again the cheque was dishonoured for ‘want of funds’ and there was no reply to the legal notice. Non reply to the callings of the legal notice exposes the hollowness in the claim of the accused. On perusal of the additional evidence for the sake of appreciating the arguments of learned counsel for the revision petitioner, would make it clear that the contention of the accused that trailer were not delivered is not established. Therefore, taking note of all these aspects of the matter and especially in the absence of any reply notice and any contra evidence placed on record, this Court is of the considered opinion that the dismissal of the appeal by the First Appellate Court and also rejecting the additional evidence, if not providing proper reasons, would not be a ground to interfere with the order of the First Appellate Court In the case on hand, no such ambiguity would arise, inasmuch as, accused failed to establish that she did not take delivery of the trailers and cheque issued towards payment of cost of the trailers vide Exs.P.10 and 11 stood dishonoured and thereby, the offence committed by the accused is duly established by the material evidence placed on record. Therefore, viewed from any angle, both the decisions are not applicable to the case on hand. However, both the Courts have missed out a fact that lis is between two private parties and no State machinery is involved. Thus, imposition of Rs. 5,000/- towards the defraying expenses of the State needs to be set aside and to that extent, case is made out by the revision petitioner for interference. Revision Petition is allowed in part. Issues: (i) Whether the First Appellate Court erred in refusing to admit additional evidence under Section 391 CrPC; (ii) Whether the conviction under Section 138 of the Negotiable Instruments Act is sustainable and whether the monetary directions imposed by the courts below require modification.Issue (i): Whether the First Appellate Court should have permitted the accused to place the additional documents on record under Section 391 CrPC.Analysis: The appellate power under Section 391 is wide but confined to cases where additional evidence is necessary to avoid failure of justice or where the evidence could not reasonably have been produced at trial despite due diligence. The documents sought to be admitted were obtained after trial and appeal, and the record shows no explanation that due diligence prevented their production during trial. Several documents were created post-initiation of proceedings and the application did not demonstrate that non-production at trial was unavoidable. The appellate court considered the existing material sufficient to decide the appeal and found the proposed evidence to be an afterthought without bearing to rebut the presumption raised under Section 139.Conclusion: The refusal to admit additional evidence under Section 391 CrPC was justified; no interference is warranted on this ground (decision against the accused).Issue (ii): Whether the conviction under Section 138 NI Act is established and whether the fines/compensation and costs require alteration.Analysis: Complainant discharged the initial burden by producing the cheque, invoice, banker evidence and related documentary proof, thereby raising the statutory presumption under Section 139. The cheque bore endorsements of dishonour for insufficiency of funds on two presentations and legal notice remained unanswered. The accused did not place contemporaneous or credible evidence at trial to rebut the presumption (other than suggestions in cross-examination). Documentary and oral evidence on record supported delivery and the existence of a legally recoverable debt. Courts below therefore correctly sustained conviction on merits. However, the matter between private parties involved no State machinery; imposition of Rs. 5,000 as defraying expenses of the State was inappropriate and excessive relative to statutory limits on fine under Section 138.Conclusion: Conviction under Section 138 NI Act is upheld (decision against the accused). Monetary directions modified: fine reduced to and ordered as Rs. 7,60,000 as compensation to complainant; Rs. 5,000 towards defraying State expenses set aside (partial relief in favour of the accused).Final Conclusion: The revision petition is partly allowed the challenge to admission of additional evidence fails and the conviction is maintained; monetary relief is granted by modifying the fine/expenses as set out above, producing a limited favourable outcome to the revision petitioner without disturbing the conviction.Ratio Decidendi: Where the complainant establishes initial proof under Section 139 NI Act and the accused fails to produce contemporaneous evidence or show due diligence to warrant fresh evidence on appeal, appellate courts may refuse admission of additional evidence under Section 391 CrPC; conviction under Section 138 stands if a legally enforceable debt and cheque dishonour are established, but courts may correct inappropriate monetary impositions where State expenses are not warranted.