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Issues involved: Appeal against acquittal u/s 138 of Negotiable Instruments Act based on lack of proper service of demand notice and failure to establish legally recoverable debt.
Summary: Issue 1: Lack of proper service of demand notice The trial court convicted the respondent-accused u/s 138 of Negotiable Instruments Act based on dishonored cheques and legally enforceable debt. However, the appellate judge acquitted the accused due to improper service of demand notice and lack of evidence establishing a legally recoverable debt. The appellate judge also doubted the authenticity of the cheques and the absence of account books proving the debt, following the precedent set by the Apex Court. Issue 2: Legally recoverable debt and time-barred transaction The Apex Court's decision emphasized the initial presumption in favor of the complainant in cases u/s 138. The Sessions Judge considered the cheques drawn in 1999 but presented in 2004 as a time-barred transaction, leading to the acquittal of the accused. The appellant cited a different Apex Court judgment regarding post-dated cheques, arguing that the period for presenting such cheques starts from the date written on them. Issue 3: Presumption in favor of holder of the cheque The judgment highlighted the presumption in favor of the holder of the cheque, even if written by a third party. The court rejected the respondent's claim of no legally recoverable debt, considering past cases where the respondent was directed to make payments to the complainant. The trial court's order was upheld, modifying the imprisonment to a fine amount to be paid by the respondent within three months to avoid imprisonment.
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