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2021 (11) TMI 444 - HC - Indian LawsDishonor of cheque - existence of legally enforceable debt or not - case of the defence is that the cheques were handed over only towards security in the course of the business transaction to one Siva Arasu and he had presented some of the cheques to this complainant - Section 138 of the Negotiable Instruments Act - HELD THAT - The accused has to owe a sum of ₹ 13,45,000/-, to her husband. According to her, a sum of ₹ 81,190/- is due payable under Sun Shine Trading Company and ₹ 5,13,994/- is due payable under Macsun India . As the accused never procure any order and that represents the two cheques and other two cheques namely one for a sum of ₹ 1,02,220/- and another cheque for a sum of ₹ 6,47,632/- are due in view of the interest payable on the advance amount - Admittedly, no books of accounts have been filed before the Court to show that the accused owed money as claimed by PW1 and there was an agreement to pay the interest amount in default of the repayment of the principal amount. Admittedly, she is not aware in the business transaction between the complainant and the accused and her husband is responsible for business activity. Furthermore, she has not produced books of accounts for the Company though she said she willing to produce the same and no calculation sheet has been filed to show the period of interest and rate of interest and principle amount - in view of the answer elicited in the cross examination of the PW1, the suggestive case of the defence that he has not received any amount from the complainant, a cheque that was given to complainant has also probablise the suggestive case to the preponderance of probability level that passing of consideration is doubtful as claimed by PW1. In the absence of any positive evidence to prove the preexisting legally enforceable debt, this Court does not find any reasons to interfere with the order passed by the Courts below - Appeal dismissed.
Issues:
- Appeal against the reversal of conviction under Section 138 of the Negotiable Instruments Act. - Dispute over the existence of a legally enforceable debt between the complainant and the accused. Analysis: 1. The appellant, a private complainant, filed a complaint under Section 138 of the Negotiable Instruments Act against the accused for a dishonored cheque. The accused was convicted by the Metropolitan Magistrate but later acquitted by the Sessions Court. The appeal challenges this acquittal. 2. The defense claimed that the cheques were given as security in a business transaction and were not meant for payment. The accused, being the proprietor of the Firm, argued that the complaint was not maintainable. However, the Court held that the complainant was entitled to the presumption under Section 138, which the accused needed to rebut. 3. The defense contended that the cheques were handed over as security to the complainant's husband, who then passed them on. The accused argued that the complaint was initiated at the behest of the husband. The complainant, in her testimony, detailed the amounts owed and the issuance of the cheques, including interest amounts. 4. The Court noted discrepancies in the complainant's testimony, such as the lack of production of company accounts to prove the debt and interest calculations. The complainant's lack of awareness of business transactions and failure to provide evidence supporting the debt weakened the case. 5. The Court found that the complainant failed to prove the existence of a legally enforceable debt, especially in the absence of concrete evidence and proper documentation. As a result, the appeal was dismissed, confirming the lower court's decision to acquit the accused based on the lack of evidence supporting the debt claim. 6. The judgment emphasized the importance of establishing a legally enforceable debt in cases under Section 138 of the Negotiable Instruments Act. Without sufficient evidence and documentation, the burden of proof falls on the complainant, and failure to substantiate the claim can lead to an acquittal, as seen in this case.
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