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IN THE HIGH COURT OF JUDICATURE AT MADRAS
G. JAYACHANDRAN, J.
Raja Gounder - Appellant
Versus
C. Palanisami & Others - Respondent
Crl.R.C. No. 478 of 2014 & Crl.R.C. No. 978 of 2016
Decided On : 22-06-2022
Cheque Dishonour - Negotiable Instruments Act - Section 138, Section 139 - The court analyzed the agreement between the parties and the guarantee letter to determine the nature of the transaction and the enforceability of the debt. The accused successfully rebutted the presumption under Section 139 by establishing that the money paid was towards the screening right of the film and not a loan as alleged in the complaint.
Fact of the Case:
The case involved the dishonour of cheques issued by the accused to the complainant for a purported loan. The accused claimed that the transaction was not a loan but payment towards the screening right of a film.
Finding of the Court:
The Trial Court's reasoning and findings were upheld, concluding that the accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act. The Appellate Court's judgment was deemed perverse for not appreciating the evidence and applying the correct law.
Issues: The main issue was to determine the nature of the transaction and whether the accused had rebutted the presumption under Section 139 of the Negotiable Instruments Act.
Ratio Decidendi: The accused successfully rebutted the presumption under Section 139 by establishing that the money paid was towards the screening right of the film and not a loan as alleged in the complaint.
Final Decision: The Appellate Court's judgment was set aside, and the Trial Court's order of acquittal was restored and confirmed. The accused was acquitted, and the revision petitions were allowed.
JUDGMENT
(Prayer in Crl.R.C. No. 478 of 2014: Criminal Revision Case is filed under Section397 read with 401 of Cr.P.C., to call for the records pertaining to the judgment dated 06.01.2014 in C.A.No.122 of 2012 on the file of the Learned II Additional Sessions Judge, Salem in S.T.C.No.219 of 2009, Judicial Magistrate No.2, Salem by exercising revision petition and set aside the same and pass order.
Crl.R.C. No. 978 of 2016: Criminal Revision Case is filed under Section397 read with 401 of Cr.P.C., to call for the records pertaining to the judgment dated 06.01.2014 in C.A.No.122 of 2012 on the file of the Learned II Additional Sessions Judge, Salem in S.T.C.No.218 of 2009, Judicial Magistrate No.2, Salem by exercising revision petition and set aside the same and pass order.)
Common Order
1. The revision petitioner and the respondents in these two criminal revision petitions are one and the same. The subject matter of the revision petitions is dishonour of cheques purportedly issued by the revision petitioner in favour of the respondents to discharge the loan.
2. The case of the complainant is that, the accused purchased the film HOST for 10% commission basis. The complainant sold the distribution right to one AKR Film Distributors. The accused advanced Rs.1,70,000/- for purchase of that movie and for balance, the accused borrowed from him Rs.4,00,000/- on different dates and gave 4 cheques for Rs.1,00,000/- each. He paid only one lakh and got back one cheque. The remaining cheques when presented for collection, same got bounced. Hence after statutory notice, private complaint under section138 of Negotiable Instruments Act, 1881 filed and numbered asS.T.C.No.219/2009 on the file of Judicial Magistrate No. II, Salem, for dishonouring cheque bearing No.LKB 008682 dated 20/11/2007 for Rs.1,00,000/-and S.T.C.No.218 of 2009 filed for dishonour of two cheques bearing Nos.008683dated 20/12/2007 and 008684 dated 20/01/2008 each for Rs.1,00,000/-.
3. The accused took a defence that, the alleged transaction is not true. The complainant had misused the cheques left in the office of ARK Films Distributors which shares common office with the accused at Salem. In fact, the distribution right of the said film “THE HOST” was purchased by the accused from M/s.Scorpio Screens. The accused entered into an agreement with the complainant on 22/08/2007 wherein the complainant had paid Rs.4,00,000/- and agreed to pay 10% commission. Suppressing the real fact and the agreement, since the movie did not run as expected and earned profit, to make good his loss the complainant has misused the cheques not given to him for any discharge of enforceable debt.
4. To prove his defence, during the cross examination of the complainant, the accused marked 2 documents as defence exhibits. Ex.D-1 the agreement dated 22/08/2007 entered between the complainant and the accused.Ex.D-2, the hand written account slip by the complainant.
5. To counter this defence, the complainant had relied upon the Guarantee letter dated 09/09/2007 signed by the accused, wherein the liability ofRs.4,00,000/- and issuance of 4 cheques drawn by the accused in favour of the complainant with date and amount mentioned. The witness to this document also examined on behalf of the complainant.
6. The Trial Court while holding that the signatures in the cheques are admitted by the accused and also he admits that it is drawn from the account maintained by him. Therefore, the fundamental burden has been discharged by the complainant and the accused is cast upon the burden to discharge the statutory presumption that the cheque was not issued for legally enforceable debt. For the said purpose, the Trial Court has analysed the Agreement Ex.D-1 dated22/08/2007 entered between the accused and the complainant and the guarantee letter dated 09/09/2007.
7. The agreement dated 22/08/2007 was marked during the cross examination of the complainant (P.W-1). He had admitted it as true and valid. he recital of the agreemen
The accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act by establishing the nature of the transaction, influencing the court's decision in setting aside ....
The main legal point established is the reliance on the presumption conferred by the Negotiable Instruments Act, 1881, and the requirement for the accused to substantiate their defense against the pr....
The presumption of debt under Section 139 of the N.I. Act requires the accused to rebut the presumption to avoid conviction under Section 138.
Failure to rebut the presumption under Section 139 of the N.I. Act and lack of presenting a probable defense can lead to conviction under Section 138 of the N.I. Act.
The presumption of a legally enforceable debt under Sections 138 and 139 of the N.I. Act is strong and requires evidence to the contrary by the accused, which was not provided.
The legal presumption under Section 139 of the Negotiable Instruments Act favored the respondent, and the petitioners' failure to rebut the presumption led to their conviction and sentencing.
The burden of proof on the accused to disprove the existence of any legally recoverable debt or liability under the Negotiable Instruments Act.
When a complainant discharges their initial burden under Sections 138 and 139 of N.I. Act, presumptions in their favor come into play, which can be rebutted by preponderance of probabilities.
A signed blank cheque, validly handed over by the accused, attracts the presumption under Section 139 of the Negotiable Instruments Act, unless the accused provides evidence to the contrary. The burd....
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