2018 (8) TMI 1234 - HC - Indian Laws

Dishonor of cheque for want of funds - Offences u/s 138 of The Negotiable Instruments Act - It is the specific case of the private complainant namely Sree Guruvayurappan Investments that the respondent herein has borrowed a sum of ₹ 2,85,000/- on 24.04.2004 and agreed to repay the said amount with interest at 36% p.a., and executed a promissory note - Held that - The Trial Court has come to the right conclusion that the respondent has successfully rebutted the presumption and same is hereby confirmed. The standard of proof that is required to discharge the onus of proofs, on the accused is not as that of the prosecution and the standard of evidence that is to be adduced by the defendant to rebut the presumption under Section 139 of the Negotiable Instruments Act is that of the preponderance of the probability either through direct or circumstantial evidence. For the said purpose, the learned counsel for the respondent/accused also relied upon the evidence adduced by the complainant. The Trial Court has rightly come to the conclusion that the respondent has not issued the cheque in question for any legally enforceable debt. Accordingly, the trial Court has acquitted the accused. The said order does not require any interference and the same is hereby confirmed - Criminal appeal dismissed.

Summary

Issues:
Acquittal under Section 138 of The Negotiable Instruments Act and dismissal of claim for compensation under Section 357(3) of Cr.P.C.

Analysis:

1. Acquittal under Section 138 of The Negotiable Instruments Act:
The appellant filed a Criminal Appeal against the order of acquittal by the Trial Court. The private complainant alleged that the respondent borrowed a sum of ?2,85,000 in cash and issued a cheque for ?3,00,000 which was dishonored. The Trial Magistrate initially presumed in favor of the complainant but later concluded that the respondent had rebutted this presumption by presenting evidence. The Trial Court considered the respondent's defense that the cheques were misused by another entity and that certain cheques were stolen. The Trial Magistrate found that the complainant failed to produce statutory account books and drew adverse inferences. The appellant contended that the Trial Judge erred in not accepting the case based on the respondent's admission of signatures. However, the Trial Court relied on a Non-traceable certificate to dismiss the complaint.

2. Dismissal of claim for compensation under Section 357(3) of Cr.P.C.:
The Trial Court examined the evidence and documents presented, noting that the complainant did not maintain proper accounts for the alleged loan amount. The respondent's defense included evidence from a chit fund group membership and the misuse of cheques. The Trial Court considered police complaints regarding missing cheques and the filing of a separate case by a relative of the complainant. The Trial Court found that the respondent had successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act by presenting clear and cogent evidence. The Court emphasized the standard of evidence required for the accused to rebut the presumption, which is the preponderance of probability. The Trial Court acquitted the accused based on the evidence presented, concluding that the respondent did not issue the cheque for any legally enforceable debt. The Criminal Appeal was dismissed, confirming the Trial Court's order.

In conclusion, the judgment highlighted the importance of evidence presentation and the standard of proof required to rebut legal presumptions in cases involving negotiable instruments. The Trial Court's decision to acquit the accused and dismiss the claim for compensation was upheld based on the evidence and legal principles applied during the proceedings.