2020 (1) TMI 935 - HC - Indian Laws

Dishonor of cheque - rebuttal of presumption u/s 139 - offence u/s 138 of Negotiable Instruments Act - acquittal of accused - rebuttal of presumption - legally enforceable debt or not - cross-examination of respondent - HELD THAT - After perusal of the whole statement of all the witnesses, it reveals that it has not been denied by the respondent before the trial Court that Ex.P/1, questioned cheque, has not been issued by him. He pleaded the defence only that he has falsely been implicated in this false case. Learned trial Court also not found that cheque (Ex.P/1) has not been issued by the respondent in favour of the appellant. Learned trial Court only concluded the fact that the cheque had not been issued for legally enforceable debt after considering so many case-laws - On the basis of evidence adduced by both the parties, this Court is of the view that the appellant succeeded to prove that the cheque (Ex.P/1) had been issued by the respondent in favour of the appellant. Whether questioned cheque had been issued for satisfying the legally recoverable debt or liabilities? - HELD THAT - Hon ble Apex Court in P. VENUGOPAL VERSUS MADAN P. SARATHI 2008 (10) TMI 598 - SUPREME COURT held that presumption can be rebutted on the basis of the evidence adduced by both parties and can be rebutted on the basis of preponderance of probabilities. This Court is of the view that Man Singh being a Government Servant not informed to the employer as also not mentioning this amount in the income tax return nor made entries in the accounts book of the shop that his wife is running and also did not disclose the name of persons from whom he collected the money nor submitted any transaction in writing exhibited for borrowing money not diposed that the huge amount of money received by cheque from his relatives in his account. If cash transaction of huge amount had been conducted by the appellant, strong burden is shifted upon him to show that he has received and provided the huge amount in legal way because before drawing the presumption, the appellant had to prove beyond doubt that he had transacted the money legally. On the basis of evidence came into the deposition of complainant Man Singh (PW-1), this Court is of the view that on the basis of facts came in the cross-examination of complainant, the complainant failed to prove that he had provided a legal debt to the respondent - On the basis of preponderance of probabilities, the respondent succeeded to establish the fact that he had not provided check for payment a legally enforceable debt - In these circumstances, cheque issued to the appellant is not for satisfied the payment of legally enforceable debt or liability. The respondent succeeds to rebut the presumption under Section 139 of N.I. Act. There should be legally enforceable debt between the parties and this Court is of the view that when complainant failed to prove these ingredients, no offence is made out against the respondent for the offence punishable under Section 138 of N.I. Act. This Court is not inclined to allow this appeal filed by the appellant/complainant against the order of acquittal passed by the trial Court - appeal dismissed.

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act (N.I. Act).
2. Presumption under Sections 139 and 118(a) of the N.I. Act.
3. Rebuttal of presumption and standard of proof.
4. Appellate court's jurisdiction in appeals against acquittal.

Detailed Analysis:

1. Legally enforceable debt under Section 138 of the N.I. Act:
The appellant filed a complaint under Section 138 of the N.I. Act, alleging that the respondent borrowed ?12,50,000 and issued a cheque which was dishonored due to insufficient funds. The trial court acquitted the respondent, finding that the appellant failed to prove the existence of a legally enforceable debt. The court noted inconsistencies in the appellant's testimony regarding the source and documentation of the loaned amount.

2. Presumption under Sections 139 and 118(a) of the N.I. Act:
The appellant argued that the trial court failed to properly apply the presumption under Sections 139 and 118(a) of the N.I. Act, which assumes the existence of a legally enforceable debt when a cheque is issued. The respondent admitted to issuing the cheque but claimed it was not for a legally enforceable debt. The trial court concluded that the presumption was rebuttable and required the respondent to provide evidence to the contrary.

3. Rebuttal of presumption and standard of proof:
The respondent's defense was that the case was false and he was innocent. He did not testify but presented his father as a witness. The trial court found that the respondent successfully rebutted the presumption by raising doubts about the appellant's ability to lend such a large sum. The court emphasized that the standard of proof for rebutting the presumption is based on the preponderance of probabilities, not beyond a reasonable doubt.

4. Appellate court's jurisdiction in appeals against acquittal:
The appellate court reviewed the evidence and found no compelling reason to overturn the trial court's acquittal. The court cited precedents emphasizing the limited jurisdiction of appellate courts in interfering with acquittals unless there are substantial and compelling reasons. The court noted that the trial court's findings were reasonable and supported by evidence.

Conclusion:
The appellate court dismissed the appeal, upholding the trial court's acquittal of the respondent. The court concluded that the appellant failed to prove the existence of a legally enforceable debt and that the respondent successfully rebutted the presumption under Sections 139 and 118(a) of the N.I. Act. The court emphasized the limited scope of appellate review in cases of acquittal and found no grounds to disturb the trial court's findings.

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