2010 (3) TMI 1278 - HC - Indian Laws

Summary

Issues Involved:
1. Legally enforceable debt.
2. Acquaintance between complainant and accused.
3. Rebuttal of statutory presumptions.
4. Evaluation of evidence and statutory presumptions.
5. Sentence and compensation.

Summary:

1. Legally Enforceable Debt:
The appellant filed a complaint u/s 138 of the N.I. Act, alleging that the accused issued a cheque for Rs. 70,000/- which was dishonored due to "funds insufficient." The Special Court dismissed the complaint, stating that the transaction appeared suspicious and the complainant failed to establish a legally enforceable debt. The High Court noted that the complainant had the benefit of statutory presumptions u/s 118 and 139 of the N.I. Act, which were not satisfactorily rebutted by the accused.

2. Acquaintance Between Complainant and Accused:
The Special Court questioned the likelihood of the complainant lending Rs. 70,000/- to an unknown person. However, the High Court found evidence indicating that the complainant's brother had close business relations with the accused, and the complainant had advanced the loan based on this relationship.

3. Rebuttal of Statutory Presumptions:
The accused claimed that the cheque was stolen and misused by the complainant's brother. The High Court found this defense to be an afterthought and evasive, noting the absence of any police complaint regarding the alleged theft. The statutory presumptions in favor of the complainant were not satisfactorily rebutted by the accused.

4. Evaluation of Evidence and Statutory Presumptions:
The High Court emphasized that the trial court must properly evaluate evidence, bearing in mind the statutory presumptions under Sections 118 and 139 of the N.I. Act. The complainant had established the issuance and dishonor of the cheque, and the accused failed to provide sufficient evidence to rebut the presumption of a legally enforceable debt.

5. Sentence and Compensation:
The High Court reversed the acquittal, finding the accused guilty of the offense u/s 138 of the N.I. Act. The accused was sentenced to imprisonment till the rising of the court and ordered to pay Rs. 70,000/- as compensation plus Rs. 10,000/- as prosecution costs within two months. In default of payment, the accused would undergo simple imprisonment for three months. The accused was directed to appear before the Judicial Magistrate First Class, Nagpur, for execution of the sentence.

Appeal allowed accordingly.