2019 (8) TMI 1719 - HC - Indian Laws

Dishonor of Cheque - error in acquitting the accused on the basis of the complainant not showing the source of income - HELD THAT - On perusal of these admissions by the complainant goes to show that, except the oral evidence in respect of lending ₹ 1,00,000/- to the accused, there is no other document obtained by him. Further, the complainant being the income tax assessee, he has not declared lending of ₹ 1,00,000/- to the accused in his income tax returns. Further, in the cross-examination, he has admitted that he cannot say on which date he gave the money to the accused, but he says only in the month of April. He further admitted in the cross-examination that the accused gave the cheque to him on 21st or 22nd November, 2008, whereas Ex. P2-cheque shows the date as 20.10.2008, which falsifies the evidence on record. When the cheque has been issued on 21st or 22nd of November, 2008, the question of mentioning the date as October, 2008 does not arise. There is no document forthcoming from the side of the complainant to show that he had source of income and capacity to lend ₹ 1,00,000/- to the accused and he being the income tax assessee, not declared the said income to the Income Tax Authority and no documents were produced in the Court. Apart from that, he has not produced any document to show that he had cash in his possession to lend the same to the accused. Therefore, the contention of the complainant that the accused borrowed the amount and he was unable to pay the amount is not acceptable. In the case on hand, though the presumption under Section 118 R/w. Section 139 of the Negotiable Instruments Act exists in favour of the complainant, however, the accused is required to rebut the presumption available in favour of the complainant. The accused need not enter into witness box by letting evidence, but he can rebut the evidence of the complainant in the cross-examination. In this case, the accused is disproved the evidence of PW1 in respect of the existence of presumption in favour of the appellant/complainant and legally recoverable debt payable by the accused - when the accused/complainant himself is unable to show the source of income and capacity to pay and date of issuance of cheque throw suspicion and cloud in the evidence of the complainant. It is not possible to accept the evidence of the complainant that there is any legally recoverable debt payable by the accused and he had issued the cheque to discharge the amount to the complainant. The contention of the complainant that he has actually lent the loan and in discharge of the said loan the accused issued the cheque to discharge the legally recoverable debt cannot be acceptable - The first Appellate Court has rightly re-appreciated the evidence on record and accepted the contention of the accused and acquitted the accused, whereas the trial Court has not considered those aspects in proper perspective. The appeal filed by the complainant is hereby dismissed.

Summary

Issues Involved:
1. Whether the first Appellate Court committed an error in reversing the judgment of conviction and sentence held by the trial Court.
2. What order should be passed.

Detailed Analysis:

Issue 1: Error in Reversing Judgment of Conviction and Sentence
The appellant/complainant was aggrieved by the judgment and order of acquittal dated 05.05.2010 passed by the District and Sessions Judge and Fast Track Court-IV at Bengaluru, which reversed the trial Court’s conviction and sentence. The complainant alleged that the accused borrowed ?1,00,000 in April 2008 and issued a cheque dated 20.10.2008, which was dishonored due to insufficient funds. Despite receiving a legal notice, the accused neither repaid the loan nor responded, leading to the filing of a complaint under Section 200 of the Cr.P.C.

The trial Court convicted the accused, sentencing him to pay ?1,10,000 as fine, with ?1,06,000 as compensation to the complainant. However, the first Appellate Court set aside this judgment, leading to the complainant’s appeal to the High Court.

The appellant’s counsel argued that the trial Court rightly convicted the accused based on evidence, but the first Appellate Court erred by questioning the complainant’s financial capacity to lend ?1,00,000, given his occupation as an auto driver. The complainant claimed the amount was from his savings and his father’s retirement benefits, which the first Appellate Court disbelieved.

Conversely, the respondent’s counsel supported the acquittal, arguing that the presumption of a legally enforceable debt was rebutted through cross-examination. The complainant’s financial incapacity and inconsistencies in his statements weakened his case. The accused claimed the cheque was lost and misused, a defense accepted by the first Appellate Court.

Issue 2: What Order
Upon reviewing the arguments and records, the High Court considered whether the first Appellate Court erred in reversing the trial Court’s judgment. The complainant’s case was based on the accused borrowing ?1,00,000 for film production and issuing a dishonored cheque. The complainant presented seven documents, including the cheque and bank endorsement, but the accused did not present evidence, only cross-examining the complainant.

The High Court noted discrepancies in the complainant’s statements about the loan date and circumstances, and his failure to declare the loan in income tax returns. The complainant’s financial capacity was questionable, given his occupation and lack of documentation for the loan. The court referenced the Supreme Court’s judgment in K. Subramani Vs. K. Damodara Naidu, emphasizing the need for credible evidence of a legally recoverable debt.

The High Court found that the accused effectively rebutted the presumption of debt through cross-examination, highlighting inconsistencies in the complainant’s testimony. The first Appellate Court’s re-appreciation of evidence and acceptance of the accused’s defense were deemed proper.

Conclusion:
The High Court dismissed the appeal, confirming the first Appellate Court’s judgment of acquittal. The complainant failed to provide sufficient evidence of a legally recoverable debt, and the accused successfully rebutted the presumption of debt through cross-examination. The trial Court’s conviction was not upheld due to the complainant’s inconsistent and unsubstantiated claims.