Court upholds principal debt, rejects unsupported interest claim
MAPUSA
In a judgment that distinguished between contractual liability and unsupported claims for interest, a Mapusa court convicted a businessman under the Negotiable Instruments Act while rejecting part of the complainant’s claim amounting to several lakhs of rupees.
The accused was sentenced to one year’s simple imprisonment and directed to pay compensation of Rs 1 crore within 30 days. Failure to do so will result in an additional 30 days of simple imprisonment.
Judicial Magistrate First Class Jude Torex Sequeira, while delivering the verdict, held that the complainant had successfully proved that most of the dishonoured cheques were issued towards legally enforceable liabilities arising from two agreements executed in November 2015.
However, the court refused to treat seven cheques as legally recoverable debt after finding no documentary evidence to support the complainant’s claim that they represented interest on delayed payments.
The dispute arose from agreements involving the development and assignment of rights, under which the accused had agreed to pay Rs 75 lakh and a further Rs 37 lakh.
Several cheques issued towards these obligations were dishonoured upon presentation, with remarks such as “Funds Insufficient”, “Account Blocked” and “Exceeds Arrangement”.
During the trial, the accused admitted liability of Rs 75 lakh under one agreement but disputed the second agreement, claiming it had been signed under duress.
The court rejected this defence, noting that neither the accused nor the witnesses had challenged the execution of the document in any legal forum and that no evidence had been produced to support the allegation.
A key aspect of the judgment was the court’s examination of the complainant’s claim regarding additional cheques allegedly issued towards interest on delayed payments.
The magistrate observed that the original agreement specifically required any modifications or additions to be made in writing. As no written agreement relating to interest was produced, the court concluded that those cheques could not be treated as representing a legally enforceable debt.
Despite excluding those seven cheques, the court found sufficient evidence to establish liability in respect of the remaining dishonoured cheques and held that all requirements under Section 138 of the Negotiable Instruments Act had been fulfilled.
Observing that cheque dishonour is an economic offence and noting that the dispute had remained unresolved since 2019, the court declined to grant the accused the benefit of probation.
