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2015 Supreme(Del) 4042
DELHI HIGH COURT
Ashutosh Kumar, J.
Manoj Jain - Appellant
Versus
Surinder Kumar Jain & Anr. - Resopndent
Crl. Rev. P. No. 570 of 2013, Crl. M. (Bail) No. 2045 of 2013, Crl. M.A. Nos. 16098 of 2013 & 1619 of 2015
Decided On : 07-07-2015
For the Respondents:Mr. S.K. Jain & Ms. Khushboo Bhardwaj, Advocates.
The main legal point established in the judgment is the rebuttable nature of presumptions under the Negotiable Instruments Act, the burden of proof on the accused, and the need to balance the accused's rights and the interest of society in determining the compatibility between reverse burden and presumption of innocence.
Headnote:
Negotiable Instrument Act - Conviction under Section 138 - 138 of Negotiable Instrument Act, 1881 - Summary of Acts and Sections: Section 138, Section 139, Section 118(a), Section 27 of the General Clauses Act, Section 269 SS of the Income Tax Act - The court discussed the burden of proof, presumption of innocence, and the standard of proof required to establish a defense under the Negotiable Instrument Act. The court emphasized the rebuttable nature of the presumptions under Section 118(a) and Section 139 and the need for the accused to discharge the initial burden of proof by raising a probable defense. The court also highlighted the importance of balancing the accused's rights and the interest of society in determining the compatibility between reverse burden and presumption of innocence.
Fact of the Case:
The Petitioner was convicted under Section 138 of the Negotiable Instrument Act for issuing a cheque towards loan repayment, which was dishonored due to insufficient funds. The Petitioner claimed that the cheque was stolen and misused by the Respondent, and also questioned the validity of the notice served on him.
Finding of the Court:
The court found the Petitioner's defense to be false and upheld the conviction, emphasizing that the Petitioner failed to rebut the presumption under Section 139 of the Negotiable Instruments Act. The court also dismissed the Petitioner's contention regarding the source of funds and the validity of the notice served, holding that the provisions of the Income Tax Act did not help the Petitioner.
Issues: The issues involved the validity of the Petitioner's defense regarding the stolen cheque, the establishment of a legally enforceable debt or liability, and the validity of the notice served on the Petitioner.
Ratio Decidendi: The court emphasized the rebuttable nature of the presumptions under Section 118(a) and Section 139 of the Negotiable Instruments Act, the burden of proof on the accused, and the standard of proof required to establish a defense. The court also highlighted the importance of balancing the accused's rights and the interest of society in determining the compatibility between reverse burden and presumption of innocence.
Final Decision: The court upheld the conviction and dismissed the Petitioner's plea for modifying the sentence, ultimately dismissing the revision petition.
Ashutosh Kumar, J.:
1. The Petitioner impugns the judgment and order of conviction dated 25.02.2012/28.02.2012 passed by the Ld. Trial Court in Complaint case No. 36/08/12 whereby the Petitioner was convicted for the offence under Section 138 of Negotiable Instrument Act, 1881 and was sentenced to undergo Simple Imprisonment for a period of one year and to pay a fine, with a default clause, of Rs. 3 lakhs out of which Rs. 2.50 lakhs to be paid to the Respondent as compensation or suffer Simple Imprisonment for 2 months, as well as the Appellate Court judgment passed in Criminal Appeal No. 4/2012 on 30.08.2013 which upheld and affirmed the judgment and order of conviction passed by the Trial Court.
2. A complaint was filed by Surinder Kumar Jain under Section 138 Negotiable Instruments Act, 1881 against the Petitioner, stating therein, inter alia, that because of old acquaintance, a loan of Rs. 1,50,000/- was given to the Petitioner in October 2006, to be repaid after one year with interest at the rate of 15% per annum.
3. The Petitioner issued a cheque of Rs. 1,50,000/- (Ex.CW1/1) towards full and final settlement of the loan amount. The cheque could not be honoured because of “Insufficient Funds”. The notice to the Petitioner dated 23.04.2008, was returned with a note that the addressee had “left without address”. However, UPC was served on the Petitioner.
4. The notice was neither replied to nor complied with by the Petitioner. Hence the complaint.
5. During trial, the Petitioner took a specific defence that the cheque (Ex.CW1/1) was stolen by the Respondent from his shop and was misused. He also took the plea that the mandatory notice was deliberately issued to him on a wrong address. Lastly, he took the plea that the Respondent could not establish any debt or other liability even though the Petitioner discharged the initial burden of rebutting the presumption of any debt or liability. Similar statement was made by him under Section 313 of the Cr. PC.
6. The Petitioner also examined a defence witness namely Ankush Jain (DW1), who supported the contention of the Petitioner about the theft of the cheque in the year 2008.
7. The Trial Court, held the Petitioner guilty by holding that he could not rebut the presumption under Section 118(a) and Section 139 of the Negotiable Instruments Act, as also the presumption under Section 27 of the General Clauses Act with regard to service of legal notice.
8. In appeal, the same sets of grounds were taken by the Petitioner. The appeal, too, was dismissed and the judgment and order of the Trial Court was upheld.
9. From the perusal of the records, it appears that the defence of the Petitioner, that the cheque in question was stolen, is palpably false. Ankush Jain (DW1) has stated that the cheque was found missing in between 27th and 28th of February, 2008 and it was discerned only after a day. Thus, the story of the Petitioner, that he wrote to the SHO of the concerned police station, in the year 2007, about the theft of the cheque, therefore, falls to the ground.
10. The Trial Court as well as the Appellate Court, rightly held that the defence of the Petitioner was unbelievable.
11. Another contention of the Petitioner, is that the Respondent could not establish any legally enforceable debt or liability, as admittedly he is not an Income Tax payee, whereas Section 269 SS of the Income Tax Act mandates that any loan or deposit of more than Rs. 20,000/- is to be made by account payee cheque or bank draft. It was urged that the Respondent could not establish the source of the funds and it is really doubtful that such huge amount of loan was given to the Petitioner without any documentation.
12. Both the courts below have, justifiably, held that the provisions of Section 269 SS of the Income Tax Act does not help the Petitioner as he did not cross examine the Respondent about the source of his income or his financial strength. Since friendly loan was given, the Respondent did not prepare any d
