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IN THE HIGH COURT OF BOMBAY
G.A. Sanap, J.
Balabhau Haribhau Kavanpure - Appellant
Versus
Sai Auto Agencies - Respondent
Criminal Revision Application No. 100 of 20 18
Decided On : 10-07-2023
N.I. Act - Negotiable Instruments Act, 1881 - Sec. 138, Sec. 118, Sec. 139 - The court discussed the provisions of Sec. 138 of the N.I. Act, which penalizes dishonor of cheques due to insufficient funds, and the presumptions under Sec. 118 and Sec. 139 regarding the validity of negotiable instruments and the burden of proof on the accused. The court found that the complainant had established the foundational facts necessary to invoke these presumptions, leading to the conclusion that the accused was liable for the dishonored cheque. The court upheld the conviction and sentence, while modifying the substantive sentence based on the accused's time served.
Fact of the Case:
The accused purchased a tractor on credit from the complainant and later requested a loan down payment, which the complainant provided. The accused issued a cheque for the amount but it was dishonored due to insufficient funds. The complainant filed a complaint under Sec. 138 of the N.I. Act after the accused failed to respond to a demand notice.
Finding of the Court:
The court found that the complainant had provided sufficient evidence to establish the transaction and the dishonor of the cheque. The accused admitted to the signature on the cheque and the receipt of the demand notice, which supported the complainant's case. The court concluded that the evidence was adequate to invoke the presumptions under Sec. 118 and Sec. 139 of the N.I. Act.
Issues: Whether the complainant proved the essential ingredients of Sec. 138 of the N.I. Act and whether the accused successfully rebutted the presumptions under Sec. 118 and Sec. 139.
Ratio Decidendi: The court held that the presumption of consideration under Sec. 118 and the presumption of receipt of the cheque for discharge of a debt under Sec. 139 are applicable unless the accused provides sufficient evidence to the contrary. The concurrent findings of fact by the lower courts were upheld as they were supported by cogent evidence.
Final Decision: The court modified the substantive sentence to the period already served by the accused but upheld the conviction and the requirement for the accused to pay the remaining compensation amount.
Key Points: - The court states that presumption under Sec. 118 (consideration) and Sec. 139 (debt/discharge) applies unless the accused proves otherwise; and the burden is on the accused to rebut these presumptions. (!) - The complainant must prove the basic ingredients of Sec. 138 (dishonor of cheque due to insufficient funds) with evidence, including acknowledgment of signatures and receipt of demand notice. (!) - The evidence must be sufficient to invoke the presumption under Ss. 118 and 139; in this case, the court found the evidence adequate and upheld conviction. (!) - The court modified the substantive sentence to the period already served, and directed remaining compensation to be paid within two months, with a default of 15 days’ simple imprisonment, and ordered deposit of compensation in trial court. (!) (!) (!) (!) - The revision was dismissed; concurrent findings of fact were upheld. (!) - The accused admitted signature on the cheque and receipt of demand notice, and the court relied on this to consider presumptions and the defense. (!) - The act penalizes dishonor of cheques for insufficient funds; presumption of consideration and receipt of the cheque for discharge of debt are applicable unless rebutted. (!)
JUDGMENT/ORDER
1. In this revision, challenge is to the judgment and order dtd. 10/4/2018, passed by learned Sessions Judge, Amravati, whereby the learned Sessions Judge dismissed the appeal filed by the applicant/ accused against his conviction and sentence for the offence punishable under Sec. 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as "the N.I. Act" for short), awarded by learned Judicial Magistrate, First Class, Court No.3, Amravati. Learned Judicial Magistrate, First Class, Amravati had sentenced the accused to undergo rigorous imprisonment for three months and to pay compensation of Rs.1, 00, 000.00 (Rupees One lakh only) and in default to suffer simple imprisonment for six months.
2. In this judgment, the parties would be referred by their nomenclature in the complaint. The applicant is the original accused and the non-applicant is the original complainant. The non-applicant is a partnership firm represented by its partner. It is the case of the complainant that the accused on 10/10/2008 had purchased 'Eicher 485' tractor on credit from the complainant. At the time of delivery of the tractor, the accused had not paid a single pie. Delivery of the tractor was made on credit due to cut-throat competition in the market and to achieve the target of the manufacturer. The accused had informed the complainant that he would be applying for loan from the bank and after sanction of the loan, he would pay the price of the tractor.
3. It is stated that in December-2013, the accused approached the partnership firm of the complainant and informed that the bank has approved the loan for purchase of tractor. However, the bank has put a condition that he should deposit Rs.95, 000.00 towards down payment. He had no money. He made a written request to the partner of the complainant to advance him Rs.95, 000.00 for being deposited as down payment in the bank. The complainant, considering the difficulty of the accused, on 10/10/2008 paid Rs.95, 000.00 in cash. The accused, on that date, executed 'Usanwar Chitthi'. He agreed to return the amount on or before 30/3/2009. In order to secure the interest of the complainant, he issued a cheque dtd. 30/3/2009 for Rs.95, 000.00, drawn on his account maintained with Amravati District Central Cooperative Bank, branch Haturna. It is further stated that on 18/12/2008, the accused came to the showroom to deposit Rs.1, 50, 000.00 and demanded the receipt. The complainant suggested him to deposit only Rs.5, 000.00 against hand loan of Rs.95, 000.00. The accused thereafter deposited Rs.5, 000.00, but failed to repay Rs.90, 000.00. The complainant, therefore, presented the cheque for encashment on 29/4/2009. It was dishonoured on the ground of "insufficient funds" in the account of the accused to honour the cheque. The complainant issued notice dtd. 7/7/2009. Notice was received by the accused. The accused neither replied the notice nor repaid the amount. On filing of the complaint, learned Magistrate took cognizance and issued process against the accused.
4. CW1 is the complainant. CW2 is the Manager of the complainant agency. The accused examined himself in support of his defence. Learned Magistrate, on consideration of the evidence, convicted and sentenced the accused as above. The appeal filed against the order of conviction and sentence was dismissed by the learned Sessions Judge. The accused is, therefore, before this Court.
5. I have heard learned advocate Mr. Manojkumar Mishra for the accused and learned advocate Mr. Ritesh N. Badhe for the complainant. Perused the record and proceedings.
6. Learned advocate for the accused submitted that the case of the complainant is self-contradictory and therefore, the accused is required to be given benefit of doubt. Learned advocate pointed out that the accused has denied his signature on the promissory note, alleged to have been executed by him. Learned advocate submitted that the case of the complainant is totally unbelievable and ther
AI
The presumption of consideration and the presumption of receipt of a cheque for discharging a debt under Sec. 118 and 139 of the N.I. Act are pivotal in establishing liability in cheque dishonor case....
The presumption of a debt under Sec. 139 of the N.I. Act is a significant legal principle, which places the burden on the accused to prove the contrary when a cheque is dishonored.
[The presumption of consideration under Section 139 of the Negotiable Instruments Act is a significant legal principle, placing the burden on the accused to prove otherwise, which was not met in this....
The presumption of consideration in cheque transactions under the N.I. Act is strong, and the burden lies on the accused to rebut this presumption with credible evidence.
The court upheld that a dishonored cheque creates a presumption of liability unless adequately rebutted, reinforcing the legal principles under Sections 118 and 139 of the Negotiable Instruments Act.
In a prosecution under Section 138 of the NI Act, once the execution of a cheque is admitted or proven, a presumption under Section 139 arises in favour of the complainant, and the burden shifts to t....
Under S. 139 of the Negotiable Instruments Act, once the execution of a cheque is established, a rebuttable presumption of a legally enforceable debt arises, and mere suggestions by the accused witho....
The burden of proof, legal presumptions, and the accused's admission of debt in the issuance of the cheque are crucial in determining liability under the Negotiable Instrument Act.
The High Court's revisional jurisdiction is supervisory in nature and limited to correcting legal improprieties or perversity in findings; it cannot be used to reappreciate evidence where trial and a....
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