2019 (7) TMI 2042 - HC - Indian Laws

Dishonour of Cheque - challenge to judgment of conviction and sentence - failure to consider the grounds contained in the revision application - violation of principles of natural justice - whether the applicant deserves to be acquitted from charge under Section 138 of the Act or not? - HELD THAT - There are number of lapses and infirmities in the evidence of complainant. The complainant has not been able to prove source of Rs. 10,00,000-00 for giving the same as loan to the applicant, he admits to have not executed any document pertaining to such huge loan transaction and neither has he examined any witness in support. The Apex Court in the citation of John K. Abraham v/s Simon C. Abraham 2014 (1) TMI 528 - SUPREME COURT considered another such case in which the complainant did not remember the date of loan transaction, the complainant had similarly states the source of fund from sale of family property but no documents pertaining to such sale had been filed and there were some other lacuna as well. The Apex Court acquitted the accused observing ' It has to be stated that in order to draw the presumption under section 118 read alaong with 139 of the Negotiable Instruments Act, the burden was heavily upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.' - The facts of the case in hand are akin to that of the case of John K. Abraham. The case in hand also suffers from the short comings which prompted the Apex Court in the case referred to above for passing orders of acquittal. The accused/applicant has stated that he had not received any notice from the complainant. The complainant in para 1 of his cross-examination admits that he has not filed the acknowledgement which containing the signatures of the applicant even though registered notice was sent to the applicant. The Courts below have not seriously gone into the inherent weakness of the case of the complainant. The Court failed to consider that presumptions under Sections 118 and 139 of the Act are not attracted in absence of prima-facie establishment of a transaction showing legal liability of the applicant - Thus, the grounds contained in the revision application are allowed. It is held that the complainant has not been able to prove that the applicant had taken legally recoverable debt from the complainant which he failed to return due to dishonour of cheque drawn by him. Consequently the applicant is acquitted for committing offence under Section 138 of the Act. Any amount deposited by the applicant be returned to him. Applicant, if in jail, is directed to be released forthwith, if not required in any other case - The revision application stands allowed.

Summary

Issues:
Challenge to conviction under Section 138 of the Negotiable Instruments Act based on insufficiency of evidence and legal errors.

Analysis:
The judgment sought to dispose of a criminal revision challenging the conviction of the applicant under Section 138 of the Negotiable Instruments Act. The applicant had borrowed Rs. 10,00,000 from the complainant, which was evidenced by a cheque that bounced due to insufficient funds. The complainant alleged non-repayment, leading to the criminal case. The applicant contended that the lower courts erred in rejecting evidence verification applications and failed to consider crucial aspects. The main issue was whether the grounds raised in the revision justified the applicant's acquittal.

The complainant's evidence was scrutinized, revealing significant lapses. The complainant failed to establish the source of the loan amount, did not provide documentary evidence of the transaction, and did not examine a witness to support his claims. The court cited precedents where similar deficiencies led to acquittals, emphasizing the burden on the complainant to prove the transaction's authenticity and the accused's legal liability. The court highlighted the necessity of establishing a prima facie case for invoking presumptions under the Act.

The judgment echoed the inadequacies in the complainant's case, emphasizing the absence of crucial details such as the loan date, lack of proof of funding source, and absence of transaction documents. The court noted the questionable nature of a large cash transaction and the failure to present essential documents like Income Tax Returns. The courts below were criticized for not delving into these weaknesses and not upholding the burden of proof required for invoking statutory presumptions.

Ultimately, the revision application was allowed, and the applicant was acquitted due to the complainant's failure to prove the legally recoverable debt and the dishonored cheque's legal liability. The applicant was directed to be released if in custody, and any deposited amount was to be returned. The order was to be sent to the Trial Court for implementation.