The High Court at Calcutta has dismissed a criminal revisional application challenging a conviction under Section 138 of the Negotiable Instruments Act, 1881. The Court affirmed the findings of the lower courts, ruling that the accused failed to rebut the statutory presumption of legal liability with cogent evidence and that the defense of the cheque being issued for “security purposes” lacked merit without proof.
Background of the Case
The matter originated from a complaint filed by Kartick Chandra Basu (Opposite Party No. 1). The complainant alleged that the petitioner, Kausik Barui, approached him for an accommodation loan of Rs. 6,00,000. Upon request, the loan was granted, and the petitioner issued an account payee cheque for the same amount to discharge the liability.
When presented for encashment on September 1, 2006, the cheque was dishonoured by the bank with the endorsement “Insufficient Funds.” The complainant subsequently issued a demand notice on September 7, 2006. Despite the service of notice, the petitioner failed to repay the amount, leading to the filing of Case No. C-6282 of 2006.
On January 29, 2011, the Judicial Magistrate, 5th Court, Alipore, convicted the petitioner, sentencing him to two months of simple imprisonment and a fine of Rs. 8,00,000. Out of the fine, Rs. 7,95,000 was ordered to be paid to the complainant as compensation. An appeal against this order was dismissed by the Additional District and Sessions Judge, 5th Fast Track Court, Alipore, on February 11, 2015.
Arguments of the Petitioner
Challenging the legality of the lower courts’ orders, the counsel for the petitioner argued:
- Absence of Agreement: The complainant failed to produce any written agreement or document proving the accommodation loan of Rs. 6,00,000.
- Security Cheque Theory: The petitioner claimed he had actually taken a loan of only Rs. 1,00,000 from one Palash Chatterjee and the cheque in question was issued for “security purposes.” It was alleged that the opposite party utilized this cheque to claim a discharge of Rs. 6,00,000.
- Rebuttal of Presumption: The conviction was based solely on the presumption of liability, which the petitioner contended was rebuttable.
- Service of Notice: It was argued that PW-1 admitted during cross-examination that the demand notice was not properly served.
Court’s Analysis and Observations
Hon’ble Justice Ajay Kumar Gupta, presiding over the case, examined whether the ingredients of Section 138 of the NI Act were met and if the accused had successfully rebutted the statutory presumption.
- On Statutory Presumption: The Court observed that under Sections 138 and 139 of the NI Act, once the issuance of the cheque and signature are not disputed, a presumption arises that the cheque was issued for the discharge of a debt or liability. The Court noted, “The petitioner has not been able to rebut the statutory presumption raised by the law in respect of the issuance of the impugned cheque by him in favour of the complainant.”
- On the Plea of Security Cheque: Addressing the petitioner’s claim that the cheque was issued as security for a different loan of Rs. 1,00,000, the Court termed the argument baseless in the absence of evidence. Justice Gupta remarked:
“A person cannot issue a cheque of Rs. 6,00,000/- when he has taken a loan of Rs. 1,00,000/- only… Unless such fact is proved with reasonable evidence, court cannot give importance of such contention.” - On Written Agreement: Regarding the lack of a written document for the loan, the Court stated:
“There may not be a written agreement but if there is a good relation between the parties, it can be safely accepted and presumed that the accommodation loan was given to the Petitioner and in discharge of his liability, the petitioner has issued cheque in the name of the opposite party no.1.” - On Demand Notice: The Court found from the records that the demand notice was sent via registered A/D post and was duly served on September 8, 2006, with the acknowledgement due card returned to the complainant’s advocate.
- Scope of Revisional Jurisdiction: Citing Supreme Court precedents in State of Haryana v. Bhajan Lal, Surya Dev Rai v. Ram Chander Rai, and Amit Kapoor v. Ramesh Chander, the High Court reiterated that its supervisory jurisdiction under Article 227 of the Constitution and Section 482 of the CrPC is not to be used to re-appreciate evidence. The Court held:
“This Court, in the present case, cannot reassess or re-appreciate the entire evidence as if sitting in appeal over the Trial Court’s findings… Interference is justified only when there is a patent error of law, a manifest miscarriage of justice, or where the findings are perverse…”
Decision
The High Court found no infirmity or illegality in the judgments passed by the lower courts. The Court held that the complainant had fully satisfied the ingredients of Section 138 of the NI Act, while the petitioner failed to produce any cogent oral or documentary evidence to substantiate his defense.
Justice Ajay Kumar Gupta dismissed the revision petition, stating:
“The conviction and sentence passed by the learned Judicial Magistrate is illegal, arbitrary, and without any base as such, the same is liable to be set aside… is without any basis.” (Refuting the petitioner’s claim).
The Court affirmed the conviction and sentence, directing the Registry to send a copy of the judgment to the Trial Court for necessary action against the petitioner.
Case Details:
- Case Title: Kausik Barui vs. Kartick Chandra Basu & Anr.
- Case Number: C.R.R. 969 of 2015
- Coram: Justice Ajay Kumar Gupta
