2010 (9) TMI 1239 - HC - Indian Laws

Respondent convicted under Section 138 for bounced cheques, lack of evidence led to conviction.

V.S. Yadav Versus Reena

V.S. Yadav Versus Reena - TMI Issues:Appeal against acquittal under Section 138 of Negotiable Instrument Act based on failure to prove liability.Analysis:1. The appeal was filed against the acquittal of the respondent for an offense under Section 138 of the Negotiable Instrument Act on the grounds that the complainant failed to establish that the cheques were issued against a liability, i.e., refund of a loan. The appellant filed a complaint after the respondent's cheques got dishonored, and the respondent failed to pay despite a notice of demand.2. The appellant testified that the respondent issued three cheques as repayment for a loan of Rs. 2.25 lakh. The dishonored cheques were proven by the bank official. The respondent claimed the cheques were issued as security for a loan that was never advanced, raising doubts about liability. The learned Metropolitan Magistrate (MM) observed that the complainant failed to prove the debt or liability of the accused beyond reasonable doubt.3. The MM's reasoning was scrutinized, emphasizing that the complainant only needed to prove that the cheques were issued against a liability. The respondent's defense that the cheques were issued as security for a loan not given should have been substantiated with evidence. The accused's statement under Section 281 Cr. P.C. was not considered as evidence, and the burden of proof shifted to the respondent to explain the circumstances of issuing the cheques.4. The definition of a cheque under Section 6 of the N.I. Act was highlighted to emphasize that the issuance of a cheque implies a debt or liability. The complainant's testimony, supported by cross-examination, established the loan transaction. The MM erred in requiring proof beyond reasonable doubt in a technical offense like Section 138 of the N.I. Act.5. The accused's failure to provide evidence to support his defense that the cheques were security for a loan was noted. The accused's statement under Section 281 Cr. P.C. was insufficient to rebut the presumption under Section 139 of the N.I. Act. The absence of proof of the reply to the complainant's notice further weakened the respondent's case.6. The judgment cited a relevant case to emphasize that the accused's plea of not guilty and the claim of issuing cheques as security were insufficient to rebut the legal presumption. The Trial Court's failure to consider the lack of evidence from the accused led to the setting aside of the acquittal and the conviction of the respondent under Section 138 of the Negotiable Instrument Act.7. The Trial Court's disregard for the legal requirements and its reliance on insufficient defenses by the accused were key factors in overturning the acquittal. The respondent's failure to provide substantial evidence to counter the complainant's claims resulted in the conviction under Section 138 of the N.I. Act. The case was listed for sentencing on a later date.