Case Note & Summary
The case involves a criminal appeal filed by the complainant, Damodhar Murlidhar Bajaj, against the acquittal of the accused, Ratan Suryabhan Shinde, by the Judicial Magistrate First Class, Majalgaon, in Criminal Case No. 445 of 2006 under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that he gave a hand loan of Rs. 6,00,000 to the accused on 20.9.2005, and the accused issued a post-dated cheque dated 21.11.2005 drawn on Rajashri Shahu Cooperative Bank, Beed, Branch Majalgaon. The cheque was presented for encashment on 16.3.2006 but was dishonoured. The complainant issued a demand notice, but the accused did not pay. Consequently, the complainant filed a complaint under Section 138 of the Negotiable Instruments Act. During the proceedings, the parties compromised, and the accused issued a fresh cheque No. 051734 dated 1.10.2006 for Rs. 6,00,000. However, this cheque was also dishonoured. The trial court acquitted the accused, holding that the complainant failed to prove that the cheque was issued for a legally enforceable debt. The High Court, in appeal, examined the evidence and the presumption under Section 139 of the Negotiable Instruments Act, which raises a presumption that the cheque was issued for a debt or liability. The court noted that the accused did not lead any evidence to rebut this presumption. The accused merely denied the debt and claimed that the cheque was given as security for a business transaction, but no evidence was produced. The court also considered the compromise and the issuance of a fresh cheque as an acknowledgment of the debt. The High Court held that the trial court's findings were perverse and not based on proper appreciation of evidence. The court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the Negotiable Instruments Act. The accused was sentenced to pay a fine of Rs. 6,00,000, and in default, to undergo simple imprisonment for one year. The court directed that the fine amount be paid as compensation to the complainant.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant alleged that the accused borrowed Rs. 6,00,000 and issued a cheque which was dishonoured. The accused contended that the cheque was given as security for a business transaction and not for a debt. The court held that the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for a legally enforceable debt was not rebutted by the accused, as the accused failed to produce any evidence to support his defence. The court further held that the compromise between the parties and issuance of a fresh cheque in pursuance thereof amounted to an acknowledgment of the debt. (Paras 4-10) B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The accused must lead evidence to rebut the presumption that the cheque was issued for a legally enforceable debt. Mere denial or raising a defence without evidence is insufficient. The court observed that the accused did not examine any witness or produce any document to show that the cheque was not for a debt. Therefore, the presumption stood in favour of the complainant. (Paras 7-9) C) Criminal Procedure Code, 1973 - Appeal against Acquittal - Section 378 - The court, while hearing an appeal against acquittal, can interfere if the findings of the trial court are perverse or based on no evidence. In this case, the trial court's acquittal was set aside as it failed to appreciate the presumption under Section 139 of the Negotiable Instruments Act, 1881 and the effect of the compromise. (Paras 1-10)
Issue of Consideration
Whether the accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for a legally enforceable debt or liability, and whether the acquittal by the trial court was justified.
Final Decision
The appeal is allowed. The judgment and order of acquittal passed by the Judicial Magistrate First Class, Majalgaon, in Criminal Case No. 445 of 2006 is set aside. The accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay fine of Rs. 6,00,000 (Rupees Six Lacs only), in default, to undergo simple imprisonment for one year. The fine amount, if recovered, shall be paid to the complainant as compensation.
Law Points
- Presumption of legally enforceable debt under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption by accused
- Standard of proof in cheque dishonour cases
- Compromise as acknowledgment of debt
