Case Note & Summary
The case involves a criminal revision petition filed by the accused, Gabriel Peter D'Souza, challenging his conviction under Section 138 of the Negotiable Instruments Act, 1881, for dishonour of a cheque. The complainant, Cirila Rosa Maria Pinto, alleged that the accused entered into an agreement dated 29 March 1997 for development of her property, for which he paid Rs.1,25,000 and was liable to pay Rs.18,75,000 in five instalments. The last instalment was due on 30 September 1997. The complainant claimed that the accused issued a cheque dated 19 April 2000 for Rs.13,00,000, which when presented was returned with the remark 'payment stopped by drawer' on 11 July 2000. The complainant sent a legal notice dated 24 July 2000 by registered post, which was returned unclaimed. The accused did not pay the amount, leading to the complaint. The trial court convicted the accused, and the Sessions Judge upheld the conviction. In revision, the accused argued that the cheque was not issued for a legally enforceable debt because the complainant had breached the development agreement. The High Court held that the issuance of the cheque and its dishonour due to stop payment were proved. The court noted that the notice sent by registered post to the correct address was deemed served even if returned unclaimed. The presumption under Section 139 of the Act that the cheque was issued for a legally enforceable debt was not rebutted by the accused. The court found that the accused's defence was not credible and that the conviction was correct. The revision petition was dismissed.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Stop Payment - Section 138 - Issuance of cheque and its dishonour due to stop payment instruction constitutes an offence under Section 138 of the Negotiable Instruments Act, 1881, provided the cheque was issued for a legally enforceable debt or liability. The court held that the accused's instruction to stop payment does not absolve him of liability if the cheque was issued in discharge of a debt. (Paras 1-10) B) Negotiable Instruments Act - Notice - Deemed Service - Section 138 - A notice sent by registered post to the correct address of the accused is deemed to be served even if returned unclaimed, as the accused cannot avoid liability by refusing to accept the notice. The court held that the complainant complied with the notice requirement. (Paras 3-5) C) Negotiable Instruments Act - Presumption of Debt - Section 139 - Once the issuance of the cheque and its dishonour are proved, a presumption arises under Section 139 that the cheque was issued for a legally enforceable debt. The burden shifts to the accused to rebut this presumption. The court held that the accused failed to rebut the presumption. (Paras 6-8)
Issue of Consideration
Whether the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881, for issuing a cheque that was dishonoured due to stop payment instruction, is sustainable when the accused claims the underlying agreement was breached by the complainant.
Final Decision
The High Court dismissed the revision petition and upheld the conviction and sentence imposed on the accused under Section 138 of the Negotiable Instruments Act, 1881.
Law Points
- Stop payment instruction amounts to dishonour under Section 138 NI Act
- Notice sent by registered post to correct address deemed served even if returned unclaimed
- Presumption of legally enforceable debt under Section 139 NI Act
- Burden on accused to rebut presumption
