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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
HARPREET SINGH BRAR, J.
Erfan Timber - Applicant
Versus
Balwinder Singh - Respondent
CRM-A No. 208 of 2019
Decided On : 18-01-2024
NI Act - Cheque Bounce - Cr.P.C. - Section 138 - 139 - 118 - 378(4) - 138 - 139 - 118
Fact of the Case:
The applicant-complainant filed a complaint under Section 138 of the Negotiable Instruments Act against the respondent-accused for dishonoring a cheque issued to discharge a debt. The respondent was acquitted by the trial court, and the applicant appealed against the judgment.
Finding of the Court:
The court found that the respondent successfully rebutted the presumption under Section 139 of the NI Act by providing a satisfactory explanation and pointing towards his innocence by the standard of preponderance of probabilities. The court also emphasized the power of the trial court to closely observe the prosecution witnesses and the presumption of innocence in favor of the accused upon acquittal.
Issues: The issues revolved around the dishonor of the cheque, rebuttal of presumptions under Sections 118 and 139 of the NI Act, and the power of the appellate court to interfere with an order of acquittal.
Ratio Decidendi: The court held that the accused can rebut the presumptions under the NI Act by raising a probable defense casting doubt on the existence of the liability, and the appellate court should not disturb the finding of acquittal if two reasonable conclusions are possible based on the evidence.
Final Decision: The court denied the leave to appeal, finding no merit in the application and no perversity or illegality in the trial court's findings.
JUDGMENT :
Harpreet Singh Brar, J.
The present application under Section 378(4) of the Code of Criminal Procedure, 1973 (hereinafter 'Cr.P.C.') is preferred against the impugned judgment of acquittal dated 16.11.2018 passed by learned Judicial Magistrate Ist Class, Yamunanagar at Jagdhri in complaint under Section 138 of the Negotiable Instruments Act (hereinafter 'NI Act').
FACTUAL BACKGROUND
2. Briefly, the facts are that the applicant-complainant engaged in business of timber with the respondent-accused. In July 2016, the respondent placed an order for fuel wood with the applicant amounting to Rs.1,60,925/- against credit memo/bill no. 05 dated 16.07.2016, no. 06 dated 18.07.2016, no. 07 dated 20.07.2016, no. 08 dated 22.07.2016 and no. 09 dated 25.07.2016. To discharge his liability, the respondent issued a cheque bearing no. 353065 dated 17.08.2016 for a sum of Rs.1,60,000/-. On presentation, the cheque was dishnonoured vide memo dated 18.08.2016 with the remarks- 'Exceeds Arrangement.' Thereafter, a legal notice dated 26.08.2016 was issued to the respondent. Since the respondent failed to make the requisite payment, the present complaint was filed on 15.09.2016.
3. On finding a prima facie case against the respondent, the learned trial Court summoned him for having committed an offence punishable under Section 138 of the NI Act. The respondent appeared, secured his bail after which a notice of accusation was served upon him vide order dated 29.09.2017, to which he pleaded not guilty and claimed trial.
4. The complainant examined 2 witnesses to establish its case. Statement of the accused under Section 313 of Cr.P.C. was recorded wherein he denied all the incriminating evidence put to him and pleaded false implication. Subsequently, the respondent-accused was acquitted vide the impugned judgment dated 07.07.2023 as he could successfully rebut the presumption under Section 139 of the NI Act.
CONTENTIONS
5. Learned counsel for the applicant assails the impugned judgment on the ground that the learned trial Court has failed to consider that the signature on the disputed cheque was admitted and presumption under Section 139 of the NI Act has not been rebutted by the respondent-accused. The learned trial Court was erroneously swayed by the fact that no memo/forms were produced on record as the applicant had duly proved the bills showing purchase of the said goods by the respondent. Further, the respondent has not led any evidence to justify the stand taken by him in his statement recorded under Section 313 of the Cr.P.C. thereby failing to rebut the presumptions under Sections 118 and 139 of the NI Act. No explanation is forthcoming on behalf of the respondent regarding the purpose for which the disputed cheque was issued. As such, the learned trial Court has fallen into error by passing the judgment of acquittal in favour of the respondent as the conduct of the respondent satisfies all the ingredients for the offence defined under Section 138 of the NI Act. Reliance in this regard is placed on Sumeet Vij v. M/s Paramount Tech Fab Industries 2021 AIR SC 1281, Uttam Ram v. Devinder Singh Hudan and Another 2020 (1) R.C.R.(Criminal) 110 and K.S. Ranganatha v. Vittal Shetty 2022 (1) R.C.R.(Criminal) 445.
OBSERVATION AND ANALYSIS
6. This Court has heard the learned counsel for the applicant and perused the record with his able assistance.
7. A three Judge bench of the Hon'ble Supreme Court in M/s Gimpex Private Limited v. Manoj Goel 2021 (4) R.C.R.(Criminal) 404 has laid down the ingredients of the offence as defined under Section 138 of the NI Act. Speaking through Justice Dr. D.Y. Chandrachud, the following was observed :
(i) The drawing of a cheque by person on an account maintained by him with the banker for the payment of any amount of money to another from that account;
(ii) The cheque being drawn for the discharge in whole or in part of any debt or other liability;
(iii) Presentati
AI
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 presumption under Section 139 of the Negotiable Instruments Act shifts the burden of proof onto the accused, and the accused can rebut the presumption by adducing evidence showing the reasonable ....
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 main legal point established in the judgment is the presumption under Section 118 and Section 139 of the Negotiable Instruments Act, the burden of proof on the accused to rebut the presumption, a....
The main legal point established in the judgment is the significance of the accused raising a probable defense to rebut the presumption under Section 139 of the N.I. Act, and the requirement for the ....
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
The presumption of debt under Section 139 of the Negotiable Instruments Act is not rebutted by mere denial; the accused must provide credible evidence to support their defense.
The appellate court has the authority to review evidence in acquittal appeals, but must respect the presumption of innocence and ensure that any findings against the accused are based on substantial ....
The presumptions under sections 138 and 139 of the NI Act favor the holder, shifting the burden to the accused to rebut the claims of liability.
The complainant must establish the existence of a legally enforceable debt to sustain a conviction under Section 138 of the Negotiable Instruments Act.
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