2021 (7) TMI 432 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - rebuttal of presumption - legally enforceable debt or not - offence punishable under Section 138 of N.I. Act took place or not - HELD THAT - No doubt, the legal requirement of issuance of notice etc. have been complied. Further, the accused has not disputed the fact that the cheque belongs to him and bears his signature. As such, the presumption under Section 139 of the N.I. Act required to be drawn. However, it is not a conclusive presumption, but a rebuttable presumption. As per Section 139 of the N.I. Act, the complainant being the holder of the cheque and signature on the cheque having not been denied by the accused, the presumption shall be drawn that, the cheque was issued for discharge of any debt or other legal liability. However, the accused can rebut the said presumption regarding non-existence of liability, but at the same time, the complainant (prosecution) is required to prove his case beyond all reasonable doubt - the accused for rebutting presumption, need not to lead his own evidence and he can also rebut the presumption on the basis of the evidence placed by the complainant himself. The complainant has failed to establish his financial capacity to advance loan. Hence, it cannot be presumed that the cheque was issued in discharge of legally enforceable debt or liability. As such, the presumption under Section 139 of the N.I. Act stands rebutted and the accused by cross-examining the complainant, has rebutted the said presumption. As such, the appellant/complainant has failed to substantiate the contention that the cheque was issued towards legally enforceable debt, which is a mandatory requirement for attracting the offence under Section 138 of the N.I. Act. The learned Magistrate is justified in answering point under consideration in the negative - Appeal dismissed.

Issues Involved:
1. Whether the accused committed an offence under Section 138 of the Negotiable Instruments Act, 1881.
2. Whether the complainant proved the accused’s guilt beyond a reasonable doubt.
3. Whether the complainant had the financial capacity to advance the loan amount.
4. Whether the presumption under Section 139 of the N.I. Act was rebutted by the accused.
5. Whether the trial court’s judgment of acquittal calls for interference.

Detailed Analysis:

1. Offence under Section 138 of the N.I. Act:
The appellant/complainant alleged that the respondent/accused committed an offence under Section 138 read with Section 141 of the Negotiable Instruments Act, 1881. The accused issued a post-dated cheque for ?12,15,000/- which was dishonored due to insufficient funds. Despite a legal notice demanding payment, the accused failed to comply, leading to the complaint.

2. Guilt Beyond Reasonable Doubt:
The trial court recorded the sworn statement of the complainant and considered the evidence presented, including documents marked as Ex. P1 to Ex. P5. The accused denied the allegations and provided his defense. The trial court framed the points for consideration, primarily focusing on whether the complainant proved the accused’s guilt beyond a reasonable doubt. The court concluded that the complainant failed to establish the accused’s guilt, resulting in the accused’s acquittal.

3. Complainant’s Financial Capacity:
A significant point of contention was the complainant’s financial capacity to advance the loan amount of ?12,15,000/-. The complainant claimed he had the financial means, supported by his role as a guarantor in Ex. D1. However, the trial court found inconsistencies in the complainant’s statements regarding his income and the source of the loan amount. The complainant did not provide sufficient evidence to prove he owned and sold land or received funds from his sister, undermining his claim of financial capacity.

4. Rebuttal of Presumption under Section 139 of the N.I. Act:
The court acknowledged the presumption under Section 139 of the N.I. Act, which assumes the cheque was issued for a legally enforceable debt. However, this presumption is rebuttable. The accused successfully rebutted the presumption by highlighting the complainant’s lack of financial capacity and inconsistencies in his statements. The accused did not need to provide evidence to the same standard as the prosecution but only needed to establish a probable defense, which he did effectively.

5. Interference with Trial Court’s Judgment:
The appellate court considered whether the trial court’s judgment of acquittal required interference. The complainant’s failure to prove his financial capacity and the accused’s successful rebuttal of the presumption under Section 139 led the appellate court to uphold the trial court’s decision. The appellate court found no grounds to interfere with the trial court’s judgment, confirming the acquittal of the accused.

Conclusion:
The appeal was dismissed, and the judgment of acquittal dated 19.11.2015 passed in C.C. No. 427/2011 by the Court of the Civil Judge, Yadgiri, was confirmed. The trial court records were ordered to be sent back immediately with a certified copy of the judgment.

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