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IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. MALA, J.
Rames – Appellant
Versus
K. Sundar – Respondent
Crl. A. No. 506 of 2006
Decided On : 19-03-2015
Negotiable Instruments Act - Hire Purchase Agreement - Sections 118, 139 - The court discussed the presumption under Sections 118 and 139 of the Negotiable Instruments Act and its application in the case. The court highlighted the importance of admitting the issuance of cheques and the signature as grounds for invoking the presumption. The court also emphasized that the presumption is rebuttable and the accused must prove their defense by preponderance of probabilities.
Fact of the Case:
The appellant, a managing partner of a partnership firm, filed a complaint against the respondent's wife for defaulting on a hire purchase agreement. The respondent, as a guarantor, issued two cheques to discharge the debt, which were returned due to insufficient funds. The trial court acquitted the accused, but the appellant appealed, arguing that the presumption under the Negotiable Instruments Act was not rebutted.
Finding of the Court:
The court found that the respondent failed to rebut the presumption under the Negotiable Instruments Act. The court noted that the issuance of cheques and the respondent's admission of liability supported the appellant's case. The court held that the trial court's judgment of acquittal was perverse and set it aside, convicting the respondent under Section 138 of the Negotiable Instruments Act.
Issues: The main issue was whether the respondent successfully rebutted the presumption under the Negotiable Instruments Act, and whether the trial court's judgment of acquittal was justified.
Ratio Decidendi: The court emphasized the importance of admitting the issuance of cheques and the signature as grounds for invoking the presumption under the Negotiable Instruments Act. The court also highlighted that the presumption is rebuttable and the accused must prove their defense by preponderance of probabilities.
Final Decision: The court allowed the appeal, set aside the judgment of acquittal, and convicted the respondent under Section 138 of the Negotiable Instruments Act.
1. This Criminal Appeal arises out of the judgment of acquittal dated 14.03.2006 made in C.C.No.364 of 2002 on the file of the learned Judicial Magistrate No.I, Salem.
2. The appellant is the Managing Partner of a partnership firm. The respondent's wife borrowed money from the appellant for a sum of Rs.1,75,000/- by entering into Hire Purchase Agreement/Ex.P.1 to purchase a lorry bearing Registration No.TCS 6694. The respondent executed the said hire purchase agreement as guarantor. Since, the respondent's wife failed to repay the dues, the appellant filed a complaint on 14.07.2001 against her and FIR was registered at Kitchipalayam Police Station. During the enquiry, the respondent undertook to repay the dues and he issued two cheques, namely, Ex.P.2 dated 10.10.2001 for a sum of Rs.60,000/- and Ex.P.3 dated 15.10.2001 for a sum of Rs.75,000/- respectively in favour of the appellant towards discharge of the said admitted debt. When the said cheques were presented for encashment, it was returned as “insufficient funds” as per Ex.P.4 to E.P.7. So the appellant/complainant on 28.10.2001 issued Ex.P.8 statutory notice to the respondent under Section 138 of Negotiable Instruments Act, which was acknowledged by Ex.P.9 and the respondent has given a reply/Ex.P.10. Even though the respondent has given a reply, but he has not repaid the dues. Therefore, the appellant/complainant was constrained to file a private complaint against the respondent/accused under Section 138 of Negotiable Instruments Act.
3. The trial Court has taken cognizance of an offence, after recording the sworn statement and after following the procedure. Since the accused pleaded not guilty, the trial Court examined P.W.1 and Exs.P1 to P13 on the side of the complainant and on the side of the respondent, D.W.1 to D.W.3 were examined and Exs.D1 to D9 were marked. The trial Court after considering the oral and documentary evidence, acquitted the accused for the offence under Section 138 of Negotiable Instruments Act.
4. Challenging the judgment of acquittal passed by the trial Court, learned counsel for the appellant/complainant submitted that the respondent's wife has obtained a loan under hire purchase agreement/Ex.P.1 for Rs.1,75,000/- on 28.08.1996 for a sum of Rs.1,75,000/- to purchase a lorry bearing No. TCS 6694. Since, she was irregular in payment, the amount due is Rs.1,83,800/-. Since the vehicle was not in a moving condition, for removal of tyres and engine, he has given a complaint before the Kitchipalayam Police Station on 14.07.2001, which was taken as C.S.R.No.136 of 2001. When the enquiry was conducted on 15.07.2001, the matter was compromised and the respondent herein has agreed to pay a sum of Rs.1,35,000/- and he has issued two cheques/Ex.P.2 and Ex.P.3. dated 10.10.2001 and 15.10.2001 respectively. On 01.10.2001 the respondent issued a notice/Ex.D.5 and the appellant sent a reply/Ex.D.6 dated 16.10.2001. The two cheques/Ex.P.2 and Ex.P.3 were presented for encashment and that has been returned as “insufficient funds” as per Ex.P.4 to Ex.P.7. The appellant issued statutory notice/Ex.P.8 on 28.10.2001 and the respondent sent a reply/Ex.P.10 on 07.11.2001 and the respondent's wife has also sent a reply/Ex.P.13. The Trial Court has acquitted the respondent stating that the respondent herein has probablised his defence that the cheque has been obtained under force and coercion and there is no evidence to show that the cheque was issued for discharging legally subsisting liability. But the above factum is not correct. Once the issuance of cheque and the signature in the cheque has been admitted, the appellant is entitled to invoke presumption under Sections 118 and 139 of Negotiable Instruments Act. Even though it is a rebuttable presumption, the presumption has not been rebutted. Merely because the cheques/Ex.P.2 and Ex.P.3 were obtained in the Police Station which will not amount to that the cheques have been obtained by force and coercion and
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