2013 (1) TMI 21 - HC - Indian Laws

Court affirms acquittal in check bounce case, accused rebuts presumption by evidence, lacks proof of debt

The court affirmed the trial court's decision, dismissing the appeal and upholding the acquittal of the accused under Section 138 of the Negotiable ... Section 138 of the Negotiable Instruments Act - Presumption under Section 139 of the N.I. Act - Legally enforceable debt - The accused approached the complainant through his wife and obtained a hand loan of Rs.1,90,000/- for settlement of the debts - With a promise to repay the same within six months - In spite of several demands, the accused began dodging - Accused in the presence of said Dharma Reddy gave a cheque bearing No.384351 drawn on State Bank of Hyderabad The said cheque was deposited in the complainant's account but the same was returned on 02.11.1998 with an endorsement of insufficient funds and party reported to stop operations in the account - Complainant re-deposited the said cheque on 20.11.1998, again the said cheque was returned with the same endorsement - Complainant came to know that a lawyer's notice was appeared in Vaartha newspaper on 12.10.1998 with regard to transfer of said property in the name of her daughter - Section 251 of Cr.P.C Held that:- The presumption, which is available u/s 139 of the N.I. Act can be rebutted by producing necessary evidence or he can also rely upon the evidence produced by the complainant and the material available on record without examining himself. The burden can be discharged by the accused on the basis of preponderance of possibilities. Applicant further deposed that the accused has executed a bond on her own hand writing after receiving the said amount and in the cross- examination he has deposed that the said bond was returned by the complainant one week or ten days prior to the issuing Ex.P-1 cheque. No prudent man would return the bond executed by the borrower without obtaining the cheque in lieu of said bond and more particularly when there is a dispute with regard to the property The accused was working as a teacher as on that date and if really she has issued a cheque for Rs.1,90,000/- she would have written the blanks in the said cheque with her own hand writing. Thus, the complainant has scribed the same in his hand- writing supports the contention of the accused that she issued two blank cheques in favour of Ushodaya Finance Company. The above circumstances create a doubt with regard to lending of the money by PW.1 to the accused and the accused issued the cheque in favour of the complainant. Thus, the accused by relying upon the evidence produced by the complainant could able to rebut the presumption available u/s 139 of the N.I. Act by preponderance of possibilities. In favour of respondent Issues:Acquittal of accused in a case under Section 138 of the Negotiable Instruments Act.Analysis:The appeal challenged the acquittal of the accused in a case where the complainant, a retired Superintendent of Central Excise, filed a complaint under Section 138 of the Negotiable Instruments Act against the accused, who borrowed Rs. 1,90,000 from the complainant. The accused issued a cheque which was dishonored due to insufficient funds. The complainant alleged that the accused intended to defraud him by transferring her property to her daughter. The trial court acquitted the accused, finding the complainant failed to prove the debt was legally enforceable.The appellant argued that the accused did not dispute her signature on the cheque, invoking the presumption under Section 139 of the N.I. Act. The burden was on the accused to disprove the debt, which she failed to do. However, the respondent contended that the presumption is rebuttable and can be established through evidence without the accused's testimony.The trial court relied on previous decisions to place the burden on the accused to prove the cheque was issued for a legally enforceable debt. The court found the complainant's evidence insufficient to establish the debt, leading to the acquittal of the accused.The appellant cited various Supreme Court decisions emphasizing the presumption under Section 139 and the burden on the accused to rebut it. The court clarified that the accused must raise a probable defense to counter the presumption.In this case, the accused did not dispute her signature but claimed the cheque was for a finance company, not the complainant. Discrepancies in the complainant's evidence, including the timing of the loan and return of a bond, cast doubt on the lending transaction. The accused's letter to the bank requesting stop payment on the cheque further supported her defense. The court concluded the accused successfully rebutted the presumption under Section 139 by preponderance of possibilities.The judgment affirmed the trial court's decision, dismissing the appeal and upholding the acquittal of the accused under Section 138 of the Negotiable Instruments Act based on the evidence presented during the trial.