Case Note & Summary
The appellant, Smt. Sumedha Chaudhari, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the respondent-accused, Shirishkumar Laddha, alleging dishonour of a cheque for Rs.35,000/-. The complainant claimed that she had given a hand loan of Rs.35,000/- to the accused on 03/07/1999, and the accused issued a cheque dated 10/01/2006 towards repayment. The cheque was dishonoured upon presentation. The accused admitted his signature on the cheque but denied writing the contents, suggesting that the cheque was given in 1999 and misused by the complainant. The trial court acquitted the accused, holding that the cheque must have been given in 1999 and the complainant misused it by filling in details. The complainant appealed to the High Court. The High Court examined the evidence, including the complainant's testimony and the summary suit filed for recovery of Rs.66,000/-. The court noted that the accused admitted his signature, raising the presumption under Section 139 of the N.I. Act that the cheque was issued for a legally enforceable debt. The accused failed to rebut this presumption, as he did not provide any evidence to support his claim that the cheque was misused. The High Court held that the trial court's reasoning was based on conjectures and not on evidence. The court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the N.I. Act. The accused was sentenced to pay a fine of Rs.50,000/-, with Rs.45,000/- to be paid as compensation to the complainant, and in default, to undergo simple imprisonment for three months.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Legally Enforceable Debt - The complainant proved the hand loan of Rs.35,000/- and the issuance of cheque by the accused. The accused admitted his signature but denied the handwriting of the contents. The trial court acquitted the accused on the ground that the cheque might have been misused. Held: The presumption under Section 139 is in favour of the complainant and the accused failed to rebut it. The acquittal was set aside and the accused was convicted. (Paras 1-10) B) Evidence - Hand Loan - Proof - The complainant's evidence regarding the hand loan was consistent and corroborated by the cheque and the summary suit filed for recovery. The accused's denial of the loan was not supported by any evidence. Held: The hand loan was proved and the cheque was issued towards repayment. (Paras 2-8)
Issue of Consideration
Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881, that the cheque was issued for a legally enforceable debt, stands rebutted by the accused, and whether the acquittal by the trial court was correct.
Final Decision
The appeal is allowed. The judgment of acquittal dated 23/09/2008 passed by the 5th J.M.F.C., Nagpur is set aside. The accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. He is sentenced to pay a fine of Rs.50,000/-. Out of that, Rs.45,000/- shall be paid to the complainant as compensation. In default of payment of fine, the accused shall undergo simple imprisonment for three months.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Burden of proof
- Legally enforceable debt
- Hand loan
- Cheque dishonour
