Petitioner Has Failed to Rebut the Presumption: Punjab and Haryana High Court Affirms Conviction in Cheque Dishonor Case

The Punjab and Haryana High Court has dismissed a criminal revision petition challenging the conviction and sentence under Section 138 of the Negotiable Instruments Act, 1881. The judgment, delivered by Justice Jasjit Singh Bedi, upheld the findings of the Judicial Magistrate Ist Class and the Additional Sessions Judge, reaffirming the petitioner’s guilt for dishonoring a cheque issued as part of a settlement agreement.

The case originated from a complaint filed by respondent Jolly against the petitioner, Pushpa Bahmni, the sole proprietor of M/s H.P. Bahmni Filling Station. Bahmni had entered into an agreement to sell her petrol pump to Jolly and issued a cheque for Rs. 40,00,000 as part of a settlement agreement after the sale was impeded by Hindustan Petroleum Corporation Ltd. Terminating the retail outlet agreement. The cheque was dishonored due to insufficient funds, leading to legal proceedings under Section 138 of the Negotiable Instruments Act.

Credibility of Evidence: Justice Jasjit Singh Bedi emphasized the reliability of the documentary evidence presented by the respondent, which included the agreement to sell and the settlement deed. “The petitioner’s multiple contradictory defenses and failure to rebut the presumption under Sections 118 and 139 of the Negotiable Instruments Act were crucial factors in upholding the conviction,” Justice Bedi noted.

Petitioner’s Defenses: The court found the petitioner’s defenses to be inconsistent and unreliable. Bahmni claimed that the cheque was lost or misused, yet failed to provide substantive evidence to support this claim. Additionally, the court noted that despite Bahmni’s assertion of having reported the missing cheque book to the police and the bank, no legal action was taken against the alleged misuse.

Witness Testimonies: The testimonies from witnesses corroborated the existence and execution of the agreement and settlement deed. Witnesses such as Satish Kumar, who attested the documents, confirmed the petitioner’s involvement and signature on the crucial documents. This further discredited the petitioner’s claims of forgery and misuse.

Justice Bedi reiterated the legal principles surrounding the presumption of liability under the Negotiable Instruments Act. “Once the signatures on the cheque are admitted, the presumption under Section 118 and 139 arises, and the onus shifts to the drawer to rebut the presumption,” the judgment stated. The petitioner’s failure to provide a credible defense or substantive evidence to counter the presumption led to the upholding of the conviction.

Justice Bedi remarked, “The petitioner has failed to rebut the presumption as exists in favor of the respondent as per Section 118 read with Section 139 of the Negotiable Instruments Act.” The court emphasized that the consistent and corroborative evidence presented by the respondent outweighed the petitioner’s contradictory defenses.

The High Court’s decision to dismiss the revision petition reinforces the judiciary’s stance on upholding the integrity of financial transactions and the legal presumptions under the Negotiable Instruments Act. The judgment sends a strong message about the consequences of issuing dishonored cheques and the importance of maintaining credibility in legal defenses. This ruling is expected to have significant implications for future cases involving dishonored cheques, reinforcing the legal framework that ensures accountability in commercial transactions.

Date of Decision:May 31, 2024

Pushpa Bahmni v. Jolly and anr.