2011 (4) TMI 1528 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the respondent committed an offense u/s 138 of the Negotiable Instruments Act, 1881.
2. Whether the trial court erred in acquitting the respondent.
3. Whether the respondent successfully rebutted the presumption u/s 139 of the NI Act.

Issue 1: Offense u/s 138 of the NI Act
The petitioner alleged that the respondent issued seven cheques totaling Rs. 2,10,000/- for repayment of a loan, which were dishonored due to insufficient funds. The petitioner contended that the respondent intentionally issued cheques without sufficient balance, thereby committing an offense u/s 138 of the NI Act and Section 420 IPC. The respondent denied owing any debt and claimed the cheques were forged.

Issue 2: Trial Court's Acquittal
The petitioner argued that the trial court erroneously acquitted the respondent by not recognizing the presumption in favor of the cheque holder u/s 139 of the NI Act. The petitioner asserted that the trial court wrongly concluded that the complaint was filed prematurely and overlooked the statutory presumption. The respondent's counsel supported the acquittal, arguing that the petitioner failed to prove the loan and that the cheques were forged.

Issue 3: Rebuttal of Presumption u/s 139 of the NI Act
The court referred to Sections 138 and 139 of the NI Act, emphasizing that dishonor of a cheque alone does not constitute an offense unless certain conditions are met. The court cited the Apex Court's decision in Rangappa v. Sri Mohan, which clarified that the presumption u/s 139 includes the existence of a legally enforceable debt or liability. The court noted that the respondent did not need to adduce evidence to rebut the presumption and could rely on the material brought on record.

The court found that the petitioner failed to provide corroborative evidence of the loan, such as witnesses, documents, or receipts. The court also questioned the credibility of the petitioner's story regarding the issuance and timing of the cheques. Given the lack of evidence and the inconsistencies in the petitioner's account, the court held that the respondent successfully rebutted the presumption by preponderance of probabilities.

Conclusion:
The court dismissed the revision, upholding the trial court's acquittal of the respondent. The court concluded that the respondent successfully rebutted the statutory presumption against her, and the petitioner's case lacked merit.