2021 (8) TMI 246 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - it is alleged that the accused has cheated the complainant by issuing a cheque having knowledge that he had no sufficient funds - Section 138 of N.I. Act - Whether the complainant has proved beyond all reasonable doubt that accused has committed an offence punishable under Section 138 of Negotiable Instrument Act? - HELD THAT - It is an undisputed fact that the cheque belongs to the accused and there is no dispute regarding signature on the cheque. Hence the presumption under Section 139 of N.I. Act is available to the accused - It is also evident that the accused for rebutting the presumption need not enter into witness box but can rebut the presumption on the basis of the available materials placed on record. Apart from that it is also important to note here that the complainant is required to prove his case beyond all reasonable doubts. But for rebuttal the same standard is not applicable and the accused is required to rebut the presumption on the basis of preponderance of probability. The presumption under Section 139 of N.I. Act is a statutory rebuttal presumption. Since Ex. P3 is admitted the presumption is in favour of the complainant. Admittedly the initial presumption is in favour of the complainant and reverse onus clauses become operative and obligations shifts upon the accused to rebut the said presumption. In the instant case also the accused by way of cross examining the complainant has exposed him and that itself establishes that presumption is rebutted - The complainant though running a finance company but he has advanced a huge loan to accused in his individual capacity. Secondly there is no evidence to prove that he was possessing such a huge amount in his house and further it is hard to accept that he has advanced such a huge amount of 4, 25, 000/- as a hand loan to accused without charging any interest that too when the accused was a defaulter in respect of loan obtained by him in Saptagiri Finance Company. Under these circumstances looking to the facts and circumstances of the case it is evident that the complainant has failed to establish that the cheque was issued towards discharge of legally enforceable debt so as to attract the ingredients of Section 138 of N.I. Act. The learned Magistrate has analyzed the oral and documentary evidence in proper perspective and also dealt with the citations in detail. He has properly appreciated the oral and documentary evidence including the principle of reverse onus and come to a just conclusion that presumption under Section 139 of N.I. Act was rebutted by the accused. Hence he has justified in acquitting the accused. Appeal dismissed.

Summary

Issues Involved:
1. Whether the accused committed an offence under Section 138 of the Negotiable Instruments Act, 1881.
2. Whether the judgment of acquittal by the trial court calls for interference.

Issue-Wise Detailed Analysis:

1. Whether the accused committed an offence under Section 138 of the Negotiable Instruments Act, 1881:

The complainant alleged that the accused, needing money to clear personal debts, borrowed ?4,25,000 in November 2010 and issued a cheque dated 02.11.2012 for repayment. The cheque was dishonored due to insufficient funds, leading to a legal notice and subsequent complaint under Section 200 of Cr.P.C. The trial court acquitted the accused, prompting this appeal.

Prosecution Evidence:
- The complainant was examined as PW.1, supported by PW.2, and relied on nine documents (Exs. P1 to P9), including the promissory note (Ex. P1), acknowledgment receipt (Ex. P2), the dishonored cheque (Ex. P3), and bank endorsement (Ex. P4).
- The accused denied the allegations, claiming he had repaid a smaller loan of ?50,000 and the cheque was given as security for unpaid interest.

Defense Evidence:
- The accused testified as DW.1 and presented five documents (Exs. D1 to D5), including previous complaints filed by the complainant under Section 138 of N.I. Act, suggesting the complainant's involvement in money lending.

Court's Findings:
- The court noted discrepancies in the complainant's statements, lack of specific dates for the loan, and absence of the loan amount in income tax returns.
- The complainant's failure to produce bank statements or evidence of financial capacity to lend such a large sum raised doubts.
- The court observed that the complainant was involved in illegal money lending, supported by Exs. D1 and D3, which showed loans given to other individuals.
- The accused successfully rebutted the presumption under Section 139 of N.I. Act by highlighting these inconsistencies and presenting a plausible defense.

2. Whether the judgment of acquittal by the trial court calls for interference:

The appellant argued that the trial court failed to properly consider the presumption under Section 139 of N.I. Act and the evidence presented. However, the court found that the trial court had correctly analyzed the evidence, noting:
- The complainant's inability to prove the loan's advancement date and financial capacity.
- The improbability of advancing a large sum without interest and the complainant's involvement in illegal money lending.
- The accused's plausible defense that the cheque was issued as security for a smaller loan, not the alleged ?4,25,000.

The appellate court concluded that the trial court's judgment of acquittal was justified and did not warrant interference.

Conclusion:
The appeal was dismissed, and the judgment of acquittal by the IV Additional Civil Judge and JMFC, Kalaburagi, was confirmed. The court emphasized the complainant's failure to establish the cheque was issued for a legally enforceable debt, thus upholding the acquittal of the accused.