2018 (12) TMI 1903 - HC - Indian Laws

Dishonor of Cheque - acquittal of accused - rebuttal of presumption - Legally enforceable debt - defence of the accused is that said cheque was issued for security in a previous loan transaction, however, the same was misused by the complainant - Section 138 of the N.I. Act - HELD THAT - In the absence of any other material, merely because the proforma date on the cheque leaf shown the same to be of the decade 1990 by that itself it cannot be concluded that the cheque was issued in the said decade, but not the written date mentioned upon it. Further, it is also not the case of the accused that the cheque issued in 1990s cannot be used in the year 2007 by the customer. Consequently, the cheque in question has been dishonoured with the shara since account stands closed would not entitle the accused to claim that guilt against him for the offence punishable under Section 138 of the N.I. Act, has not been proved. Since the trial Court without appreciating the materials placed before it in its proper perspective, has erroneously held that the complainant has failed to prove his capacity to lend and which finding has led the trial Court in pronouncing the judgment of acquittal, the same deserves to be set aside and has to be held that the complainant has proved beyond reasonable doubt that the accused has committed the offence punishable under Section 138 of the N.I. Act. The judgment of acquittal is set aside - appeal allowed.

Summary

Issues Involved:
1. Authorization to file the complaint.
2. Capacity to lend money.
3. Validity of the cheque issued.
4. Existence of legally enforceable debt.
5. Judgment of acquittal by the trial court.

Issue-wise Detailed Analysis:

1. Authorization to file the complaint:
The complainant, a registered partnership firm, faced a challenge regarding the authorization to file the complaint. The respondent argued that the complaint was not maintainable due to the absence of a letter of authority from the other partner. However, the court held that under Section 12 of the Indian Partnership Act, 1932, every partner has a right to participate in the conduct of the business. The evidence showed that the other partner had authorized PW-1 to manage the firm's financial transactions and litigation. Thus, the court concluded that the complaint was maintainable.

2. Capacity to lend money:
The respondent contended that the complainant lacked the capacity to lend the loan amount, citing a meager bank balance as evidence. The court noted that the complainant produced various documents, including a money lender license, partnership deed, and loan ledger book, which indicated the firm's financial activities. The court found that the complainant had multiple business accounts and kept money in rotation, thus rejecting the respondent's argument about the complainant's capacity to lend money.

3. Validity of the cheque issued:
The respondent argued that the cheque in question, dated "07/07/2007," was actually issued in the 1990s as security for a previous loan, pointing to the printed date format on the cheque. The court referred to the Supreme Court case T. Vasanth Kumar Vs. Vijayakumari, which held that the printed date format alone cannot conclusively determine the issuance date of the cheque. The court found no material evidence supporting the claim that the cheque was issued as security in a previous transaction and accepted the complainant's assertion that the cheque was issued for the current loan repayment.

4. Existence of legally enforceable debt:
The court examined whether the complainant had a legally enforceable debt against the respondent. The complainant presented evidence, including cash books and loan ledgers, showing the loan transaction and the outstanding amount. The respondent failed to rebut the presumption of a legally enforceable debt under Section 139 of the N.I. Act. The court concluded that the complainant had successfully established the existence of a legally enforceable debt.

5. Judgment of acquittal by the trial court:
The trial court had acquitted the respondent, holding that the complainant failed to prove the capacity to lend and the existence of a legally enforceable debt. The High Court found that the trial court had not properly appreciated the evidence and had erroneously concluded that the complainant lacked the capacity to lend. The High Court set aside the trial court's judgment of acquittal and convicted the respondent under Section 138 of the N.I. Act.

Order:
The appeal was allowed, and the judgment of acquittal dated 14.05.2010, passed by the learned Civil Judge and JMFC, Challakere in C.C. No. 765/2007, was set aside. The respondent was convicted for the offence punishable under Section 138 of the N.I. Act. The respondent was sentenced to pay a fine of ?7,50,000 within four weeks, failing which he would undergo simple imprisonment for one year. Of the fine amount, ?7,39,000 was to be paid to the complainant, and ?11,000 was to be credited to the State. The Registry was directed to transmit a copy of the judgment to the trial court for further proceedings.