2021 (12) TMI 279 - HC - Indian Laws

Dishonor of Cheque - discharge of legal debt and liability - rebuttal of presumption - offence under Section 138 of NI Act - reversal of the order of acquittal of accused - HELD THAT - It is settled law that when an appeal against acquittal is being considered, the appellate Court shall not reverse the order of acquittal only because another view in the matter was possible on the basis of the material on record, when the view adopted by the Court below while acquitting the accused was a reasonable and possible view. Therefore, the test to be satisfied by the appellant while seeking reversal of the order of acquittal is a stringent test and the material on record will have to be appreciated in that context. In the present case, the Magistrate has acquitted the respondent no. 1 on the basis that the complaint filed by the appellant for dishonour of the three cheques pertained only to the alleged liability towards bus stand fees for the Panaji bus stand. The Magistrate found that the oral and documentary evidence placed on record by the appellant pertained not only to the Panaji bus stand but also to other bus stands where respondent no. 1 had been engaged for collection of bus stand fees and parking fees. On this basis, the Magistrate found that the extent of dues and/or liability was not clear and that amounts stated in the cheques were far more than the debt or liability as projected by the appellant, thereby justifying the acquittal of respondent no. 1. There can be no doubt that under Section 139 of the aforesaid Act, a presumption operates in favour of the appellant and against the respondent no. 1 (accused). But, the presumption arises when foundational facts are proved by the complainant i.e. appellant in the present case. The documentary material on record was used on behalf of the respondent no. 1 to confront the witnesses in cross examination, which brought on record material that effectively rebutted the presumption that could have operated in favour of the appellant under Section 139 of the aforesaid Act. The appellant while challenging an order of acquittal has to pass a stringent test to successfully demonstrate that the order of acquittal deserves to be reversed. Appeal dismissed - decided against appellant.

Summary

Issues Involved:
1. Whether the cheques in question were issued in discharge of a legally enforceable debt or liability.
2. Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881, was rebutted.
3. Whether the Magistrate's acquittal of the respondent was justified based on the evidence presented.

Detailed Analysis:

1. Legally Enforceable Debt or Liability:
The appellant, a government company, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, for the dishonour of three cheques issued by the respondent, claiming they were issued for discharging a legal debt or liability. The cheques were for amounts of ?1,70,000/- each and ?60,000/-. The appellant contended that the cheques were for bus stand fees pertaining to the Panaji bus stand. However, the Magistrate found that the appellant failed to demonstrate that the cheques were issued for a specific debt or liability. The evidence presented included letters and communications between the parties, but the amounts mentioned were inconsistent and did not clearly establish the debt or liability.

2. Presumption under Section 139:
The appellant argued that the Magistrate ignored the presumption under Section 139 of the Act, which operates in favor of the complainant once the issuance of cheques is admitted. The appellant claimed that the respondent did not rebut this presumption as no defense evidence was led. However, the court noted that the presumption can be rebutted on the preponderance of probabilities, not necessarily by leading defense evidence but also by discrediting the complainant’s witnesses through cross-examination. The cross-examination of the appellant's witnesses revealed inconsistencies and a lack of concrete evidence regarding the specific debt or liability, effectively rebutting the presumption.

3. Justification of Acquittal:
The Magistrate acquitted the respondent on the grounds that the appellant did not provide sufficient evidence to prove the cheques were issued for a specific debt or liability. The appellant's witnesses admitted under cross-examination that they were not fully aware of the financial transactions and did not produce documents to substantiate the claimed dues. The court emphasized that in an appeal against acquittal, the appellate court should not reverse the order unless the view adopted by the lower court was unreasonable. The Magistrate's view was deemed reasonable as the appellant failed to meet the stringent test required to overturn an acquittal.

Conclusion:
The court concluded that the appellant did not provide adequate material to support the claim that the cheques were issued for a legally enforceable debt or liability. The presumption under Section 139 was successfully rebutted by the respondent through cross-examination of the appellant's witnesses. The Magistrate’s decision to acquit the respondent was justified, and the appeal was dismissed.