2021 (8) TMI 826 - HC - Indian Laws

Dishonor of Cheque - sufficient material to proceed against the accused, present or not - failure to prove the cheque - legally enforceable debt or not - acquittal of the accused - rebuttal of presumption - preponderance of probabilities - HELD THAT - The complainant has not denied the fact that accused is financially sound person. He has also not denied that accused entrusted him the furniture work and it is the specific contention of the accused that, initially the cheque was issued for ₹ 2,50,000/- towards furniture work executed by the complainant and subsequently, as the work was only worth of ₹ 1,50,000/-, separate cheque was issued with a request to return other cheque for ₹ 2,50,000/-. Admittedly, the cheque for ₹ 1,50,000/- was encashed by the complainant. The complainant initially denied that payment of ₹ 1,50,000/- towards furniture work, but later tried to improve his version by claiming that it was pertaining to repayment of earlier loan. When there was earlier loan of ₹ 1,50,000/- due as on April 2009, it is hard to accept that he has again advanced hand loan of ₹ 2,50,000/- to the accused. He has not given any explanation as to when this amount of ₹ 1,50,000/- was advanced. Admittedly, if the version of the complainant is taken that repayment of ₹ 1,50,000/- pertaining to earlier hand loan, he would have referred it in the complaint and in April 2009, when there was due of ₹ 1,50,000/- in respect of earlier hand loan, he would not have ventured to advance further hand loan of ₹ 2,50,000/-. The accused need not rebut the presumption on the principles of beyond all reasonable doubt, but he can rebut the presumption only on the basis of preponderance of probabilities. Looking into the rival contentions and considering the evidence of P.Ws.1 and 2, it is evident that their evidence is not trustworthy and the defence of the accused is more probable rather than the claim made by the complainant. Hence, the presumption under Section 139 of N.I.Act is rebutted by the accused. Then again burden shifts on the complainant to establish the existence of legally enforceable debt, but that is not forthcoming. There is no doubt that initially there is a statutory presumption and reverse onus is on the accused - The accused by leading cogent evidence and by cross-examining P.Ws.1 and 2 has rebutted the presumption available in favour of the complainant/prosecution under Section 139 of N.I.Act. Hence, again onus shifts on the complainant to establish the existence of legally enforceable debt, but he has not placed any material in this regard. The complainant has failed to establish the existence of legally enforceable debt and accused rebutted the initial statutory presumption available in favour of the complainant. The trial court after marshalling oral and documentary evidence has come to a proper conclusion regarding complainant having failed to discharge regarding advancing hand loan and existence of legally enforceable debt. Hence, the trial court has rightly acquitted the accused and the judgment of acquittal passed by the trial court is neither capricious, erroneous nor suffers from any illegality. Appeal dismissed.

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act.
2. Rebuttal of presumption under Section 139 of the Negotiable Instruments Act.
3. Evaluation of evidence and burden of proof.

Issue-Wise Detailed Analysis:

1. Legally Enforceable Debt under Section 138 of the Negotiable Instruments Act:
The complainant and the accused had a financial relationship, with the accused allegedly availing a hand loan of ?2,50,000/- in April 2009. The accused issued a cheque for the same amount, which was dishonored due to insufficient funds. Despite legal notice, the accused did not repay the amount, leading to the filing of a complaint under Section 200 of Cr.P.C. The trial court found that the complainant failed to prove that the cheque was issued towards a legally enforceable debt and acquitted the accused.

2. Rebuttal of Presumption under Section 139 of the Negotiable Instruments Act:
The complainant argued that the issuance and signature on the cheque were undisputed, invoking the mandatory presumption under Section 139 of the N.I. Act. The accused contended that the cheque was issued for furniture work worth ?1,50,000/- and not as a loan. The accused's defense included the repayment of ?1,50,000/- by cheque and the misuse of the initial cheque by the complainant. The trial court noted inconsistencies in the complainant's evidence and the lack of specific dates for the loan transaction, concluding that the accused successfully rebutted the presumption.

3. Evaluation of Evidence and Burden of Proof:
The complainant's evidence included his testimony and that of P.W.2, who claimed to witness the loan transaction. However, inconsistencies and lack of specific dates weakened their credibility. The accused's defense was supported by D.W.2 and documentary evidence, including bank statements. The trial court emphasized that the complainant did not mention the alleged earlier loan of ?1,50,000/- in his complaint or examination-in-chief. The court found the accused's defense more probable, noting that the complainant's failure to mention significant details further weakened his case.

Conclusion:
The High Court upheld the trial court's judgment, agreeing that the complainant failed to establish the existence of a legally enforceable debt and that the accused successfully rebutted the presumption under Section 139 of the N.I. Act. The court emphasized that the complainant did not meet the burden of proof required to overturn the acquittal.

Order:
The appeal was dismissed, and the judgment and order of acquittal dated 21.10.2011 passed by the Principal Civil Judge and Principal JMFC, Dharwad in C.C.No.691/2009 were confirmed.

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