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IN THE HIGH COURT AT CALCUTTA
SHAMPA DUTT (PAUL), J.
Kuldip Singh – Appellant
Versus
M/s. G.S. Atwal and Company – Respondent
CRA No. 593 of 2016
Decided On : 25-07-2023
NEGOTIABLE INSTRUMENTS ACT - SECTION 138 - DISHONOUR OF CHEQUE - BURDEN OF PROOF - PRESUMPTION - REBUTTAL - STANDARD OF PROOF - PREPONDERANCE OF PROBABILITIES - EVIDENCE ACT, 1872 - SECTION 114 - PRESUMPTIONS OF FACT - APPLICABILITY.
Fact of the Case:
The appellant's case was that the accused persons had issued a cheque for Rs. 35 lakhs in favour of the appellant's firm towards part payment of petroleum products. The cheque was dishonoured due to insufficient funds. The appellant sent a notice under Section 138 of the Negotiable Instruments Act to the accused persons, but they failed to make payment within the stipulated period. The appellant filed a complaint before the court under Section 138 of the Negotiable Instruments Act.
Finding of the Court:
The trial court acquitted the accused persons on the ground that the appellant failed to prove the existence of a legally enforceable debt or liability and that the cheque was issued in discharge of such debt or liability. The High Court, on appeal, set aside the trial court's order and convicted the accused persons.
Issues: 1. Whether the appellant had discharged the burden of proof to establish the existence of a legally enforceable debt or liability and that the cheque was issued in discharge of such debt or liability? 2. Whether the accused persons had successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act?
Ratio Decidendi: 1. The High Court held that the appellant had discharged the burden of proof by proving the issuance of the cheque by the accused firm by a partner, the dishonour of the cheque, and the due service of notice. The accused persons had not adduced any evidence to the contrary. 2. The High Court further held that the accused persons had failed to rebut the presumption under Section 139 of the Negotiable Instruments Act. The accused persons had merely denied the existence of a legally enforceable debt or liability, but they had not adduced any evidence to support their denial. The High Court also held that the accused persons could not rely on the presumption of innocence under Article 21 of the Constitution of India to rebut the presumption under Section 139 of the Negotiable Instruments Act.
Final Decision: The High Court allowed the appeal, set aside the trial court's order, and convicted the accused persons under Section 138 of the Negotiable Instruments Act.
JUDGMENT :
SHAMPA DUTT (PAUL), J.
(I) The Appeal
1. The present appeal against acquittal has been preferred against the Judgment and Order dated 03.02.2016 passed by the learned Judicial Magistrate, 1st Class, 4th Court, Asansol in connection with C. Case No. 357 of 2002 (T.R No. 86 of 2006), thereby acquitting the accuseds/respondents of the charge under Section 138 of the Negotiable Instruments Act.
(II) Appellant’s Case
2. Mr. Milon Mukherjee, learned senior counsel for the appellant, has submitted, that the appellant/complainant's case is that the appellant is the sole proprietor of a business concern named and styled as M/s. Kuldip Service Station situated at G.T. Road, Chanda, Post Office Kali Paharia, Police Station Jamuria, District- Burdwan, dealing with petrol, diesel and lubricants and maintains one current account being No. CC 1056 with Dena Bank, Asansol Branch.
3. The accused persons are partners of a concern named and styled as M/s. G.S. Atwal & Co. That in course of running their business the accuseds/respondents used to purchase various kinds of petrol, diesel and lubricants on credit from the appellant and in lieu of such business, the accused persons issued a cheque bearing Cheque No. CAB00/148317/072 dated 25.04.2002 drawn on State Bank of India, Asansol Bazar Branch for Rs.35 lakhs in favour of the appellant's firm on behalf of the respondent no. 1 company towards part payment of petroleum products.
4. The said cheque which was handed over to the appellant was placed for encashment with his banker, Dena Bank on 23.08.2002, but the same returned dishonoured on 24.08.2002.
5. On 04.09.2002 the appellant sent a notice under Section 138 of the Negotiable Instruments Act to the accused/respondent no. 1 company, through his learned advocate by registered post with A/D demanding payment of the aforesaid sum of Rs.35 lakhs within 15 days from the date of receipt of such notice.
6. On 06.09.2002 the accused/respondent no. 1 company received the aforesaid notice, but in spite of receipt thereof, the accused persons failed to make payment within the stipulated period as provided under the Negotiable Instruments Act.
7. Accordingly, the appellant filed a petition of complaint before the court of the learned Additional Chief Judicial Magistrate, Asansol on 04.10.2002 under Section 138 of the Negotiable Instruments Act against the accuseds/opposite parties.
8. The accuseds/respondents were examined under Section 251 of the Code of Criminal Procedure, 1973. The substance of the accusation was read over to the accuseds/respondents to which they pleaded not guilty and claimed to be tried.
9. The appellant, in order to prove his case examined three witnesses. The defence did not adduce any witness in their favour. The case of the defence was one of denial and false implication.
10. Considering the evidence on record and after hearing all the parties, the learned Magistrate was pleased by his judgment and order dated 03.02.2016 to find the accuseds/respondents not guilty of the offence punishable under Section 138 of the Negotiable Instruments Act and as such acquitted them from the said charge.
11. Being aggrieved by and dissatisfied with the impugned judgment and order dated 03.02.2016 passed by the learned Judicial Magistrate, 1st Class, 4th Court, Asansol in connection with C. Case No. 357 of 2002 (T.R. No. 86 of 2006), the appellant preferred an application for Special Leave to Appeal before this Hon'ble Court therein praying for leave to file an appeal against the aforesaid order of acquittal and the same was registered as CRMSPL No. 48 of 2016.
12. It is submitted by the appellant that P.W 2 in his deposition has proved that the cheque in question was sent to the State Bank of India, Asansol for collection and it was dishonoured owing to INSUFFICIENT FUND. P.W 3 deposed that the cheque in question was presented to their Bank namely Dena Bank, Asansol for encashment and the same was issued by the accused/respondent no. 1 company. Hen
(1) Dishonour of cheque – Proceedings under Section 138 of N.I. Act are quasi-criminal in nature and principles which apply to acquittal in other criminal cases are not applicable in cases instituted....
The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt or liability unless proven otherwise, and the accused's burden to raise a probable defense to rebut the....
Dishonour of cheque – Whereas prosecution must prove guilt of an accused beyond all reasonable doubt, standard of proof so as to prove a defence on part of accused is preponderance of probabilities.
The presumption under Section 139 of the NI Act mandates that a cheque is presumed to be issued for discharge of a debt unless the accused proves otherwise.
The presumption in favor of the complainant under the N.I. Act is rebuttable, and the standard of proof required to prove a defense in a criminal case is preponderance of probabilities.
The main legal point established is that the failure to rebut the presumption under Section 139 of the Negotiable Instruments Act can lead to conviction under Section 138 of the Act.
The court determined that under Sections 138 and 139 of the Negotiable Instruments Act, the presumption that a cheque was issued to discharge a debt is rebuttable, placing the burden on the accused t....
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