2021 (8) TMI 377 - HC - Indian Laws

Dishonor of cheque - insufficiency of funds - existence of a legally enforceable debt or not - rebuttal of presumption - HELD THAT - The alleged financial incapacity of the complainant to lend the loan as canvassed by the learned counsel for the petitioner/accused would not come to the forefront. However, a reading of the evidence led by the parties, more particularly of PW-1 would go to show that, she joined by her husband is running a Provision Store wherein she could able to make out a savings of a sum of ₹ 2,000/- per month and that, she also has got income from her mother's house in the form of sharing the lease amount of Mango garden being maintained by her mother, has remained specifically un-disputed and un-denied. From that evidence, though it can be inferred that the complainant had financial capacity to lend such a huge sum to the accused, still, the alleged financial capacity would not make out a case for her against the accused, proving the alleged guilt of the accused for the offence punishable under Section 138 of the N.I. Act. Since, the accused could able to successfully rebut the presumption formed in favour of the Crl.R.P.No.3/2019 complainant and as the complainant could not able to prove the alleged loan transaction with the accused, it has to be held that, the complainant has failed to prove the alleged guilt against the accused. Thus, the interference at the hands of this Court in the impugned judgments is warranted. The Criminal Revision Petition is allowed.

Summary

Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act.
2. Legally enforceable debt.
3. Rebuttal of presumption.
4. Financial capacity of the complainant.
5. Variations in evidence and legal notice.

Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act:
The petitioner was tried and convicted by the Trial Court for the offence under Section 138 of the Negotiable Instruments Act, 1881, for issuing a cheque that was dishonored due to insufficient funds. The conviction was upheld with modifications by the Sessions Judge's Court. The petitioner sought revision of these judgments.

2. Legally Enforceable Debt:
The complainant alleged that the accused issued a cheque for ?2,00,000 towards repayment of a loan. The cheque was dishonored, and a legal notice was issued, which the accused did not respond to. The Trial Court and Sessions Judge's Court found the accused guilty based on the presumption of a legally enforceable debt under Section 139 of the N.I. Act.

3. Rebuttal of Presumption:
The accused contested the existence of the loan transaction, claiming the cheque was issued to his sister as security and misused by the complainant. The accused's counsel argued that the complainant's evidence was vague and inconsistent, particularly regarding the loan amount and repayment terms. The accused successfully rebutted the presumption by highlighting discrepancies in the complainant's statements and evidence.

4. Financial Capacity of the Complainant:
The complainant's financial capacity to lend the alleged loan was questioned. Although the complainant claimed to have sufficient income from a provision store and other sources, this did not conclusively prove the loan transaction. The court noted that financial capacity alone does not establish the accused's guilt under Section 138 of the N.I. Act.

5. Variations in Evidence and Legal Notice:
Significant variations were found between the complainant's legal notice and her testimony. The legal notice mentioned a loan of ?2,00,000, while the complainant later stated the loan was only ?1,00,000. Additionally, the complainant's actions, such as presenting the cheque for realization on the same day the loan was allegedly given, contradicted her claim that the loan was repayable in fifteen days. These inconsistencies cast doubt on the complainant's case.

Conclusion:
The court found that the complainant failed to prove the alleged loan transaction and the accused successfully rebutted the presumption of a legally enforceable debt. Consequently, the judgments of the Trial Court and Sessions Judge's Court were set aside, and the accused was acquitted of the offence under Section 138 of the N.I. Act.