2022 (7) TMI 1114 - HC - Indian Laws

Dishonor of Cheque - Funds Insufficient - discharge of legally enforceable debt or not - presumption in favour of the holder of the cheque - rebuttal of presumption - acquittal of the accused - HELD THAT - In the present case, the complainant has been unable to establish his financial capacity to advance such a huge loan to the respondent/accused. In fact, he has categorically admitted that he did not possess any documents to establish the alleged transaction. This becomes even more glaring because the appellant is an educated person being an advocate. Further, the complainant has not been able to establish a close friendly relationship with the accused; he did not know the name of the wife of the accused, the details of his other family members or the residential address of the accused. It does not stand to reason that a person would advance a loan of Rs.15 lakhs to a virtually unknown person whose residential address is also not to his knowledge. Interestingly, he has not mentioned any specific date of the issuance of the friendly loan either in the examination-in-chief or in the body of the complaint. He has further been discrepant about when the cheque had been issued to him i.e. either at the time he had advanced the loan or 05 months thereafter, when he had sought the return of the said amount. A perusal of the cheque would also reveal that the signatures of the accused have been affixed with green ink while the particulars of the cheque have been filled with blank ink. This fact also remained unexplained by the accused. With respect to the involvement of Gurpartap Singh Wadal, it may be pertinent to mention here that the complainant himself had very close friendly relations with the said person, though he has tried to explain during his cross-examination that the relationship with the accused developed through the above-said Gurpartap Singh Wadala. Strangely, this fact too has not been mentioned in the complaint. The accused-respondent has been able to rebut the presumption of there being a legally enforceable debt - thus, the respondent accused has been able to rebut the presumption that the cheque was issued in the discharge of a legally enforceable debt and the view taken by the Trial Court while acquitting the accused is a reasonable view based on the evidence on the record and cannot be said to be perverse and as such is not required to be interfered with. The leave to appeal is hereby dismissed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Grant of leave to appeal against the judgment of acquittal.
3. Examination of the statutory presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act.
4. Analysis of the evidence and the defense presented by the accused.
5. Legal standards for interference in an appeal against acquittal.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The application for condonation of delay of 63 days in filing the appeal was allowed. The court stated, "For the reasons mentioned in the application, the same is allowed and the delay of 63 days in filing the instant appeal is hereby condoned."

2. Grant of Leave to Appeal Against the Judgment of Acquittal:
The appellant sought leave to appeal against the acquittal of the accused under Section 138 of the Negotiable Instruments Act. The facts presented by the complainant included the issuance of a cheque by the accused, which was dishonored due to insufficient funds. The trial court acquitted the accused, leading to the appellant's request for leave to appeal.

3. Examination of the Statutory Presumptions Under Sections 118(a) and 139 of the Negotiable Instruments Act:
The court discussed the statutory presumptions under Sections 118(a) and 139, which presume that a negotiable instrument was made for consideration and that the holder received the cheque for the discharge of debt unless proven otherwise. The court cited several Supreme Court judgments, emphasizing that these presumptions are rebuttable and the burden of proof lies on the accused to show that the cheque was not issued for a debt or liability.

4. Analysis of the Evidence and the Defense Presented by the Accused:
The trial court found that the accused successfully rebutted the presumption of the cheque being issued for a legally enforceable debt based on several points:
- The complainant failed to establish his financial capacity to advance the loan.
- The complainant could not prove a close relationship with the accused.
- No specific date of the loan was mentioned.
- Differences in the handwriting on the cheque were unexplained.
- The defense that the cheque was given to Gurpartap Singh Wadala as security and misused appeared probable.

The appellate court noted that the complainant admitted to not having documents to prove the transaction and failed to establish a close relationship with the accused. The complainant's inability to provide specific details about the loan and discrepancies in the cheque further weakened his case.

5. Legal Standards for Interference in an Appeal Against Acquittal:
The court emphasized the principles for interference in an appeal against acquittal. It noted that an appellate court has full power to review evidence but must be cautious, especially given the double presumption of innocence in favor of the accused. The court cited several Supreme Court judgments, highlighting that interference is justified only if the trial court's findings are perverse or based on irrelevant material.

The court concluded that the trial court's view was reasonable and based on evidence. The accused rebutted the presumption of a legally enforceable debt, and the trial court's judgment was not perverse. Therefore, the appellate court saw no reason to interfere with the acquittal.

Conclusion:
The appellate court dismissed the leave to appeal, affirming the trial court's judgment of acquittal. The accused successfully rebutted the presumption of the cheque being issued for a legally enforceable debt, and the trial court's findings were reasonable and supported by evidence.