Negotiable Instruments Act, 1881 — Sections 118(a), 138 & 139

May 1st, 2013

Negotiable Instruments Act, 1881 — Sections 118(a), 138 & 139 — Acquittal — Justification — Cheque in question claimed to be issued towards repayment of personal loan — Date on which the loan was advanced not mentioned in complaint — Complainant claimed that the accused had assured him that he will return the money within two months for which he had issued a post-dated cheque dated 14.8.2007 — However, the cheque proved to be presented before the bank on the date of issuance itself and on the same date i.e. 14.8.2007, a written memo received by the complainant indicating insufficient fund — Considering said inconsistency, complainant’s case held to be in the realm of grave doubt — Version of the accused that the cheque was issued as security and same was not returned to him and the complainant presented the same to wreak vengeance against him found to be believable — Resultantly, setting aside of conviction by the High Court held to be justified.

(Para 13 to 16, 19 and 26)

HELD: It is, therefore, difficult to appreciate as to why the cheque which even as per the case of the complainant was towards repayment of loan which was meant to be encashed within two months, was deposited on the date of issuance itself. The complainant thus has miserably failed to prove his case that the cheque was issued towards discharge of a lawful debt and it was meant to be encashed on the same date when it was issued specially when the complainant has failed to disclose the date on which the alleged amount was advanced to the Respondent/Accused. There are thus glaring inconsistencies indicating gaping hole in the complainant’s version that the cheque although had been issued, the same was also meant to be encashed instantly on the same date when it was issued.

(Para 13)

Thus, we are of the view that although the cheque might have been duly obtained from its lawful owner i.e. the respondent-accused, it was used for unlawful reason as it appears to have been submitted for encashment on a date when it was not meant to be presented as in that event the respondent would have had no reason to ask for a loan from the complainant if he had the capacity to discharge the loan amount on the date when the cheque had been issued. In any event, it leaves the complainant’s case in the realm of grave doubt on which the case of conviction and sentence cannot be sustained.

(Para 14)

Thus, in the light of the evidence on record indicating grave weaknesses in the complainant’s case, we are of the view that the High Court has rightly set aside the findings recorded by the Courts below and consequently set aside the conviction and sentence since there were glaring inconsistencies in the complainant’s case giving rise to perverse findings resulting into unwarranted conviction and sentence of the respondent. In fact, the trial court as also the first appellate court of facts seems to have missed the important ingredients of Sections 118 (a) and 139 of the N.I. Act which made it incumbent on the courts below to examine the defence evidence of rebuttal as to whether the respondent/accused discharged his burden to disprove the complainant’s case and recorded the finding only on the basis of the complainant’s version. On scrutiny of the evidence which we did to avoid unwarranted conviction and miscarriage of justice, we have found that the High Court has rightly overruled the decision of the courts below which were under challenge as the trial court as also the 1st Appellate Court misdirected itself by ignoring the defence version which succeeded in dislodging the complainant’s case on the strength of convincing evidence and thus discharged the burden envisaged under Sections 118 (a) and 139 of the N.I. Act which although speaks of presumption in favour of the holder of the cheque, it has included the provisos by incorporating the expressions “until the contrary is proved” and “unless the contrary is proved” which are the riders imposed by the Legislature under the aforesaid provisions of Sections 118 and 139 of the N.I. Act as the Legislature chooses to provide adequate safeguards in the Act to protect honest drawers from unnecessary harassment but this does not preclude the person against whom presumption is drawn from rebutting it and proving to the contrary.

(Para 15)

Vijay v. Laxman[Bench Strength 2], Criminal Appeal No. 261/2013 (Arising out of SLP (Crl.) 6761/2010)(07/02/2013), 2013(2) SCALE 368: 2013(2) JT 562: 2013(2) SLT 140: 2013(3) SCC 86 [T.S. Thakur, J.: Gyan Sudha Misra, J.]

Entry Filed under: Judgements,Labour Laws

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