Delhi High Court Upholds Conviction in Rs. 24 Lakh Cheque Bounce Case

Satish Kumar's revision plea dismissed; court emphasizes statutory presumptions under Negotiable Instruments Act.

In a significant judgment, the Delhi High Court upheld the conviction and sentence of Satish Kumar in a cheque bounce case involving a sum of Rs. 24 lakh. The court dismissed Satish Kumar’s revision petition, reaffirming the findings of both the trial and appellate courts which had convicted him under Section 138 of the Negotiable Instruments Act, 1881.

The case dates back to March 2015 when Satish Kumar allegedly received a friendly loan of Rs. 4 lakh and an additional Rs. 20 lakh from complainant Bindu Mahajan. Promissory notes acknowledging the debt were executed, followed by the issuance of cheques for repayment in 2019, which were dishonoured due to insufficient funds and other reasons.

Satish Kumar contested the charges, claiming the cheques were meant for a real estate transaction, not as repayment of a loan. However, the court noted that once the signatures on the cheques were admitted, statutory presumptions under Sections 118 and 139 of the NI Act came into play, presuming the cheques were issued for a debt or liability.

Justice Dr. Swarana Kanta Sharma, presiding over the case, emphasized that the petitioner failed to rebut these presumptions credibly. The court highlighted the inadequacy of the petitioner’s defence, noting the absence of any evidence to support his claims about the real estate transaction or to prove the forgery of promissory notes.

Furthermore, the court dismissed the argument related to financial incapacity of the complainant, stating that the petitioner did not provide substantial evidence to challenge her financial ability to lend the amount in question. The judgment clarified that a violation of Section 269SS of the Income Tax Act does not invalidate the transaction for the purposes of the NI Act, as reiterated in recent Supreme Court rulings.

The court also observed procedural propriety and found no irregularities in the previous judgments, thereby dismissing the revision petition. The petitioner has been directed to surrender within three weeks to serve the sentence of one year’s simple imprisonment and pay compensation of Rs. 28,33,000 to the complainant.

The judgment serves as a crucial reinforcement of the statutory presumptions under the NI Act, underscoring the burden on the drawer to provide credible evidence to rebut such presumptions once the signature on a cheque is admitted.

Bottom Line:

Section 138 of the Negotiable Instruments Act, 1881 - Presumption under Sections 118 and 139 of NI Act - Once drawer admits his signature on cheque, statutory presumptions arise that cheque was issued for legally enforceable debt or liability - Burden shifts to drawer to rebut presumption by credible evidence - Mere violation of Section 269SS of Income Tax Act does not render transaction unenforceable under Section 138 of NI Act.

Statutory provision(s): Section 138 of the Negotiable Instruments Act, 1881, Sections 118 and 139 of the Negotiable Instruments Act, 1881, Section 397 of the Criminal Procedure Code, 1973, Section 269SS of the Income Tax Act, 1961.

Satish Kumar v. State (Govt. NCT Delhi), (Delhi) : Law Finder Doc Id # 2809017