2021 (10) TMI 1359 - HC - Indian Laws

Appellate Court Upholds Acquittal in Debt Dispute Case

Industrial Fuel consultants Versus Laxman Sharma

The appellate court upheld the judgment of acquittal in a case challenging a decision under section 138 of the Negotiable Instruments Act. The court ... Dishonor of Cheque - insufficient funds - existing and enforceable debt or not - rebuttal of statutory presumption under section 139 of NI Act - burden to prove - HELD THAT:- The burden on the accused is to make out a probable defence. The accused need not step into the witness box or adduce direct evidence. It would suffice if the accused is in a position to create a reasonable doubt that the version of the complainant is false. In the factual matrix, the accused has more than succeeded in rebutting the presumption. Except a bald statement in the complaint that the disputed cheque was issued towards payment of unpaid amount, there is no disclosure whatsoever as to when was the coal supplied, what was the quantity of the coal supplied, what was the amount received from the accused and what amount is unpaid. The complainant did not adduce any documentary evidence to show that he supplied coal to the accused, at any point in time. While the complainant asserted that the outstanding is reflected in the balance sheet, the balance sheet is not produced on record - in cases where the allegation is that certain goods were supplied and the cheque was issued towards payment of the consideration, it would be hazardous to convict only on the basis of the presumption under section 139 of the Act in the absence of any material, and which material ordinarily would be expected to be in the complainant's possession and control, to show that goods were as a fact supplied to the accused. While dealing with an appeal against acquittal, the Court must bear in mind that the presumption of innocence is only strengthened by the acquittal and if two reasonable conclusions are possible on the basis of the evidence on record, the Appellate Court should be slow to reverse a judgment of acquittal. Appeal dismissed. Issues:Challenge to judgment of acquittal under section 138 of Negotiable Instruments Act, 1881.Analysis:The appellant, the complainant in Criminal Complaint 1813/1999, challenged the judgment acquitting the respondent accused of the offence under section 138 of the Act. The complainant alleged that the accused issued a cheque that bounced due to insufficient funds, leading to the complaint. However, the complaint lacked crucial details such as when and where the coal was supplied, the quantity supplied, and payment details. The complainant's testimony and affidavit were also vague, failing to provide concrete evidence of the transaction.The Magistrate acquitted the accused, noting the complainant's failure to prove the sale and purchase of coal, the quantity supplied, and the debt owed. The defense's version, supported by cross-examination, was considered probable. The complainant's counsel argued that the statutory presumption under section 139 of the Act should apply since the accused did not deny the cheque's signature. However, the accused successfully rebutted this presumption by casting doubt on the complainant's version through cross-examination and legal precedents.The judge acknowledged the statutory presumption but emphasized its rebuttable nature. The burden lies on the accused to create a reasonable doubt in the complainant's version. In this case, the accused effectively rebutted the presumption by highlighting inconsistencies and lack of evidence in the complainant's case. The judge stressed the importance of concrete evidence in cases involving goods supply and payment by cheque, which was absent in this matter.The defense of cheque misuse by the accused was supported by admissions during cross-examination, further weakening the complainant's case. The judge highlighted that in appeals against acquittals, the presumption of innocence favors the accused, and if two reasonable conclusions are possible, the appellate court should be cautious in reversing the acquittal. Citing legal precedent, the judge found no grounds for interference in the judgment of acquittal and dismissed the appeal.