Calcutta High Court Upholds Conviction in Cheque Dishonour Case

Ma Kreeng Construction Pvt. Ltd. and its Directors Ordered to Compensate and Imprisoned for Non-Payment Under Negotiable Instruments Act

In a significant ruling, the Calcutta High Court, presided over by Justice Ajay Kumar Gupta, has upheld the conviction of Ma Kreeng Construction Pvt. Ltd. and its directors in a cheque dishonour case under Section 138 of the Negotiable Instruments Act, 1881. The court dismissed the revision petition filed by the construction company and its directors, confirming the judgments of the lower courts.

The case centered around a dishonoured cheque amounting to Rs. 25,00,000, issued by the company as part of a refund agreement for a failed property transaction with Mr. Dipak Saha. The cheque, drawn on Indian Overseas Bank, was returned with the remark "Exceeds arrangement," leading to Mr. Saha filing a complaint under the Negotiable Instruments Act.

The petitioners contended that the cheque and the accompanying refund agreement were obtained under coercion and that no payment of Rs. 68,00,000 had been made by Mr. Saha. However, the court found these allegations unsubstantiated, citing the absence of evidence to support claims of coercion and non-payment. The court highlighted that the company had acknowledged a liability of Rs. 1,10,00,000 in the refund agreement, further weakening their defense.

The Trial Court had sentenced the company to pay a compensation of Rs. 10,00,000, with directors sentenced to three months of simple imprisonment and ordered to pay Rs. 20,00,000 each as compensation. The High Court found no reason to interfere with these sentences, emphasizing the statutory presumption under Section 138 and the absence of material contradictions in the complainant’s evidence.

The judgment reiterates the legal principle that once a cheque and signature are admitted, the burden shifts to the accused to prove their defense. The court maintained that the petitioners failed to provide any credible evidence to rebut the statutory presumption of liability under the Negotiable Instruments Act.

This ruling not only underscores the legal obligations surrounding cheque transactions but also highlights the judiciary's stance on ensuring the integrity of commercial transactions. The petitioners have been directed to comply with the sentencing, with a 15-day period granted for surrender. The judgment stands as a reminder of the severe consequences of cheque dishonour in business dealings.

Bottom Line:

Negotiable Instruments Act, 1881 Section 138 Dishonour of cheque issued for refund under agreement - Statutory presumption under Section 138 operates unless accused brings probable evidence to rebut liability - Allegation of coercion and non-payment unsubstantiated.

Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Section 141 of the Negotiable Instruments Act, 1881, Section 401 of the Criminal Procedure Code, 1973

Ma Kreeng Construction Pvt. Ltd. v. Mr. Dipak Saha, (Calcutta) : Law Finder Doc Id # 2812074