2018 (9) TMI 996 - HC - Indian Laws

Dishonor of Cheque due to insufficiency of funds - repayment of loan - Order of acquittal - Section 138 of the Negotiable Instruments Act, 1881 - Held that - There is a material contradiction in the complaint, proof affidavit filed for Chief-examination and Cross-examination. The appellant has not stated any specific date either in the notice, complaint or in the proof affidavit, but he has simply stated that the respondent borrowed a sum of ₹ 6,00,000/- during the year 2006 for his business development as hand loan on oral promise to repay the same shortly. Secondly, since the appellant repeatedly demanded to repay the said amount orally, the respondent instead of repaying the loan amount he issued a cheque dated 23.11.2006 bearing No.768492 dated 23.11.2006, drawn on ICICI Bank, Pricol Complex, Periyanaickenpalayam, Coimbatore. Further, the appellant, in his cross examination, has stated that the respondent issued post dated cheque dated 23.11.2006 on 01.03.2006, but, no where, he has stated that the respondent issued a post dated cheque on 01.03.2006 itself. It is well settled law that the appellant/complainant has to prove the case in the manner known to law. Even though, the respondent denied the case, he has not come forward to examine any witness to deny the execution of the cheque. Though the appellant alleged the borrowal of money and the issuance of cheque, he has not automatically entitled to the relief sought for in the complaint, unless he proved his case. There is a material contraction in the materials placed by the appellant namely, the complaint, proof affidavit and evidence. Even though, the respondent denied the borrowal and issuance of the cheque in the notice itself, the appellant has not stated anything either in the complaint or in the proof affidavit about the specific date of borrowal and date of issuance of post dated cheque. The appellant has not established his case. Hence, the trial Court found that the respondent is entitled for acquittal and there is no need to interfere with the judgment passed by the Court below - appeal dismissed.

Summary

Issues Involved:
1. Alleged loan of ?6,00,000/- and issuance of cheque.
2. Dishonour of cheque due to "insufficient funds".
3. Legal notice and subsequent reply.
4. Material contradictions in the complainant's statements.
5. Allegation of cheque forgery by the respondent.
6. Evaluation of evidence and burden of proof.

Detailed Analysis:

1. Alleged Loan and Issuance of Cheque:
The appellant claimed that the respondent borrowed ?6,00,000/- in 2006 for business development and issued a cheque dated 23.11.2006 to discharge the debt. The cheque was presented for collection but was dishonoured due to insufficient funds. The appellant issued a legal notice on 28.11.2006, to which the respondent replied denying the loan and alleging forgery.

2. Dishonour of Cheque:
The cheque bearing No.768492, drawn on ICICI Bank, was returned with the endorsement "Funds insufficient". The appellant presented the cheque through Canara Bank, which issued a return memo and debit advice confirming the dishonour.

3. Legal Notice and Subsequent Reply:
The appellant issued a legal notice on 28.11.2006, demanding repayment. The respondent replied on 11.12.2006, denying the loan and alleging that the cheque was forged. The appellant sent a rejoinder on 14.12.2006, reiterating the demand for repayment.

4. Material Contradictions in the Complainant's Statements:
The trial court noted discrepancies in the appellant's statements regarding the date and circumstances of the loan and issuance of the cheque. The appellant's complaint, proof affidavit, and cross-examination contained inconsistent details about the loan date and the issuance of the post-dated cheque.

5. Allegation of Cheque Forgery by the Respondent:
The respondent contended that the cheque was forged by the appellant, who had access to the respondent's shop and obtained an old cheque leaf from 2003. The respondent argued that the cheque was filled with false details and did not bear his genuine signature.

6. Evaluation of Evidence and Burden of Proof:
The trial court found that the appellant failed to prove the loan and issuance of the cheque beyond reasonable doubt. The court highlighted the difference in ink used for the signature and other details on the cheque, supporting the respondent's forgery claim. The appellant did not provide specific dates or consistent details about the loan and cheque issuance in his complaint or affidavit.

The court emphasized that in criminal cases, the prosecution must prove the case beyond reasonable doubt. The respondent's denial and the material contradictions in the appellant's evidence created sufficient doubt. The court concluded that when two views are possible, the one favouring the accused should be considered.

Conclusion:
The appeal was dismissed, and the judgment of acquittal by the trial court was confirmed. The appellant's failure to provide consistent and credible evidence led to the dismissal of the complaint under Section 138 of the Negotiable Instruments Act, 1881. The respondent was acquitted due to the reasonable doubt created by the inconsistencies and allegations of forgery.