Delhi High Court Upholds Conviction in Cheque Dishonour Case

Rajendra Singh's plea dismissed; court reaffirms liability for dishonoured cheque issued from personal account.

In a recent judgment, the Delhi High Court dismissed a revision petition filed by Rajendra Singh against his conviction under Section 138 of the Negotiable Instruments Act, 1881. The judgment, delivered by Dr. Swarana Kanta Sharma, J., upheld the findings of the Sessions Court and the Trial Court, affirming the conviction and sentencing of Singh for issuing a dishonoured cheque from his personal account.

The case traces back to a property transaction between Rajendra Singh, a property dealer, and Saroj Singh. A settlement agreement dated September 27, 2015, required Rajendra Singh to pay Saroj Singh Rs. 6,48,000/- in exchange for relinquishing rights over a property in Radha Kunj Colony, Agra. Singh issued a cheque for the agreed amount, which was dishonoured upon presentation. Consequently, Saroj Singh filed a complaint under Section 138 of the NI Act, leading to Rajendra Singh's conviction by the Trial Court in August 2020. Singh was sentenced to one year of simple imprisonment and a fine of Rs. 9,72,000/-, with additional imprisonment in case of default.

Rajendra Singh's appeal to the Sessions Court was dismissed, prompting him to approach the High Court. The petitioner argued that the cheque was issued as advance consideration and that the essential ingredient of a legally enforceable debt was absent since Saroj Singh allegedly breached the settlement agreement. He contended that the cheque was issued in a representative capacity for the Shiva Shakti Educational Society, and thus, he should not be personally liable.

However, the High Court, after reviewing the arguments and evidence, found that Rajendra Singh had issued the cheque from his personal account and signed the settlement agreement in his individual capacity. The court noted that the statutory presumptions under Sections 118 and 139 of the NI Act were rightly drawn against Singh, as he failed to provide credible evidence to rebut them. The court further stated that the liability under Section 138 arises even if the cheque is drawn from a personal account for the discharge of a liability related to a society.

The judgment highlighted the scope of revisional jurisdiction under Section 397 of the CrPC, emphasizing that the High Court's role is limited to examining the correctness, legality, or propriety of the lower court's findings, not re-evaluating the facts and evidence in detail.

In light of these findings, the High Court dismissed the revision petition, affirming the conviction and sentence. Rajendra Singh was directed to surrender and serve his sentence within three weeks. The court's decision underscores the legal principle that individuals issuing cheques from personal accounts are personally liable for dishonour, reinforcing accountability under the Negotiable Instruments Act.

Bottom Line:

Negotiable Instruments Act, 1881 - Presumption under Sections 118 and 139 regarding issuance of cheque for legally enforceable debt or liability - Presumption arises when execution and issuance of cheque are admitted, and rebuttal requires credible evidence, not mere assertions.

Statutory provision(s): Negotiable Instruments Act, 1881 Sections 118, 139, 138; Criminal Procedure Code, 1973 Section 397

Rajendra Singh v. Saroj Singh, (Delhi) : Law Finder Doc Id # 2809015