Case Note & Summary
The appellant, M/s. Ajmera Housing Corporation, a partnership firm, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the respondent, Mr. Ramachandra, alleging dishonour of a cheque for Rs. 2,50,00,000/- issued by the respondent towards discharge of a liability. The cheque was presented and returned unpaid with the endorsement 'funds insufficient'. After issuing a legal notice and non-payment, the complainant filed the complaint. The trial court acquitted the accused on 22.02.2018 in C.C.No.5779/2017. The complainant appealed under Section 378(4) Cr.P.C. The High Court re-appreciated the evidence and held that the complainant had proved the issuance of the cheque and the signature of the accused, thereby raising the presumption under Section 139 of the N.I. Act that the cheque was issued for a legally enforceable debt. The accused did not rebut this presumption by leading any evidence or cross-examining the complainant's witness effectively. The trial court's acquittal was based on surmises and not on evidence. The High Court set aside the acquittal and convicted the accused under Section 138 of the N.I. Act, sentencing him to pay a fine of Rs. 2,50,00,000/- with default sentence.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Rebuttal - The complainant proved issuance of cheque and signature of accused, raising presumption of legally enforceable debt. The accused failed to rebut the presumption by preponderance of probabilities. Held that the trial court erred in acquitting the accused. (Paras 2-10) B) Criminal Procedure Code - Appeal against acquittal - Section 378(4) - Scope - The appellate court can re-appreciate evidence and interfere if the trial court's view is perverse or unreasonable. Held that the trial court's acquittal was based on surmises and not on evidence. (Paras 1, 10)
Issue of Consideration
Whether the trial court was justified in acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881, despite the presumption under Section 139 of the Act and the accused's failure to rebut it.
Final Decision
The High Court allowed the appeal, set aside the judgment of acquittal dated 22.02.2018 passed by the XLII A.C.M.M., Bengaluru in C.C.No.5779/2017, and convicted the respondent/accused for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The accused was sentenced to pay a fine of Rs. 2,50,00,000/- (Rupees Two Crore Fifty Lakhs only) and in default of payment, to undergo simple imprisonment for a period of six months.
Law Points
- Presumption of legally enforceable debt under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption by accused
- Standard of proof in appeal against acquittal under Section 378(4) Cr.P.C.
