2022 (6) TMI 1208 - HC - Indian Laws

Dishonor of Cheque - existence of legally enforceable debt or not - acquittal of the accused - presumption of innocence - Section 138 of NI Act - HELD THAT - 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 a conclusion that the debt in question cannot be said to be legally enforceable debt and the complainant has failed to prove otherwise. It is observed by the learned trial Judge that in the present case, the complainant has not produced any documentary evidence to prove his case and hence, it cannot be believed that the complainant had a legal dues from the respondent accused. 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, considering the evidence on record, it is observed by the learned trial Judge that, in his cross-examination, the complainant has stated that he had given Rs.20 lakh to the accused, out of which, he had arranged Rs.2 lakh from Nathabhai Maganbhai Patel, Rs.2 lakh from Bharatkumar Narandas Patel and Rs.2 lakh from his friend Arvindbhai Chimanbhai Patel. Thus, he had taken an amount of Rs.6 lakh from others, however, to prove such a fact, the complainant has not examined any of above witnesses. On re-appreciation and reevaluation of the oral as well as the documentary evidence on record, 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 evidence on record and come to such a conclusion - the presumption under Section 139 of the NI Act merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability and existence of legally recoverable debt is not matter of presumption under the said section. Nonetheless, as said earlier, the complainant has failed to prove that the cheque was drawn towards legally enforceable debt. In the considered opinion of this Court, the complainant has failed to bring home the charge against accused for want of sufficient material. The findings recorded by the learned trial Judge do not call for any interference - 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 NI Act.
3. Evaluation and appreciation of evidence by the trial court.
4. Scope of interference by the appellate court in acquittal appeals.

Issue-wise Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881:
The appellant, the original complainant, alleged that the respondent borrowed Rs. 20,00,000 and issued a cheque, which was dishonored with the endorsement "Account Closed." The trial court concluded that the complainant failed to prove the existence of a legally enforceable debt. The court noted that the complainant did not provide any documentary evidence or credible explanation for the source of such a large amount of money. Additionally, a certificate (Exh. 50) indicated that no financial transaction occurred between the complainant and the respondent, further weakening the complainant's case.

2. Presumption under Sections 118(a) and 139 of the NI Act:
The court acknowledged that under Section 139 of the NI Act, there is a presumption that the cheque was issued for the discharge of a debt or liability. However, this presumption is rebuttable. The respondent successfully rebutted this presumption by questioning the complainant's financial capacity to lend Rs. 20,00,000 and highlighting inconsistencies in the complainant's statements. The court emphasized that the standard of proof for rebutting the presumption is preponderance of probabilities, which the respondent met.

3. Evaluation and appreciation of evidence by the trial court:
The trial court meticulously evaluated the evidence, noting several key points:
- The complainant's income and savings did not support the claim of lending Rs. 20,00,000.
- The complainant failed to produce witnesses who allegedly lent him part of the amount.
- The complainant's certificate (Exh. 50) contradicted his claim of a financial transaction with the respondent.
- The cheque was issued after the respondent's account was closed, raising doubts about its legitimacy.

4. Scope of interference by the appellate court in acquittal appeals:
The appellate court reiterated the principles governing interference in acquittal appeals, emphasizing that an appellate court should not disturb an acquittal unless the trial court's judgment is perverse or based on manifest illegality. The court cited several precedents, including *Mallikarjun Kodagali v. State of Karnataka* and *Chaman Lal v. State of Himachal Pradesh*, to support this principle. The court found that the trial court's judgment was neither perverse nor illegal and that the complainant failed to prove his case beyond reasonable doubt.

Conclusion:
The appellate court upheld the trial court's judgment, confirming the acquittal of the respondent. The complainant's failure to provide sufficient evidence of a legally enforceable debt and the successful rebuttal of the presumption under Section 139 by the respondent were pivotal in the court's decision. The court emphasized the high threshold for overturning an acquittal and found no compelling reason to interfere with the trial court's findings.