Presumption under Sections 118(a)/139 NI Act rebutted by probable defence evidence that cheque was security for shop 'Pagri' payable only on possession delivery, which failed; unregistered long-term lease reduces to monthly tenancy provable orally.

Judgment :

Rakesh Kainthla, J.

The present appeal is directed against the judgment dated 18.01.2024 passed by learned Additional Sessions Judge (I), Mandi, District Mandi, H.P. (learned Appellate Court), vide which the judgment of conviction dated 24.04.2012 and order of sentence dated 27.04.2012 passed by learned Judicial Magistrate First Class, Court No.2, Mandi, District Mandi, H.P. (learned Trial Court) were set aside. (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the Negotiable Instruments Act (hereinafter referred to as ‘NI’ Act). It was asserted that the accused issued a cheque of
Rs. 2,00,000/- in favour of the complainant to discharge his legal liability. The complainant presented the cheque to the Punjab National Bank, but it was dishonoured with an endorsement that ‘payment was stopped by the drawer’. The complainant sent a legal notice to the accused, which was duly served upon him. The accused failed to repay the amount to the complainant despite the receipt of the notice, hence the complaint was filed before the learned Trial Court for taking action as per the law.

3. Learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried.

4. The complainant examined Krishana Devi (CW1) and himself (CW2) to prove his complaint.

5. The accused, in his statement recorded under Section 313 of Cr.PC stated that the cheque was given as security, the deal regarding the cheque was not completed, the cheque was presented without the completion of the deal, without informing him, he had made an application to the bank to stop the payment, and he had not received any notice from the complainant.

6. Statements of Sukh Dev Singh (DW1), Laxman (DW2) and accused Tarun Mahajan (DW3) were recorded in defence.

7. Learned Trial Court held that the accused admitted the issuance of the cheque, and a presumption arose that the cheque was issued for consideration to discharge the debt/liability. The burden shifted upon the accused to rebut the presumption. The accused set up a compromise (Mark A) to prove his innocence, however, the compromise was not proved as per the law. This compromise was also not put to the complainant in his cross- examination. The accused admitted that the cheque was dishonoured because he had instructed the bank to stop the payment. The notice was duly sent to the accused at the correct address and is deemed to be served. The accused failed to repay the amount; hence, the learned Trial Court convicted the accused of the commission of an offence punishable under Section 138 of the NI Act and sentenced him to undergo simple imprisonment for one month, pay a fine of Rs. 2,75,000/- and, in default of payment of fine, to undergo further simple imprisonment for seven days. It