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IN THE HIGH COURT OF BOMBAY(NAGPUR BENCH)
AVINASH G. GHAROTE, J.
M/s. Sai Auto Agencies – Appellant
Versus
Hemant Ambadas Bajad – Respondents
Criminal Appeal No. 382 of 2022
Decided on : 19-08- 2022
The presumption under Section 139 of the Negotiable Instruments Act (hereinafter referred to as the N.I. Act) is attracted when the accused admits the issuance of the cheque and his signature upon the same. The accused can rebut this presumption either by effective cross-examination or by leading defence evidence. In the instant case, the accused did not lead any defence evidence and the admissions claimed to have been given by the complainant during the course of his cross-examination do not rebut the presumption. Therefore, the accused is guilty under Section 138 of the N.I. Act.
Fact of the Case:
The complainant, a dealer in tractors, had an agreement with the accused, who was a commission agent for the sale of tractors. The accused issued a cheque for Rs.14,72,799/- in favour of the complainant, which was dishonoured due to insufficient funds. The complainant issued a notice of demand, but the accused failed to make payment. The complainant filed a complaint under Section 138 of the N.I. Act. The trial court convicted the accused and sentenced him to three months' imprisonment and a fine of Rs.10,50,000/-. On appeal, the sessions court set aside the conviction on the ground that the complainant had recovered an amount of Rs.3,90,000/- from a third party prior to the issuance of the cheque. The complainant challenged the order of the sessions court in the High Court.
Finding of the Court:
The High Court held that the accused was guilty under Section 138 of the N.I. Act. The court found that the presumption under Section 139 of the N.I. Act was attracted as the accused admitted the issuance of the cheque and his signature upon the same. The court also found that the accused did not rebut this presumption by leading defence evidence or by effective cross-examination of the complainant. The court further held that the accused could not rely on the fact that the complainant had recovered an amount of Rs.3,90,000/- from a third party prior to the issuance of the cheque, as this amount was not paid by the accused and was recovered after the cheque was dishonoured.
Issues: 1. Whether the presumption under Section 139 of the N.I. Act was attracted in the instant case? 2. Whether the accused rebutted the presumption under Section 139 of the N.I. Act? 3. Whether the accused could rely on the fact that the complainant had recovered an amount of Rs.3,90,000/- from a third party prior to the issuance of the cheque?
Ratio Decidendi: 1. The presumption under Section 139 of the N.I. Act is attracted when the accused admits the issuance of the cheque and his signature upon the same. 2. The accused can rebut this presumption either by effective cross-examination or by leading defence evidence. 3. The accused cannot rely on the fact that the complainant had recovered an amount from a third party prior to the issuance of the cheque, as this amount was not paid by the accused and was recovered after the cheque was dishonoured.
Final Decision: The High Court allowed the appeal and restored the judgment of the trial court convicting the accused under Section 138 of the N.I. Act.
JUDGMENT :
1. Heard Mr. Badhe, learned counsel for the appellant/original complainant and Mr. Agrawal, learned counsel for the respondent/original accused. Admit. Heard finally with the consent of the learned counsels for the rival parties.
2. The present appeal arises out of the judgment by the learned Sessions Court in Criminal Appeal No.30/2018 dated 05.01.2022 whereby the judgment dated 18.01.2018 passed by the learned Chief Judicial Magistrate, convicting the accused for the offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter to be referred as the “N.I. Act”) and sentencing him to suffer simple imprisonment for three months and to pay a compensation of Rs.10,50,000/-, in default to suffer simple imprisonment for one month, has been set aside on the ground that since an amount of Rs.3,90,000/- was recovered by the complainant prior to the issuance of cheque by the accused which is claimed to have been admitted in his evidence, he was not entitled to present the cheque, but was liable to return it and take a fresh cheque for the balance amount and present it thereafter (para 10 page 19/20). The complainant having not so done it was held that the presumption under Section 139 of the N.I. Act stood rebutted and therefore, the accused was entitled to an acquittal which was so ordered.
3. The factual matrix is as under :
(ii) It is in pursuance to this agreement dated 19.09.2009 at Exh.34, that the accused made multiple transactions of sale of tractors for the complainant.
(iii) There was accounting in between the complainant and the accused on 15.06.2011, as a result of which, the accused issued a letter to the complainant of the same date (Exh.42 page 94), in which, the accused admitted his liability to the tune of Rs.14,72,799/- and in pursuance to that issued a cheque bearing No.215535, dated 16.06.2011 in the aforesaid sum drawn on the Axis Bank, Pune in favour of the complainant (Exh.44-cheque).
(iv) The said cheque was presented by the complainant to his bankers for realization, however, by a cheque return memo dated 13.07.2011 issued by the State Bank of India (bankers of the complainant) it was intimated that the amount could not be realized on account of the payment having been stopped by the drawer (Exh.47 page 99).
(v) On 11.08.2011, a demand notice under Section 138 of the N.I. Act (Exh.49 page 100) was issued by the complainant. During the period 13.07.2011 and 11.08.2011, the complainant had recovered a sum of Rs.40,500/- on 03.08.2011 from a customer directly (not from the accused) which was fairly disclosed in the notice under Section 138 of the N.I. Act and it was intimated that the accused was liable to pay the balance of the cheque amount i.e. less the amount received by the complainant directly from the customer, which was being credited to account of the accused.
(vi) By a reply dated 17.09.2011 (Exh.53 page 104), the liability was denied by the accused.
(vii) The complaint came to be filed on 23.09.2011 (page 52), which also disclosed the receipt of the amount of Rs.40,500/- by the complainant directly from one of the customers to whom the accused had sold one of the tractor (para 7 page 55).
(viii) The complainant filed an affidavit and entered into the witness box. In his examination-in-chief, he has proved the letter dated 15.06.2011 Exh.42 (page 94), which Mr. Agrawal, learned counsel for the accused/respondent also does not dispute here too.
(ix) The comp
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