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January 21, 2023

The borrower is still subject to prosecution and criminal punishment for dishonouring the check

by CA Shivam Jaiswal in Corporate Law

The borrower is still subject to prosecution and criminal punishment for dishonouring the check

Fact and issue of the case

The factual matrix leading to the case of complainant can be stated in nutshell to the effect that on 07.02.2010 accused has approached the complainant and requested to give hand loan of Rs.2,00,000 /-, which was required for his contract work. The complainant has gave Rs.2,00,000 /- on assurance of accused that he will return the same within 9 months. The accused in order to discharge the said debt has issued Cheque bearing No.130702 dated 07.12.2010 drawn on Alahabad Bank, Vijayapura. The complainant presented the said Cheque for collection on 27.01.2011 and the same was dishonoured for want of sufficient funds vide bank endorsement dated 28.01.2011. On intimating the said fact to the accused, the accused has requested to represent the Cheque after 20 days. The complainant has represented the Cheque on 28.02.2011 through his Banker State Bank of India, Treasury Bank, Vijayapura. The same was again dishonoured with endorsement of insufficient funds vide memo of Bank dated 01.03.2011. The complainant has issued Demand Notice on 14.03.2011. The wife of accused has received the notice on 16.03.2011. However, the accused has neither replied to the notice nor paid the money covered under the Cheque. The complaint is filed on 29.04.2011.

In response to the summons, the accused has appeared through counsel and contested the case. The complainant in order to prove his case relied on the oral evidence of PW1 and the documents as per Exs.P1 to Ex.P6. The accused has examined himself as DW1 and relied on the document as per Ex.D1. The Trial Court after having heard the arguments of both sides has acquitted the accused from the charge leveled against him for the offence under Section 138 of N.I. Act.

The appellant/complainant has challenged the correctness and legality of the said judgment of acquittal contending that non-mentioning of date as to when money was given cannot be fatal to the case of complainant. The Trial Court was not justified in doubting the loan transaction by invoking Section 269-SS of Income Tax Act and committed serious error in recording the finding that it is not legally enforceable debt. The accused has never questioned financial capacity of complainant in lending the money. The claim of accused that Cheque as per Ex.P1 was given as security and there was no cause of action brought on record during the course of cross- examination of PW1 is not supported by any evidence on record. The approach and appreciation of oral and documentary evidence by the Trial Court is contrary to law and evidence on record. Therefore, prayed for allowing the appeal and to convict the accused for the charge leveled against him.

In response to the notice of appeal, respondent has appeared through his counsel.

The trial Court records have been secured.

Heard the arguments of both sides

Observation of the court

There cannot be any dispute with regard to proposition of law laid down by the Hon’ble Supreme Court in the said decision. The appellate Court in terms of Section 386(a) of Cr.P.C., has to re-appreciate the evidence on record, reverse such order and direct that further enquiry be made, or that the accused be re-tried or committed for trial, as the case may be, or find him guilty and pass sentence on him according to law. In the above referred decision of Hon’ble Supreme Court also, it has been only held that the appellate Court should be cautious in appreciating the evidence, where the appeal is against the judgment of acquittal, since the accused is enjoying the benefit of double presumption of innocence. In the present case, the accused by way of rebuttal evidence has failed to probablize his defence to disprove the statutory presumption available in favour of the complainant in terms of Sections 118 and 139 of N.I. Act. The failure of the accused to place rebuttal evidence or the defence being found to be not legally sustainable in law, then it will have to be held that the complainant has proved the charge leveled against the accused for the offence under section 138 of N.I. Act.

The question now remains is imposition of sentence. Looking to the facts and circumstances of the case, if the accused is sentenced to pay fine of 22,00,000/- in default of payment of fine shall undergo imprisonment for three months is imposed would meet the ends of justice. Consequently, proceed to pass the following:

ORDER

The appeal filed by the appellant/complainant is hereby allowed.

The judgment of acquittal passed by II Additional Civil Judge & JMFC-II, Vijayapura in CC No.1527/2012 dated 06.07.2020 is hereby set aside.

The accused is convicted for the offence under Section 138 of N.I. Act and sentenced to pay fine of 22,00,000/- in default of payment of fine shall undergo imprisonment for three months.

The Registry is directed to send the copy of judgment and the Trial Court Records to the Trial Court.

Read the full order from here

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Conclusion

The tribunal has ruled in favour of the assessee and dismiss the appeal.

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