2007 (2) TMI 722 - SC - Indian Laws

Summary

Issues Involved:
1. Whether the cheque issued by the appellant was in discharge of any debt or liability.
2. Whether the presumption u/s 139 of the Negotiable Instruments Act was correctly applied.
3. Whether the High Court was justified in reversing the acquittal by the Trial Court.

Summary:

Issue 1: Discharge of Debt or Liability
The appellant was charged u/s 138 of the Negotiable Instruments Act, 1881, for issuing a cheque of Rs. 1 lakh, which was dishonored due to "funds insufficient." The appellant contended that the cheque was not for any debt but was issued as part of a property sale transaction with the respondent's wife. The Trial Judge found the appellant's defense probable, noting that the cheque might have been a signed blank cheque issued as security.

Issue 2: Presumption u/s 139 of the Act
The High Court reversed the Trial Court's acquittal, stating that the appellant failed to discharge the burden of proof u/s 138 and 139 of the Act. The High Court emphasized that the appellant did not explain the issuance of the cheque in her reply to the legal notice. However, the Supreme Court noted that the presumption u/s 139 is rebuttable and can be countered by raising a probable defense, which the appellant did by presenting evidence and circumstances that questioned the existence of the debt.

Issue 3: Justification of High Court's Reversal
The Supreme Court observed that the High Court did not adequately address the reasonings of the Trial Judge, who had found the appellant's defense credible. The Supreme Court reiterated that when two views are possible, the High Court should not interfere with an acquittal unless the findings are perverse. The Supreme Court found the High Court's interference unjustified and reinstated the Trial Court's acquittal.

Conclusion:
The Supreme Court set aside the High Court's judgment, reinstating the acquittal of the appellant, and allowed the appeal.