2012 (8) TMI 1217 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the cheque (Ex.P1) was issued by the respondent for discharging a legally enforceable debt.
2. Whether the appellant had the financial status to lend Rs. 2,75,000/- to the respondent.
3. Whether the presumption u/s 139 of the Negotiable Instruments Act was rebutted by the respondent.

Issue 1: Legally Enforceable Debt
The appellant claimed that the respondent issued a post-dated cheque for Rs. 2,75,000/- to discharge a debt. The cheque was returned due to "insufficient funds," leading to a statutory notice u/s 138(b) of the Negotiable Instruments Act. The trial court acquitted the respondent, stating the cheque was not issued for a legally enforceable debt, as the appellant lacked the financial status to lend such an amount. The High Court upheld this view, noting the appellant failed to provide independent evidence proving the loan.

Issue 2: Financial Status of the Appellant
The appellant admitted to having only Rs. 50,000/- and claimed to have borrowed the remaining amount from his father-in-law and a friend, neither of whom were examined as witnesses. The respondent argued that the appellant, being a sundry worker, lacked the financial capacity to lend Rs. 2,75,000/-. The High Court found this defense plausible, noting the appellant's failure to prove his financial status and the improbability of lending such a large sum without documentation.

Issue 3: Rebuttal of Presumption u/s 139
The appellant argued that the respondent's signature on the cheque entitled him to a presumption u/s 139 of the Negotiable Instruments Act. However, the respondent contended that the cheque was issued to Lakshmi Saraswathi Finance Company and was misused by the appellant, who worked as a collection boy. The High Court noted that the respondent successfully rebutted the presumption by probabilizing his defense and highlighting inconsistencies in the appellant's claims. The court emphasized that the appellant failed to prove the cheque was issued for a legally enforceable debt.

Conclusion:
The High Court confirmed the trial court's judgment of acquittal, concluding that the appellant did not prove the issuance of the cheque for a legally enforceable debt and lacked the financial status to lend the amount. The presumption u/s 139 was effectively rebutted by the respondent. The appeal was dismissed, and the judgment of acquittal was upheld.