2021 (11) TMI 278 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - legally enforceable debt or not - Acquittal of accused - presumption of innocence or not - HELD THAT - It is well settled by catena of decisions that an appellate Court has full power to review, re-appreciate and consider the evidence upon which the order of acquittal is founded. However, the Appellate Court must bear in mind that in case of acquittal, there is prejudice in favour of the accused, firstly, the presumption of innocence is available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly, the accused having secured his acquittal, the presumption of his innocence is further reaffirmed and strengthened by the trial Court. In the case under NI Act, the cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whole or in part, of any debt or other liability. Further, explanation to this section defines the debt and other liability to mean a legally enforceable debt or other liability. In this context, after due appreciation and evaluation of the evidence on record, the learned trial Judge has come to such a conclusion that the debt cannot be said to be legally enforceable debt and the complainant has failed to prove otherwise. Eventually, the learned trial Judge has opined that it cannot be overruled that the cheque was given for security. Further, the respondent - accused has also examined independent witnesses and considering their depositions in detail, the learned trial Judge has come to the conclusion that defence of accused is probable. In the overall facts and circumstances of the case, the learned trial Judge has come to the conclusion that the debt cannot be said to be the legally enforceable debt, which is sine qua non in such matters and the complainant has failed to prove the same beyond reasonable doubt. The presumption Under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. In the instant case, the accused has succeeded in rebutting the presumption, showing preponderance of probability by leading evidence and hence, onus shifts upon the complainant to prove otherwise, however, as said earlier, the complainant has failed to prove that the cheque was drawn towards legally enforceable debt - when the respondent - accused has succeeded in rebutting the presumption, the learned trial Judge has rightly come to the conclusion that the said provision would be of no help to the complainant. It transpires that the complainant has failed to prove the case against the accused beyond reasonable doubt inasmuch as the ingredients of the offence alleged are not fulfilled. The Court has gone through in detail the impugned judgment and order and found that the learned trial Judge has meticulously considered the depositions of all the witnesses and came to such a conclusion and in the considered opinion of this Court, the learned trial Judge has rightly come to such a conclusion, which do not call for any interference at the hands of this Court. The complainant has failed to bring home the charge against accused for want of sufficient material - Appeal dismissed.

Summary

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.
2. Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881.
3. Standard of proof for rebutting the presumption.
4. Appellate Court's scope of interference in acquittal appeals.

Detailed Analysis:

1. Legally Enforceable Debt Under Section 138 of the Negotiable Instruments Act, 1881:
The complainant alleged that the respondent borrowed ?1,50,000 for business purposes and issued a cheque that was dishonored due to insufficient funds. The trial court acquitted the accused, concluding that the debt was not legally enforceable. The trial court noted that the complainant did not take legal action when the possession of land was not handed over despite the sale deed being executed. This raised doubts about the enforceability of the debt. The appellate court upheld this finding, emphasizing that the complainant failed to prove the debt was legally enforceable beyond a reasonable doubt.

2. Presumption Under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881:
The appellate court referenced the presumption under Section 139, which mandates that once the execution of the cheque is admitted, it is presumed to be for the discharge of any debt or liability. However, this presumption is rebuttable. The trial court found that the accused successfully rebutted the presumption by showing the cheque was given for security purposes, not for a legally enforceable debt. The complainant failed to counter this rebuttal effectively.

3. Standard of Proof for Rebutting the Presumption:
The standard of proof for rebutting the presumption under Section 139 is that of preponderance of probabilities. The accused does not need to prove his defense beyond a reasonable doubt but must show it is more probable than not. The trial court found that the accused met this standard by providing credible evidence and witness testimonies. The appellate court agreed, noting that the complainant did not provide sufficient evidence to disprove the accused's defense.

4. Appellate Court's Scope of Interference in Acquittal Appeals:
The appellate court reiterated that it has the full power to review and re-appreciate the evidence but must bear in mind the presumption of innocence in favor of the accused. The court should not interfere with an acquittal unless the trial court's decision is perverse or suffers from manifest illegality. The appellate court found no such issues in the trial court's judgment. It emphasized that the trial court meticulously considered all evidence and witness depositions, leading to a well-reasoned acquittal.

Conclusion:
The appellate court dismissed the appeal, confirming the trial court's judgment of acquittal. The complainant failed to prove the debt was legally enforceable, and the accused successfully rebutted the presumption under Section 139. The trial court's findings were neither perverse nor illegal, and thus, no interference was warranted.