Allowed

Pannalal Jain v. Nohar singh

Chhattisgarh HC7 Sept 2023ACQA/3/2010

Case brief

AI extract

What is this about?

The High Court set aside the trial Court's acquittal in a Section 138 appeal. Holding that the complainant proved issuance of cheques for debt discharge and the accused failed to rebut Section 139 presumptions (especially after admitting giving blank cheques), the Court convicted the accused and sentenced them to a fine and imprisonment in default.

What did the court decide?

Impugned judgment of acquittal set aside; Respondent held guilty under Section 138; sentenced to fine of Rs. 3 lacs or imprisonment for two years in default.

Pannalal Jain Vs Nohar singh — Cheque Dishonour | Chhattisgarh HC (2023)

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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Order Reserved on 14/06/2023

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Order passed on _07/09/2023

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ACQA No. 03 of 2010

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Pannalal Jain, S/o Late Pukhraj Jain, aged about 43 years, R/o Gawalipara, Durg, Police Station City Kotwali, Durg, Distt. Durg (CG)

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---- Appellant/complainant

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-Versus-

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Nohar Singh, S/o Kripal Singh, aged about 43 years, R/o Ward No.2, Shiv Nagar, House No.210, Durg, Police Station – Durg, City Kotwali, Durg, Distt. Durg (CG)

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---- Respondent/accused

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For Appellant : Mr. Ali Afzal Mirza, Advocate For Respondent : Mr. Raj Kumar Gupt a, Advocate.

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Hon'ble Mrs. Justice Rajani Dubey, J C.A.V. ORDER

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1 . Heard on admission.

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2 . The appeal is admitted for hearing.

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3 . With the consent of the parties, the matter is heard finally.

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4 . Challenge in the present appeal is to the judgment dated 5.10.2009 passed by Judicial Magistrate First Class, Durg in Criminal Case No. 85/2009 acquitting the respondent/accused of the charge under Section 138 of Negotiable Instruments Act.

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5 . The averments made in the complaint, in brief, are that the appellant/complainant and the respondent/accused have old acquaintance and therefore, the respondent borrowed a sum of Rs.3 lacs from the appellant to meet his personal requirements and in discharge of the said liability, the respondent gave two cheques to

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the appellant i.e. Cheque No.059201 amounting to Rs. 1 lac and Cheque No. 059202 amounting to Rs. 2 lacs dated 19.10.2006 of State Bank of India, Branch-Malviya Nagar, Durg. However, the said cheques being presented by the appellant before his bank i.e. Dena Bank, Branch-Mohan Nagar, Durg, for encashment, the same stood dishonoured due to insufficient fund in the account of the respondent and intimation to this effect was sent to the appellant by Dena Bank through Memo dated 9.11.2006. Thereafter, the appellant orally informed the respondent about dishonour of his cheques but the respondent did not pay him the cheque amount. Hence the appellant sent a registered legal notice through his advocate to the respondent which was received by him on 14.11.2006 but even thereafter the respondent did not return the aforesaid amount to the appellant. Therefore, the appellant filed a complaint case under Section 138 of the Negotiable Instruments Act (in short “NI Act”) against the respondent.

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6 . The trial Court considering the evidence of the respective parties by the impugned judgment dated 5.10.2019 acquitted the respondent/accused of the charge.

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7 . Learned counsel for the appellant submits that the impugned judgment dated 5.10.2019 passed by the learned trial Court is unreasonable and arbitrary and therefore, liable to be set aside. Learned trial Court dismissed the complaint filed by the appellant on the ground that he could not prove his case beyond reasonable doubt which is against the provisions of the NI Act. Learned trial Court has wrongly relied upon the statement of the accused that he has not entered into any transaction with the appellant and that the

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appellant misused the blank cheques issued to his son Manish Jain. While passing the impugned judgment, learned trial Court has only relied upon the oral statement of the accused and did not appreciate the documentary evidence of the appellant. Learned trial Court has failed to draw presumption available under Section 118 of the NI Act which says that the Court is obliged to presume, until contrary is proved, that the promissory note was made for consideration. Learned trial Court has also failed to draw presumption under Section 146 of the NI Act against the accused, according to which the Court shall, in respect of every proceeding under this Chapter, on production of bank's slip or memo having thereon the official mark denoting that the cheque has been dishonoured, presume the fact of dishonour of such cheque, unless and until such fact is disproved. For all these reasons, the impugned judgment of acquittal is liable to be set aside and the respondent is liable to be held guilty under Section 138 of NI Act and punished accordingly.

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Reliance has been placed on the decision of the Hon’ble Apex Court

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in the matter of Krishna Janardhan Bhat Vs. Dattatraya G. Hegde, (2008) 4 SCC 54 .

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8 . On the other hand, learned counsel for the respondent/accused has supported the impugned judgment and submits that the learned trial Court considering all the relevant aspects of the matter in light of the overall evidence adduced by the parties has rightly acquitted the respondent of the charge under Section 138 of NI Act and as such, no interference is called for in the impugned judgment.

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9 . Heard learned counsel for the parties and perused the impugned judgment and other material available on record.

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10. Before the learned trial Court, the appellant/complainant examined himself in support of his complaint and respondent/accused also examined one witness Mohd. Fattah Alam @ Lallu Khan. Complainant Pannalal Jain (CW-1) supported the complaint in his statement and filed documents Ex.P/1 and P/2 i.e. cheques in question, Ex.P/3 & P/4 i.e. deposit slips of the said cheques; Ex.P/5 & P/6 i.e. Memo issued by the bank regarding dishonour of these cheques; Ex.P/7 i.e. postal receipt and Ex.P/8 i.e. acknowledgment of the accused. The respondent/accused has admitted the fact in his statement of accused that he gave blank cheques to Manish Jain, son of the complainant, which were misused by the complainant. He also states in reply to question No.6 that he sent reply through his advocate but he did not file any copy of such reply or its acknowledgment of the complainant. Defence witness Mohd. Fattah Alam also states that the accused had money transaction with Manish Jain and he signed on the promissory note as a witness but the accused did not file any such promissory note in support of his defence. The complainant has duly proved the cheques which were not denied by the accused and the bank account has also not been denied by the accused.

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11. Learned trial Court observed in para 14 of the impugned judgment that the complainant did not file Memo of the State Bank of India and has not proved his case beyond reasonable doubt. However, it is clear from the documents Ex.P/3 & P/4 that the complainant submitted the said cheques in Dena Bank which got dishonoured due to insufficient fund vide Memo Ex.P/5 & P/6 issued by the said bank.

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12. The Hon’ble Supreme Court in the matter of Krishna Janardhan

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Bhat (supra) held in paras 39 & 40 as under:

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“39. In K. Prakashan v. P.K. Surenderan [2007 (12) SCALE 96], this Court following M.S. Narayana Menon, (2006) 6 SCC 39 opined:

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13[12]. The Act raises two presumptions; firstly, in regard to the passing of consideration as contained in Section 118(a) therein and, secondly, a presumption that the holder of cheque receiving the same of the nature referred to in Section 139 discharged in whole or in part any debt or other liability. Presumptions both under Sections 118(a) and 139 are rebuttable in nature. Having regard to the definition of terms ‘proved’ and ‘disproved’ as contained in Section 3 of the Evidence Act as also the nature of the said burden upon the prosecution vis-`a-vis an accused it is not necessary that the accused must step into the witness box to discharge the burden of proof in terms of the aforementioned provision.

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14[13]. It is furthermore not in doubt or dispute that whereas the standard of proof so far as the prosecution is concerned is proof of guilt beyond all reasonable doubt; the one on the accused is only mere preponderance of probability.

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In John K. John V. Tom Varghese, [2007 (13) SC 222], this Court held:

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“11[10]. The High Court was entitled to take notice of the conduct of the parties. It has been found by the High Court as of fact that the complainant did not approach the court with clean hands. His conduct was not that of a prudent man. Why no instrument was executed although a huge sum of money was allegedly paid to the respondent was a relevant question which could be posed in the matter. It was open to the High Court to draw its own conclusion therein. Not only no document had been executed, even no interest had been charged. It would be absurd to form an opinion that despite knowing that the respondent was not even in a position to discharge his burden to pay instalments in respect of the prized amount, an advance would be made to him and that too even after institution of three civil suits. The amount advanced even did not carry any interest. If in a situation of this nature, the High Court has arrived at a finding that the respondent has discharged his burden of proof cast on him under Section 139 of the Act, no exception thereto can be taken.”

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13. In this case also, the complainant proved his case by oral and documentary evidence and the accused also admitted the account number and cheques of his bank and did not file any promissory note as stated by the defence witness. The accused also did not file any reply to the legal notice. Thus, the accused has failed to rebut the presumption under Section 139 of the NI Act.

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14. The Hon’ble Supreme Court in the matter of M/s Kalamani Tex and another Vs. P. Balasubramanian, (2021) 5 SCC 283 held in para 18 as under:

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“18. Even if we take the arguments raised by the appellants at face value that only a blank cheque and signed blank stamp papers were given to the respondent, yet the statutory presumption cannot be obliterated. It is useful to cite Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, 36 where this court held that:

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“Even a blank cheque leaf, voluntarily signed and handed over by the accused, which is towards some payment, would attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt.”

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15. On the basis of aforesaid discussions, the findings recorded by the trial Court are not in accordance with law. In case of NI Act, the complainant has only to prove the fact that the cheque in question was issued by the accused in discharge of any debt or liability to the complainant and under Section 139 of the Act, it shall be presumed that the holder of the cheque received the cheque of the nature referred to in Section 138 of the Act for discharge, in whole or in part, or any debt or other liability. In the given set of evidence and the facts and circumstances emerging in the case, the findings recorded by the learned trial Court are not in accordance with law. As such,

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the impugned judgment being not sustainable in law is liable to be set aside.

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16. In the result, the acquittal appeal stands allowed. The impugned judgment passed by the learned trial Court dated 5.10.2009 is hereby set aside. The respondent/accused is held guilty under Section 138 of the Act and is sentenced to pay a fine of Rs. 3 lacs, in default thereof to suffer RI for two years. The fine amount so deposited by the respondent/accused shall be payable to the

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appellant/complainant.

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Sd/ (Rajani Dubey) Judge

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Khan

Pannalal Jain v. Nohar singh

Case brief

What is this about?

What did the court decide?

Pannalal Jain v. Nohar singh

Case brief

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