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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Deepak Gupta, J.
HDFC Bank Ltd. - Applicant- appellant - Appellant
Versus
Mohinder Singh - Respondent - Respondent
CRM-A-692-MA of 2014 now treated as CRA-AS-348 of 2023
Decided On : 24-07-2023
NI Act - Dishonored Cheque - Section 138 - Section 139 - Section 118(a) - Section 139 - Section 138 - Section 118 - Section 139 - Section 138
Fact of the Case:
The complainant, HDFC Bank Ltd., filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the accused, Mohinder Singh, for dishonoring a cheque. The accused issued a cheque for an amount of ?2,25,658.08, which was returned due to insufficient funds. The trial court acquitted the accused, but the appellant challenged the acquittal.
Finding of the Court:
The court found merit in the appeal and set aside the acquittal. It held that the complainant proved that the accused issued the dishonored cheque and failed to make payment despite statutory notice. The accused was convicted under Section 138 of the NI Act.
Issues: The issues revolved around the presumption under Section 139 of the NI Act, the burden of proof on the accused to rebut the presumption, and the legal liability of the accused to discharge the debt represented by the dishonored cheque.
Ratio Decidendi: The court emphasized that once the execution of the cheque is admitted, Section 139 of the NI Act mandates a presumption that the cheque was for the discharge of any debt or other liability. The accused has the burden to raise a probable defense and rebut the presumption. The court also highlighted that the accused's statement and actions indicated his legal liability towards the complainant.
Final Decision: The impugned judgment was set aside, and the accused was convicted under Section 138 of the NI Act. The matter was adjourned for hearing the respondent on the quantum of sentence.
DEEPAK GUPTA, J.
CRM-A-692-MA of 2014
This application for grant of leave to appeal under Section 378(4) Cr.P.C is directed against the order dated 19.09.2013 passed by learned Judicial Magistrate Ist Class, Panipat in complaint No.2565 of 2012 titled ‘HDFC Bank Ltd. vs. Mohinder Singh’, whereby the said complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred as `the N.I. Act’) has been dismissed and the respondent-accused was acquitted.
2. Leave granted. On direction to the Registry to assign appeal number, number CRA-AS-348-2023 has been assigned.
CRA-AS-348-2023
3. Trial Court record reveals that as per the allegations made in the complaint, facilities of cash credit limit and the term facility were availed by the accused from the complainant- Bank and in order to discharge his outstanding dues, accused issued Cheque No.202612 dated 01.09.2009 for an amount of ?2,25,658.08 Ex.C1 from his account maintained in Bank of Punjab Ltd., Ambala Cantt. On presentation, the cheque was returned vide memo dated 04.09.2009 Ex.C2 with remarks “Insufficient Funds”. Legal notice dated 22.09.2009 Ex.C3 was sent to the accused asking him to make payment of the cheque amount within 15 days of the receipt of the notice but accused failed to do so, compelling the complainant- Bank to approach the Court.
4. Trial Court record reveals that after recording preliminary evidence, accused was summoned to face prosecution under Section 138 of the NI Act. On his appearance, he was charge-sheeted under Section 138 of the NI Act, to which he pleaded not guilty and claimed trial. During proceedings, accused made payment of ?50,000/- on 31.07.2012 and sought time for making balance payment. He did not pay the remaining amount. Evidence of the complainant was concluded. Statement of the accused under Section 313 Cr.P.C was recorded, in which he pleaded that he had already paid the balance amount of ?50,000/- and nothing was outstanding. However, no evidence in defence was adduced. After hearing both the sides, trial Court recorded the acquittal by way of the impugned judgment dated 19.09.2013.
5. Challenging the afore-said acquittal, it is contended by learned counsel for the appellant- complainant that learned trial Court failed to appreciate the fact that accused nowhere disputed signatures on his cheque and so, presumption under Section 139 of the NI Act was available to the complainant, which the accused had to rebut. Learned counsel contends that during proceedings of the complaint, accused made payment of ?50,000/- and undertook to pay the balance amount, which he did not pay and this in itself shows the falsity of the defence taken by the accused; and supports the case of the complainant to the effect that accused had the legal liability to discharge. It is further contended that the learned trial Court failed to advert to this aspect of the matter and wrongly recorded the acquittal.
6. Upon notice, appearance was made on behalf of the respondent through his counsel. However, on 18.07.2023, nobody made appearance on behalf of the respondent. It is despite the fact that intimation to counsel for the respondent was sent through e-mail.
7. Having considered the submissions of learned counsel for the appellant and after perusing the record, I find merit in the appeal.
8. Acquittal has been recorded by learned trial Court by observing that the complainant- Bank had failed to prove the legal liability qua the cheque issued by the accused and further, the execution of the cheque was not proved. It is also revealed that during the cross-examination of CW1, the defence pleaded by the accused was that a security cheque had been issued by him, which had been misused and that he did not have any liability.
9. In Basalingappa Vs. Mudibasappa 2020 SCC OnLine SC 491 referring to various precedents on Section 118(a) and 139 of the Negotiable Instruments Act, Hon’ble Supreme Court summarized the principles as under:
The main legal point established in the judgment is the presumption under Section 139 of the NI Act, the burden of proof on the accused to rebut the presumption, and the requirement for the accused t....
Dishonour of cheque – Accused had to prove by cogent evidence that there was no debt or liability.
The presumption of issuance for repayment under Section 139 of the N.I. Act can be rebutted by the accused with sufficient evidence.
The presumption under Section 139 of the Negotiable Instruments Act mandates that once a cheque's execution is admitted, it is presumed to be for a legally enforceable debt, and the burden to rebut t....
The accused can rebut the presumptions under the NI Act by providing a satisfactory explanation and pointing towards his innocence by the standard of preponderance of probabilities.
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.
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 presumption of liability under Sections 118 and 139 of the N.I. Act is rebuttable, and the accused can create doubt regarding the enforceability of the debt without needing to provide evidence.
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 under Section 139 of the NI Act is rebuttable, transferring the burden to the complainant if sufficient evidence creates doubt in the case.
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