2020 (1) TMI 747 - HC - Indian Laws

Leave to appeal - Dishonor of Cheque - friendly loan - existence of legally enforceable debt or not - offence u/s 138 of NI Act - the case of complainant/petitioner is that she had advanced loan of ₹ 3,15,000/- to accused/respondent no.2 but the same has not been supported by any document to prove that the loan was actually advanced - HELD THAT - It is not in dispute that loan was given in the year 2012. The petitioner has also stated in her complaint Ex.CW1/6 in para 5 that the accused had issued two other cheques out of which cheque for ₹ 5,000/- was honoured on 08.08.2012 and another of ₹ 15,000/- was dishonoured on 28.12.2012 . She has also stated in her cross-examination as CW-1 that I had received total three cheques from the accused. The first cheque was cleared on 08.08.2012 and second cheque was dishonored vide memo dt. 28.12.2012 and the third cheque was dishonored vide memo dt. 21.01.2014 The Ld. Trial Court observed that petitioner has also failed to give particular dates on which the cheques were issued by respondent no.2 in favour of the petitioner. Further, petitioner has not given any satisfactory reason as to why she did not send any written communication demanding the balance payment from respondent no.2. This fact becomes all the more important in the light of the testimony of respondent no.2 as DW-1 and legal notice Ex.DWl/C sent to the petitioner in October 2013 demanding his security cheques from the petitioner - the learned Trial Court opined that the case of the petitioner that there exists legally enforceable debt of ₹ 3,15,000/- against respondent no.2, is rendered doubtful. It is a settled principle of law that the presumptions U/s 118 (a) and 139 of N.I. Act, 1881 are rebuttable in nature and standard of proof required by accused such rebuttal is preponderance of probabilities and the standard of proof on behalf of prosecution is proof of guilt beyond all reasonable doubts. The petitioner/complainant has miserably failed to prove her case beyond reasonable doubt - petition dismissed.

Summary

Issues:
Petition seeking special leave to appeal against an order under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
1. Loan Transaction and Cheque Dishonor:
The petitioner advanced a loan to respondent no.2, who issued a cheque that was dishonored due to insufficient funds. The petitioner initiated legal proceedings under Section 138 NI Act, but respondent no.2 was acquitted by the Ld. MM, leading to the appeal.

2. Petitioner's Contentions:
The petitioner argued that the acquittal was unjust, as respondent no.2 admitted to taking the loan and issuing the cheque. The defense of security was refuted due to lack of repayment evidence, challenging the reliance on respondent's documents without proper proof.

3. Evidence and Contradictions:
The Trial Court noted discrepancies in the petitioner's claims regarding loan disbursement and cheques received. The legal notice sent by respondent no.2 was deemed delivered based on presumptions under the General Clauses Act and Indian Evidence Act.

4. Burden of Proof and Presumptions:
The court discussed the rebuttable nature of presumptions under Sections 118(a) and 139 of the NI Act, emphasizing the standard of proof required for prosecution and accused. Various legal precedents were cited to explain the burden of proof and preponderance of probabilities.

5. Failure to Prove Case:
Despite the legal framework favoring the petitioner, the court found that she failed to establish her case beyond reasonable doubt. The lack of concrete evidence and inconsistencies in her claims led to the dismissal of the appeal.

6. Conclusion:
Based on the detailed analysis of the loan transaction, evidentiary issues, contradictions in testimonies, and legal principles governing burden of proof and presumptions, the High Court dismissed the petition for special leave to appeal. The judgment highlighted the importance of meeting the standard of proof in legal proceedings under the NI Act.