2018 (9) TMI 506 - HC - Indian Laws

Dishonor of Cheque due to insufficiency of funds - Section 138 of the Negotiable Instruments Act, 1881 - Whether loan transaction existed or not? - the Court below acquitted the respondent / accused from the charges on the ground that the appellant / complainant has not proved the existing liability of the respondent. Further held that the complainant is not having any source for giving ₹ 2 lakhs as a loan to the respondent. Held that - The Court below acquitted the respondent / accused from the charges on the ground that the appellant / complainant has not proved the existing liability of the respondent. Further held that the complainant is not having any source for giving ₹ 2 lakhs as a loan to the respondent. Moreover, the trial Court believing the documents exhibited on the side of the respondent held that the cheque pertaining to this case has not been issued by the respondent in order to discharge the loan alleged to be availed from the complainant. Now, challenging the above said order of acquittal, the present appeal has been filed. In an appeal against acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence is available to him and the fundamental principle of criminal justice delivery system is that every person, accused of committing an offence shall be presumed to be innocent, unless his guilt is proved by a competent Court of law. Secondly, if the accused has secured an order of acquittal, the presumption of his innocence is reaffirmed and strengthened by the trial Court. Even if two reasonable conclusions are possible on the basis of evidence on record, the appellate Court should not disturb the finding of the acquittal recorded by the trial Court. Appeal dismissed.

Issues Involved:
1. Legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act.
2. Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act.
3. Evidence supporting the loan transaction.
4. Doubts regarding the issuance of the cheque.
5. Credibility of the complainant.

Issue-wise Detailed Analysis:

1. Legally Enforceable Debt or Liability under Section 138 of the Negotiable Instruments Act:
The appellant claimed that the respondent issued a cheque to repay a loan of ?2 lakhs, which was dishonored due to insufficient funds. The trial court acquitted the respondent, concluding that the appellant failed to prove the existing liability of the respondent. The court found that the complainant did not provide sufficient evidence to establish the loan transaction, and the cheque was not issued to discharge a legally enforceable debt.

2. Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act:
The appellant argued that the respondent's admitted signature on the cheque triggered the presumptions under Sections 118(a) and 139, which include the existence of a legally enforceable debt. The appellant cited judgments from the Supreme Court, emphasizing that the presumption is rebuttable and the accused must provide a probable defense. However, the trial court found that the respondent successfully rebutted the presumption by presenting evidence and creating doubts about the cheque's issuance for discharging a debt.

3. Evidence Supporting the Loan Transaction:
The respondent contended that he had no prior relationship with the appellant and did not owe any debt. He claimed that the cheque was given to a former business partner, Manivannan, and not to the appellant. The trial court noted the lack of documentary evidence supporting the appellant's claim of a loan transaction. The court emphasized that the appellant did not produce any documents to show his financial capacity to lend ?2 lakhs, nor did he provide evidence of any business or personal relationship with the respondent.

4. Doubts Regarding the Issuance of the Cheque:
The respondent presented evidence, including the counterfoil of the cheque book and testimony from witnesses, indicating that the disputed cheque was issued to Manivannan in 1999, not to the appellant in 2002. The trial court found this evidence credible and concluded that the cheque was not issued to discharge a debt to the appellant. The court also noted inconsistencies in the appellant's claims and the lack of supporting documents.

5. Credibility of the Complainant:
The trial court questioned the credibility of the appellant, noting that he had filed multiple cases against various individuals and did not maintain any accounts or income tax records to substantiate his financial transactions. The court found that the appellant's failure to provide evidence of his financial capacity and the absence of any documentation supporting the loan transaction created significant doubts about his claims.

Conclusion:
The appellate court upheld the trial court's decision, emphasizing the double presumption of innocence in favor of the respondent. The court found no reason to interfere with the trial court's judgment, as the appellant failed to provide convincing evidence to support his claims. The appeal was dismissed, and the order of acquittal was confirmed.

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