2024 (6) TMI 380 - HC - Indian Laws

Dishonour of Cheque - acquittal of accused of offence u/s 138 of the NI Act - failure to prove the existence of a legally recoverable debt from the side of the accused to the complainant - rebuttal of statutory presumptions - HELD THAT - A perusal of the complaint and the evidence of PW1 in chief examination clearly shows that the nature of the transaction alleged in the complaint and the chief affidavit of PW1 does not tally with the nature of the transaction mentioned in Exhibit P7, hire purchase agreement. PW1 has categorically admitted in cross examination that he is not in a position to depose regarding the entire matters in connection with the transactions between the accused and the complainant and he is also not in a position to say under what circumstance, the complainant issued Exhibit D1 notice to the accused and as to whether any legal proceedings was initiated against the accused by the complainant on the basis of Exhibit D1 notice. It is pertinent to note that the specific case of the accused is that he has paid the entire instalments to the complainant as per Exhibit P7, hire purchase agreement and that no amount is due from him to the complainant in that connection. There are no reason to disagree with the finding in the impugned judgment that the accused has succeeded in rebutting the statutory presumptions in favour of the complainant and therefore, this appeal, which is devoid of merit, is liable to be dismissed. Appeal dismissed.

Summary

Issues involved: Appeal against acquittal u/s 138 of NI Act based on failure to prove legally recoverable debt.

Summary:
The appellant, a complainant firm, advanced a loan to the accused under a hire purchase agreement. The accused issued a cheque towards part payment, which was dishonored. The trial court found the accused guilty u/s 138 of NI Act. However, the appellate court acquitted the accused based on the failure of the complainant to prove the existence of a legally recoverable debt. The appellant argued that the issuance of the cheque and signature were not disputed, but the respondent contended that the complainant failed to provide satisfactory evidence of the transaction.

The complaint alleged a loan advanced to the accused, but the hire purchase agreement did not clearly reflect this. The notice issued by the complainant also lacked clarity on the transaction details. The power of attorney holder's inability to depose on crucial matters further weakened the case. The complainant's failure to produce statement of accounts and the accused's defense successfully rebutted the statutory presumptions.

The judgment referred to legal precedents emphasizing the need for the accused to raise a probable defense to rebut the presumption under the NI Act. The standard of proof required for rebutting the presumption was highlighted, stating that the accused need not prove innocence beyond reasonable doubt. The court, after re-evaluating the evidence, upheld the acquittal of the accused, concluding that the appeal lacked merit.

In conclusion, the appeal against the acquittal u/s 138 of the NI Act was dismissed as the accused successfully rebutted the statutory presumptions, and the evidence presented by the complainant was deemed insufficient to prove the legally recoverable debt.