2021 (10) TMI 34 - HC - Indian Laws

Dishonor of Cheque - presumption under Section 139 of the Negotiable Instruments Act - Complainant is witness of truth and reliability or not - preponderance of probability - cross-examination of witnesses - burden to prove - HELD THAT - Taking into the close dates between the parties and the date of the sale agreement with that of the date of the cheque, the lower appellate Court has rightly come to the conclusion that within a week, two sale agreements have been executed by wife of the accused and brother-in-law of the accused and marking of the documents D1 and D3, the accused has successfully demonstrated that various sale agreements, as a security, for this loan transaction was originally entered between the parties and the said amount of ₹ 3 lakhs, was duly repaid by two cheques dated 28.12.2011 and the same was duly honoured and further payment of ₹ 41,300/- was also duly honoured by payment of cheque and thus, the suggestive case of the defence has been successfully demonstrated by more than preponderance of probability from the answer elicited in the cross examination of P.W. 1 and D.W. 1 and D3 and D2 sale agreements and it is found that the complainant has not come to the Court with clean hands. The accused has successfully demonstrated the suggestive case. The cheque is a blank signed cheque for two sale agreements and there is another case filed by brother-in-law of the complainant in Puducherry area and in respect of the amount received, there are also duly repaid the amount by cheque, the same was duly encashed, as per admission of P.W. 1 in the cross examination and hence, the accused has successfully discharged the burden of proof by preponderance of probability by establishing that such a huge amount has not been given as a loan by the complainant and in view of such finding, it is again for the complainant to prove that he had source of income to lend such a huge amount of ₹ 20,00,000/- - Admittedly, he had not filed any document to show that he had possessed such huge amount of ₹ 20 lakhs. In the cross examination, he had categorically admitted that he had initially paid ₹ 1 lakh and subsequently, he has developed the corpus to lend ₹ 20 lakhs and he admitted that he had not disclosed the same in the income tax returns and for which, he has also paid income tax for the said amount. This Court finds that non mentioning of date on which and for how many months after giving the loan, he had received Ex. P1 cheque from the accused, assumes vital importance - after rebuttal of evidence, the pendulum of burden of proof, having oscillated towards the complainant, the complainant is duty bound to prove that there was a source of income to pay such amount he having failed, has to fail. The finding rendered by lower appellate Court is not perverse and the same do not suffer from any irregularity or illegality warranting interference in this appeal - Appeal dismissed.

Summary

Issues:
Appeal against acquittal under Section 138 of Negotiable Instruments Act.

Analysis:
1. The appellant filed a criminal appeal against the judgment of the lower court acquitting the respondent/accused from the offence under Section 138 of the Negotiable Instruments Act. The appellant contended that the respondent-accused admitted issuing the cheque, entitling the appellant to the presumption under Section 139 of the Act, which the respondent failed to rebut. The absence of representation on behalf of the respondent was noted, and the appeal was against the acquittal order passed by the lower court.

2. The complainant alleged that the accused borrowed ?20,00,000 and issued a cheque that was dishonored due to insufficient funds. Legal notices were sent but remained unclaimed. The defense claimed a sale agreement between parties, stating the loan was repaid through a different transaction. The defense presented evidence to support this claim, including sale agreements and repayment details, challenging the credibility of the complainant's case.

3. The court referred to Supreme Court judgments regarding the presumption under Section 139 of the Act and the burden of proof on the accused. The appellant's failure to provide specific details regarding the loan transaction and discrepancies in the complainant's statements raised doubts about the credibility of the appellant's case. The court emphasized the importance of clear evidence and documentation in such cases.

4. The court analyzed the evidence presented by both parties, including cross-examinations and documentary proof. It noted inconsistencies in the complainant's statements regarding the loan amount and repayment details. The defense successfully demonstrated through evidence that the loan was repaid through other means, undermining the credibility of the complainant's case.

5. The court concluded that the appellant failed to prove the source of income for the loan amount, as discrepancies and lack of documentation cast doubt on the credibility of the appellant's claims. The lower court's decision to dismiss the appeal was upheld, as the appellant did not provide sufficient evidence to establish the case against the accused. The judgment was detailed and thorough in analyzing the evidence and legal principles involved in the case.