IN THE HIGH COURT OF BOMBAY AT GOA BENCH
C.V. BHADANG, J.
Sharad Sukhtankar - Appellant
Versus
Rajendra N. Biliye and Others - Respondent
Criminal Appeals Nos. 19, 20 of 2011
Decided On : 17-03-2015
Negotiable Instruments Act - Cheque Dishonour - Section 138 of the Negotiable Instruments Act, 1881 - [Section 138] - [Summary of the acts and sections referenced and discussed by the court: The court discussed the essential requirement for an offence under Section 138 of the Act, which is to prove that the cheque was issued for a legally enforceable debt or liability. The court also highlighted the presumption in favor of the appellant arising under Section 139 of the Act read with Section 118 of the Act, and the burden of proof on the complainant to establish the case beyond reasonable doubt. The court emphasized the limited jurisdiction in an appeal against acquittal, where the appellate court cannot substitute its own view unless the finding recorded by the Trial Court is shown to be perverse or not borne out of the record.]
Fact of the Case:
The appellant filed two separate complaint cases for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 against the respondent for dishonoring cheques due to insufficient funds. The appellant claimed to have advanced a sum of Rs. 4,66,000/- to the respondent and issued four promissory notes for repayment.
Finding of the Court:
The learned Magistrate concluded that the appellant failed to prove that the subject cheques were issued for discharge of a legally enforceable liability, which is a basic requirement for an offence under Section 138 of the Act. Consequently, both the complaints were dismissed, and the respondent was acquitted.
Issues: The main issue was whether the appellant had proven that the subject cheques were issued for a legally enforceable debt or liability, as required under Section 138 of the Act.
Ratio Decidendi: The court emphasized the essential requirement for an offence under Section 138 of the Act, the burden of proof on the complainant to establish the case beyond reasonable doubt, and the limited jurisdiction in an appeal against acquittal.
Final Decision: The Criminal Appeals failed, and the court dismissed them.
C.V. BHADANG, J.
1. Both these Criminal Appeals involve a similar question of law and fact. They are between the same parties. As such, they are being disposed of by this common judgment.
2. The appellant is the original complainant, who had filed two separate complaint cases for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (the Act, for short) against the respondent/ original accused. According to the appellant, she had advanced a sum of Rs. 4,66,000/- to the respondent no. 1 as the respondent no. 1 was in dire need of the same. Further, according to the appellant, the respondent no. 1 had agreed to repay the said amount along with interest at the rate of 12 % p.a. amounting to a sum of Rs. 6,12,360/-. Further, according to the appellant, towards the repayment of the said sum, the respondent no. 1 had executed four promissory notes dated 12/06/2006 for a sum of Rs. 50,000/- each amounting to Rs. 2,00,000/-.
3. The appellant claimed that towards the discharge of his liability, the respondent no. 1 issued many cheques. Present appeals pertain to two cheques in the sum of Rs. 20,000/- and Rs. 21,000/- dated 22/08/2008 drawn on the ICICI Bank, Margao Branch. Both these cheques when presented by the appellant for encashment, were dishonoured on account of insufficient funds. In such circumstances, the appellant instituted the complaint cases, after issuance of the notice.
4. The appellant examined herself before the learned Magistrate and produced the subject cheques, bank return memo, copy of legal notice and the envelope which was returned, as it was unclaimed by the respondent no. 1. The appellant also produced the four promissory notes at exhibit C-25 to C-29. The respondent did not lead any evidence, however, produced the promissory notes dated 15/04/2003 collectively at exhibits C-26 again in the sum of Rs. 50,000/- each. The learned Judicial Magistrate, on consideration of the evidence, came to the conclusion that the appellant had failed to prove that the subject cheques were issued for discharge of a legally enforceable liability, which is the basic requirement for an offence under Section 138 of the Act. In the face of such a finding, both the complaints came to be dismissed by judgment dated 10/08/2010 and the respondent no. 1 has been acquitted. Feeling aggrieved, these appeals are filed.
5. I have heard Shri Shet, learned Counsel for the appellant. None for the respondents. With the assistance of the learned Counsel for the applicant, I have perused the record produced in these appeals and the impugned judgments.
6. It is submitted on behalf of the appellant that admittedly there were promissory notes executed by the respondent no. 1. Further more, the learned Magistrate in paragraph 26 of the judgment has also found that the other required ingredients of Section 138 of the Act have been fulfilled and established. It is submitted that in such circumstances, the learned Magistrate was in error in holding that the appellant has failed to prove that the subject cheques were issued against legally enforceable debt or liability. It is, therefore, submitted that the impugned judgment of acquittal demonstrates an apparent error which needs to be corrected by this Court. The learned Counsel would submit that there is a presumption in favour of the appellant arising under Section 139 of the Act read with Section 118 of the Act and once the respondent no. 1 has admitted and/ or failed to dispute the signature on the cheque, a presumption would arise that the cheques were issued against legally enforceable debt or liability. He submitted that the learned Magistrate has failed to properly appreciate the evidence produced on record which has resulted into the judgment of acquittal being passed. He, therefore, submitted that the appeals be allowed.
7. I have considered the circumstances and the submissions made. It cannot be disputed that for an offence under Section 138 of the Act, the compla
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