2022 (6) TMI 295 - HC - Indian Laws

Dishonor of Cheque - acquittal of the accused - section 138 of N.I. Act - Whether the appellant/complainant has made out the ground to interfere with the impugned judgment of acquittal? - HELD THAT - The offence punishable under section 138 of N.I. Act can be completed only with the concatenation of a number of acts. The following are the acts which are components of the offence. (1) drawing of the cheque, (2) presentation of cheque to the bank, (3) returning the cheque unpaid by the drawee Bank, (4) giving notice in writing to the drawer of the cheque demanding payment of the dishonoured cheque amount, (5) failure of the drawer to make payment within 15 days of the receipt of the notice - Section 139 of the N.I. Act says, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. On perusal of Ex. P1-cheque, which indicates that there are two signatures found on it. The Respondent has denied the signature affixed in the amount corrected. No effort has been made to prove the signature of the Respondent. The Appellant admitted that the Respondent had a money transaction with his mother-in-law and his mother-in-law has died. A specific question was put to the Appellant during cross-examination that he had no financial capacity to lend such a huge amount; it was the Appellant who had to discharge the initial burden. In this case, PW. 1 has examined his co-brother-PW. 2 and tried to convince the Court about the financial capacity to give the loan to the Respondent, which created doubt. The Appellant has failed to establish the monetary transaction with the Respondent and was unable to discharge the initial burden to raise the presumption as envisaged under section 139 of N.I. Act. The trial Court is justified in acquitting the accused for the offence punishable under section 138 of N.I. Act - the Appellant has not made out grounds to interfere in the order of acquittal passed by the trial Court - The appeal filed by the appellant/complainant is dismissed.

Summary

Issues:
1. Acquittal of the accused under section 138 of N.I. Act
2. Grounds for interference with the impugned judgment of acquittal

Analysis:

Issue 1:
The appellant/complainant alleged that the respondent/accused borrowed Rs. 4 lakhs promising to repay within six months, issuing a cheque that later bounced due to insufficient funds. The appellant argued that the trial court erred in not raising the presumption under section 139 of the N.I. Act. The appellant contended that the respondent's denial of the transaction was insufficient to rebut the presumption, seeking to allow the appeal. However, the respondent claimed the cheque was issued as collateral security to the appellant's deceased mother-in-law, and he was not liable to repay the amount. The respondent denied any transaction with the appellant, attributing misuse of the cheque to the appellant after the mother-in-law's death.

Issue 2:
The court considered the evidence presented by both parties. The appellant testified that he borrowed money from his co-brother to lend to the respondent, while the respondent claimed to have received money from the appellant's mother-in-law. The financial capacity of the appellant to lend the amount raised doubts, as the evidence showed discrepancies in the timing of transactions. The court highlighted the components of the offence under section 138 of the N.I. Act and the presumption under section 139. The respondent's testimony regarding the cheque as collateral security and the lack of effort to prove the respondent's signature on the cheque influenced the court's decision.

In conclusion, the court affirmed the trial court's acquittal of the accused under section 138 of the N.I. Act, stating that the appellant failed to establish the monetary transaction and discharge the burden to raise the presumption. The court found no grounds to interfere with the order of acquittal. The appeal was dismissed, and the impugned judgment was confirmed, with appreciation for the amicus curiae's service and an honorarium directed to be paid.