Court’s Decision
The Himachal Pradesh High Court dismissed the criminal revision petition and upheld the conviction and three-month simple imprisonment with compensation under Section 138 of the Negotiable Instruments Act against the petitioner. The Court held that admission of signature on the cheque triggers a presumption under Sections 118 and 139 of the Act, and the accused failed to rebut this presumption through cogent evidence. The Court found no jurisdictional or legal error in the concurrent findings of the lower courts.
Facts
The complainant filed a complaint under Section 138 of the Negotiable Instruments Act alleging that the accused borrowed ₹1,50,000 on 19 May 2014 and ₹3,00,000 on 19 July 2014, issuing post-dated cheques to discharge these liabilities. Both cheques were dishonoured for “insufficient funds,” and despite a statutory notice, payment was not made. The accused admitted issuing the ₹3,00,000 cheque but claimed it was repaid and the complainant had taken blank cheques as security. The trial court convicted the accused, and the appellate court upheld the conviction, leading to the revision petition.
Issues
- Whether the presumption under Sections 118 and 139 of the NI Act can be rebutted by the accused through plausible defence without direct evidence.
- Whether the lower courts erred in convicting the accused despite claims of repayment and the complainant’s alleged failure to prove financial capacity.
- Whether the complainant’s alleged status as a moneylender without registration under the relevant Act invalidates the complaint.
Petitioner’s Arguments
The petitioner argued:
- The amount was repaid, and the complainant misused the security cheques.
- The complainant’s financial capacity to advance such loans was unproven, and the loans were not disclosed in Income Tax returns.
- The complainant was a moneylender without registration, making the complaint invalid.
- The lower courts failed to appreciate that the cheques were presented before the agreed date.
Respondent’s Arguments
The respondent contended:
- The accused admitted issuing the cheque and receiving the statutory notice.
- The accused failed to produce cogent evidence to rebut the presumption under Sections 118 and 139.
- Denial of liability and claims of repayment were unsubstantiated and rejected by both lower courts.
- Allegations regarding moneylending were mere suggestions without proof.
Analysis of the Law
The Court analysed:
- Sections 118(a) and 139 of the NI Act: presumption of consideration upon the issuance of a cheque.
- Precedents including:
- Hiten P. Dalal v. Bratindranath Banerjee: presumption must be rebutted by proof, not mere plausible explanations.
- Basalingappa v. Mudibasappa: burden on the accused to raise a probable defence by preponderance of probabilities.
- Kalamani Tex v. P. Balasubramanian and Bir Singh v. Mukesh Kumar: mere denial or claim of security cheque usage without proof does not rebut presumption.
- Surinder Singh v. State of H.P.: contravention of Section 269SS of IT Act does not invalidate transactions.
- Revisional jurisdiction scope under Malkeet Singh Gill v. State of Chhattisgarh and State of Gujarat v. Dilipsinh Rao: revisional court cannot reappreciate evidence absent perversity.
Precedent Analysis
- Hiten P. Dalal, Basalingappa, Kalamani Tex, Bir Singh: reinforce that signature admission triggers presumption.
- Surinder Singh: Section 269SS IT Act breach does not nullify the transaction.
- Malkeet Singh Gill, State of Gujarat v. Dilipsinh Rao: revisional courts have narrow interference scope.
- Tedhi Singh, Triyambak Hegde: confirm reverse onus under Section 139.
Court’s Reasoning
The Court found:
- The accused admitted his signatures, triggering the presumption under Sections 118 and 139.
- The accused’s claim of repayment was unsupported, and defence witness failed to link the repayment to the complainant.
- Allegations regarding moneylending were unproven as denied suggestions do not amount to proof.
- Non-disclosure in IT returns and claims under Section 269SS do not invalidate the transaction.
- Revisional jurisdiction cannot reappreciate evidence absent perversity or miscarriage of justice.
Conclusion
The High Court:
- Dismissed the revision petition.
- Upheld the conviction and sentence under Section 138 NI Act.
- Held that admission of signature triggers presumption which was not rebutted by the accused.
Implications
- Reinforces that signature admission on a cheque is sufficient to trigger presumption of legally enforceable debt.
- Clarifies that claims of repayment or misuse as security require cogent evidence.
- Limits revisional interference unless there is perversity or legal error.
Short Note on Cases Referred
- Hiten P. Dalal, Basalingappa, Kalamani Tex, Bir Singh: Signature admission triggers presumption under NI Act.
- Surinder Singh: Breach of Section 269SS does not nullify transactions.
- Malkeet Singh Gill, Dilipsinh Rao: Revisional jurisdiction is limited.
- Triyambak Hegde, Tedhi Singh: Reverse onus under Section 139 is applicable.
FAQs
1. Does admission of signature on a cheque trigger legal presumption under the NI Act?
Yes, it triggers a presumption of debt under Sections 118 and 139, which the accused must rebut with evidence.
2. Can claims of repayment without proof rebut the presumption under the NI Act?
No, mere claims without credible evidence cannot rebut the presumption.
3. Does violation of Section 269SS IT Act invalidate cheque transactions under the NI Act?
No, it may attract penalties but does not nullify the transaction or debt.