2022 (2) TMI 1421 - HC - Indian Laws

Dishonour of cheque - insufficient funds - legally enforceable debt or not - rebuttal of presumption under Section 139 NIA - mention about a friendly loan in his Income Tax Returns or not? - Section 165 of the Indian Evidence Act, 1872 - HELD THAT - There is a legal presumption of consideration under section 118(a) of NIA. The court shall presume that every negotiable instrument was made or drawn for consideration and that every such instrument, when it has been accepted, indorsed, negotiated, or transferred, was accepted, indorsed, negotiated, or transferred for consideration. Thus, the burden is on the accused to rebut such presumption. The accused had rebutted such presumption in the cross-examination of the complainant when he appeared as CW-1. Such presumption was rebutted by putting questions to the complainant and explaining the circumstances under section 313 CrPC. A perusal of the cross-examination reveals that the complainant admitted that he filled the cheque in his hand, and after that, the accused had put his signatures - the burden was primarily on the complainant to prove the debt amount. It was incumbent upon the complainant to tender in evidence some accounts, ledger, statement, or paper on record whatsoever, but he did not do so. He was silent about the loans being advanced at multiple dates. On being cross-examined, he did admit that the loans were not given on any particular date but various dates. The stand of the accused was that he did take loans on various dates, but every month, the complainant would enhance the amount by one lakh. Thus, the stand of the accused appears to be more probable and truthful than the stand of the complainant. Although under section 118 NIA, there is a presumption of consideration, the presumption would come only when the legal notice and a complaint mention such considerations. The complainant must explain the debt amount and whether it was legally enforceable debt, or other loans, as stated under section 118 NIA - the burden was on the complainant to precisely mention the principal amount and the interest he calculated. The complainant did not mention the said calculations in any of the aforementioned documents. As such, the complaint lacks material particulars, and it deserves dismissal. It was not even worth taking cognizance. There is no merit in this application seeking special leave to appeal and accordingly, the same is dismissed.

Summary

Issues:
Challenging acquittal for dishonor of cheque under Section 138 NIA; Rebuttal of legal presumption under Section 139 NIA; Violation of Punjab Registration of Money-lender's Act 1938.

Analysis:
1. The complainant challenged the respondent's acquittal for dishonor of a cheque under Section 138 NIA. The complainant proved sending a legal notice after the cheque was dishonored due to insufficient funds. The trial court took cognizance of the offence and proceeded against the accused, issuing a notice of accusation.

2. The legal presumption under Section 139 NIA was rebutted by the accused during cross-examination of the complainant. The complainant admitted to various loan dates but failed to provide specific details in the complaint, legal notice, or affidavit. The accused claimed to have received money from the complainant but disputed the interest calculation.

3. The trial court dismissed the complaint citing a violation of the Punjab Registration of Money-lender's Act 1938, stating that charging interest made the debt legally unenforceable. The complainant failed to provide evidence of the debt amount and interest calculations, leading to the dismissal of the complaint.

4. The High Court upheld the trial court's decision, emphasizing the complainant's failure to provide material particulars regarding the principal amount and interest calculations. The court ruled that without clear documentation of the debt, the complaint lacked merit and deserved dismissal.

5. The court clarified that findings on the violation of the Punjab Registration of Money-lender's Act 1938 would only be relevant if the complainant proved a legally enforceable debt. As the complainant failed to establish the debt amount conclusively, the court found no merit in the application and dismissed it.

6. In conclusion, the High Court dismissed the application seeking special leave to appeal, upholding the trial court's decision to dismiss the complaint. All pending applications were disposed of accordingly.