2007 (10) TMI 605 - SC - Companies Law

Whether the said cheques had been issued towards discharge of any existing debt? Held that - It is now a well-settled principle of law that this Court in exercise of its jurisdiction under Article 136 of the Constitution of India would ordinarily not interfere with the judgment of acquittal if two views are possible. In any event the High Court entertained an appeal treating to be an appeal against acquittal it was in fact exercising the revisional jurisdiction. Even while exercising an appellate power against a judgment of acquittal the High Court should have borne in mind the well-settled principles of law that where two views are possible the appellate court should not interfere with the finding of acquittal recorded by the court below. Appeal dismissed.

Summary

Issues:
1. Interpretation of Section 138 of the Negotiable Instruments Act regarding dishonored cheques.
2. Burden of proof under Section 139 of the Act in cases of dishonored cheques.
3. Relevance of civil litigations between parties in determining the nature of transactions.
4. Applicability of the principle of interference in judgments of acquittal under Article 136 of the Constitution of India.

Analysis:
1. The primary issue in this case revolved around the interpretation of Section 138 of the Negotiable Instruments Act concerning dishonored cheques. The respondent had issued two cheques to the complainant, which were dishonored due to insufficient funds. The courts examined whether these cheques were issued towards the discharge of an existing debt, as required by the Act.

2. The burden of proof under Section 139 of the Act was a crucial aspect analyzed by the courts. The appellant contended that the dishonored cheques created a presumption against the respondent, which he failed to rebut. However, the High Court opined that the respondent successfully rebutted this presumption by presenting evidence that the cheques were not issued for any debt owed to the complainant.

3. The relevance of the ongoing civil litigations between the parties played a significant role in determining the nature of the transactions. The High Court considered the conduct of the parties, including the history of chitty transactions and pending suits, to assess whether the respondent borrowed the sum for which the cheques were issued. The court concluded that the evidence did not support the appellant's claim of a loan transaction.

4. Lastly, the judgment addressed the principle of interference in judgments of acquittal under Article 136 of the Constitution of India. The court cited precedents emphasizing that interference is not warranted if two views are possible. In this case, since the High Court's findings were based on factual analysis and not deemed perverse, the Supreme Court declined to interfere, leading to the dismissal of the appeals.

In conclusion, the judgment delved into the nuances of dishonored cheques, burden of proof, relevance of civil litigations, and the principle of interference in acquittal judgments, providing a comprehensive analysis of each issue raised in the case.