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IN THE HIGH COURT OF CHHATTISGARH
Rajani Dubey, J.
Shyam Shrivastava S/o N.L. Shrivastava - Appellant
Versus
Vikas Shrivastava S/o Naval Kishore Shrivastava- Respondent
ACQA/65 of 2016
Decided On : 07-02-2025
(A) Negotiable Instruments Act, 1881 - Section 138 - Acquittal appeal - The appellant filed a complaint alleging that the respondent issued a cheque for part compensation of sold joint property, which was dishonored due to insufficient funds - The trial court acquitted the respondent, finding no offence under Section 138 - The appellant contended that the trial court failed to appreciate the legal presumptions under Sections 138 and 139 of the Act - The court found that the cheque was indeed issued and dishonored, and the trial court's findings were not in accordance with the law. (Paras 1-14)
(B) Presumption of liability - Under Section 138, there is a presumption that cheques are issued for discharging legal liabilities, which the accused must rebut - The trial court erred in not applying this presumption correctly. (Paras 11-12)
(C) Burden of proof - The burden lies on the accused to disprove the presumption of liability, which he failed to do. (Paras 11-12)
Facts of the case:
The appellant alleged that the respondent sold joint property without consent and issued a cheque for part compensation, which was dishonored. The trial court acquitted the respondent, stating no offence was committed.
Findings of Court:
The trial court's acquittal was found to be erroneous as it did not apply the legal presumptions correctly.
Issues: Whether the cheque was issued for a legal liability and whether the trial court erred in its findings.
Ratio Decidendi: The court ruled that the trial court failed to apply the presumptions under Sections 138 and 139, leading to an incorrect acquittal.
Result: Appeal allowed; the respondent convicted under Section 138 and sentenced to pay compensation.
Judgment :
(Rajani Dubey, J.)
1. This acquittal appeal is filed under Section 378 (4) of Cr.P.C by the appellant/complainant against the impugned judgment dated 27.02.2016 passed by the learned Judicial Magistrate, First Class, Raipur (Chhattisgarh) in Complaint Case No. 1077/2013, whereby the learned trial Court has acquitted the respondent/accused of the charge for commission of offence under Section 138 of the Negotiable Instruments Act, 1881.
2. Brief facts of the case are that the appellant/complainant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 before the learned trial Court alleging that the respondent is cousin brother and they have joined property situated at Satti Bajar, Raipur. The respondent and his brother Manish Shrivastava, his father Naval Kishore Shrivastava have made false and fabricated documents to sale a big part of joint property and they have succeeded on their conspiracy and sold a part of the property in Rs. 1,10,000,000 (One Crore Ten Lakhs) without any proper partition or any consent of the appellant/applicant. The complainant has lodged an F.I.R against the respondent, his brother and his father under Sections 420, 467, 468, 471, 34 of IPC. The respondent has given a cheque bearing No. 16255 dated 06.05.2013 Bank of Baroda branch Bemetara Rs. 5,00,000/- (Five Lakhs) for part compensation of the sold property. The appellant has presented the cheques on 07.06.2013, but the same was returned by the concerned Bank with a memo bearing remark and “insufficiency of fund”. That the appellant had asked to the respondent about the cheque bounce which he has given to the appellant, the respondent has assured that he will pay as early as possible the amount and he had promised that he will pay the amount till July, 2013 and given instruction to the appellant that he can move the above cheque for clearance on 27.07.2013. The appellant has again presented the above cheque for clearance but the same was returned by the concerned Bank with a memo bearing remark and “insufficiency of fund”. Hence, the notice was issued by the appellant’s lawyer on 15.08.2013 Exb. C-04 whereby the demand was raised, but the non applicant has given his reply on 29.08.2013 and denied all the averments, claim raised by the appellant. The only defence raised in the reply of the notice was that father of the appellant has said that now there is no necessity to pay the amount and there is no other defence for non payment. Hence, the complaint was filed alleging that the respondent/non applicant has committed an offence which is punishable under Section 138 of the Negotiable Instruments Act, 1881.
3. The complaint was contested by the non applicant/respondent. After recording of evidence, the learned trial Court has dismissed the complaint filed by the complainant holding that the respondent has not committed any offence punishable under Section 138 of the Act and acquitted the non applicant on 27.02.2016. Hence, this acquittal appeal filed by the appellant/complainant.
4. In support of the complaint, the appellant/complainant examined himself as PW-01 and exhibited 07 documents to bring home the guilt against the accused/respondent, whereas the respondent/accused has examined his Advocate as (DW-01) in his defence.
5. The learned trial Court after appreciating the oral and documentary evidence by judgment dated 27.02.2016, acquitted the respondent of the offence under Section 138 of the Negotiable Instruments Act, 1881. Hence, this acquittal appeal filed by the appellant/complainant.
6. Learned counsel for the appellant submits that the learned trial Court has failed to appreciate the facts of the case and provisions of Negotiable Instruments Act, 1881. The learned trial Court has failed to appreciate that cheque has been given for assurance and for the liability on account of the selling of the joint property and the amount is for part compensation of the sold property which is clear from the contents of complaint
The court emphasized that under Section 138 of the Negotiable Instruments Act, there is a presumption that cheques are issued for discharging legal liabilities, which the accused must rebut.
Presumption under Section 139 NI Act shifts burden to accused to rebut by probable defence; trial court erred in requiring complainant to prove debt, rendering acquittal perverse in appeal.
The presumption of the existence of a legal liability under the Negotiable Instruments Act is rebuttable, necessitating the complainant to provide sufficient evidence of such liability.
Appellate court should not interfere with acquittal under Section 138 NI Act based on reliable forensic evidence disproving accused's signature on cheque, as presumption under Sections 118 and 139 re....
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.
Dishonour of cheque – Accused had to prove by cogent evidence that there was no debt or liability.
The appellate court has the authority to review evidence in acquittal appeals, but must respect the presumption of innocence and ensure that any findings against the accused are based on substantial ....
The presumption under Section 139 of the Negotiable Instruments Act is mandatory, placing the burden on the accused to rebut the existence of a legally enforceable debt.
The presumption of liability under Section 139 of the Negotiable Instruments Act requires the accused to prove non-existence of debt, influencing the court's conviction decision.
The cheque must represent a legally enforceable debt at the time of encashment; the burden to rebut the presumption of liability lies with the accused.
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