2024 (1) TMI 1287 - HC - Indian Laws

Dishonour of cheque for want of sufficient funds - Challenging the conviction and sentence for the offence u/s 138 of the N.I Act - Onus to prove financial capacity - HELD THAT - Complainant has not chosen to produce his account extract to show that immediately prior to the lending of Rs.3.5 lakhs to the accused he was in receipt of Rs.4,80,000/- towards sale consideration of the tempo. He has also not chosen to examine the purchaser Prabhakar. When questioned whether he is ready to examine the said Prabhakar, the complainant has replied that Prabhakar is not ready to come and give evidence. Though the complainant has claimed that the amount of Rs.3.5 lakhs paid to the accused was withdrawn from his account, standing in Corporation Bank and there is no difficulty for him to produce the same. However, the complainant has not produced his account extract to evidence the said fact. It would have been sufficient for the complainant to produce the said account extract to establish Rs.3.5 lakhs paid to the accused was withdrawn by him from his account. Thus, the complainant has failed to prove his financial capacity, despite making a vain attempt to prove that a vehicle was sold for Rs.4,80,000/- and out of the said amount, he lent Rs.3.5 lakhs to the complainant. In the complaint, the complainant has specifically pleaded that the sale of tempo was made on 18.05.2015 and the loan was advanced during January 2016 and the accused has issued the cheque on 14.07.2016. However, during his cross-examination, the complainant has stated that accused gave him cheque during January 2016. This also creates doubt as to the veracity of complainant s case. Anyhow, having failed to prove his financial capacity, the complainant has failed to discharge the burden placed on him beyond reasonable doubt. The trial Court as well as the Session Court have failed to examine the oral and document evidence placed on record in proper perspective. They have swayed away by the fact that presumption under Sections 118 and 139 of N.I. Act is operating in favour of the complainant. But both Courts have failed to examine whether the complainant has proved his financial capacity or not, and thereby fell into error. Consequently, the impugned order has caused gross miscarriage of justice, manifest illegality and suffers from perversity calling for interference by this Court under exercise of revision jurisdiction. In the result, the impugned judgments and orders of trial Court as well as the Sessions Court are liable to be set aside and the accused is entitled for acquittal. Petition filed by the petitioner u/s 397 r/w 401 CrPC is allowed.

Summary

Issues Involved:
The petition filed challenging the conviction and sentence for the offence u/s 138 of the N.I Act imposed by the trial Court, confirmed by the Sessions Court.

Summary:

Complainant's Case:
The complainant alleged lending Rs.3.5 lakhs to the accused, leading to a dishonoured cheque and subsequent legal action. The accused denied the transaction and acquaintance with the complainant, questioning the financial capacity of the complainant to lend such a sum. The burden of proof shifted to the complainant to establish financial capacity, as per the APS Forex case. The complainant's attempt to prove financial capacity through a vehicle sale was deemed insufficient due to lack of evidence.

Accused's Defence:
The accused disputed the transaction and the complainant's financial capacity, claiming a different loan transaction with a blank cheque. The Courts failed to properly assess the evidence and the burden of proof on financial capacity, leading to a miscarriage of justice and perversity in the judgments.

Judgment:
The High Court allowed the petition, setting aside the judgments of the trial Court and Sessions Court. The accused was acquitted of the offence u/s 138 of the N.I Act, with the bail bond discharged. The Court directed the return of records to the respective lower Courts.