2013 (2) TMI 905 - HC - Indian Laws

Summary

Issues Involved:

1. Legally enforceable debt.
2. Time-barred debt.
3. Rebuttal of presumption u/s 138 of the Negotiable Instruments Act, 1881.
4. Misuse of cheques.
5. Procedural compliance and evidence evaluation.

Summary:

1. Legally enforceable debt:
The complainant alleged that the accused had issued eight cheques totaling Rs. 42 lakhs, which were dishonored due to "stop payment" and "insufficient funds". The learned Magistrate found that the complainant had not proven a legally enforceable debt, a requirement u/s 138 of the Negotiable Instruments Act, 1881.

2. Time-barred debt:
The amounts in question were paid between 1991 and 1997, making the debt time-barred by 2000. The cheques issued in 2002 were therefore in respect of a time-barred debt, which is not legally enforceable u/s 138 of the Act. The court referenced the Bombay High Court decision in Smt. Ashwini Santosh Bhatt v. Shri Jeevan Divakar, affirming that a time-barred debt does not attract the provisions of section 138.

3. Rebuttal of presumption u/s 138:
The accused successfully rebutted the presumption against him by showing that the cheques were not issued for any legally enforceable debt. The Supreme Court's decision in Krishna Janardhan Bhat v. Dattatraya G. Hegde was cited, emphasizing that the prosecution must prove a legally enforceable debt beyond reasonable doubt, while the accused's defense can be established on a preponderance of probabilities.

4. Misuse of cheques:
The accused claimed that the cheques were handed over in trust to the complainant for payment of society dues and were misused. The Magistrate found this defense more credible, noting the improbability of issuing multiple cheques of different amounts on the same day from different cheque books.

5. Procedural compliance and evidence evaluation:
The complainant failed to produce documentary evidence of the alleged payments or income to substantiate his claims. The court also disregarded certain receipts annexed with the appeal memo, as they were not presented during the trial or accompanied by an application for additional evidence.

Conclusion:
The court upheld the Magistrate's decision to acquit the accused, finding no perversity in the judgment. The appeal was dismissed, affirming that the charges were not proven beyond reasonable doubt.