Accused successfully rebutted statutory presumption in dishonour of cheque case under Sections 118(a) and 139 NI Act

Gujarat HC dismissed appeal in dishonour of cheque case under NI Act. Court held that accused successfully rebutted statutory presumption under Sections 118(a) and 139 by showing preponderance of probabilities. Complainant failed to prove cheque was drawn towards legally enforceable debt and could not establish ownership of land or 30% share claimed. Sessions Judge correctly acquitted accused after meticulously considering evidence. HC found no manifest error of law requiring interference with trial court's decision.

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Issues Involved:
1. Whether the learned Sessions Judge was justified in reversing the conviction and recording the acquittal of the accused.
2. Whether the debt in question was legally enforceable.
3. Whether the presumption under Sections 118(a) and 139 of the Negotiable Instruments Act was properly rebutted by the accused.

Detailed Analysis:

Issue 1: Justification of Acquittal by the Sessions Judge
The appeal challenges the acquittal of the accused by the learned Additional Sessions Judge, who reversed the trial court's conviction. The appellate court has full power to review and re-appreciate the evidence upon which the order of acquittal is founded. However, it must bear in mind that the presumption of innocence is further strengthened by the trial court's acquittal. If two reasonable conclusions are possible, the appellate court should not disturb the finding of acquittal unless the approach of the lower court is vitiated by some manifest illegality.

Issue 2: Legally Enforceable Debt
The complainant alleged that the accused issued cheques as part of the sale consideration for a land transaction. The cheques were dishonored due to "Stop Payment" instructions. The complainant claimed the cheques were issued for discharge of legal liability. However, the accused argued that the land in question belonged to a trust and not the complainant, thus invalidating the agreement and making the debt unenforceable.

Key Points:
- The agreement (Exh. 29) was entered into for the sale of 30% share in the land.
- The accused made part payment and issued cheques for the remaining amount.
- There was no evidence on record to show the complainant's ownership or share in the land.
- The land belonged to a trust, and there was no proof of the complainant's right to sell it.
- The transaction appeared to be without consideration, as the accused gained nothing from it.

Issue 3: Presumption Under Sections 118(a) and 139 of the NI Act
The presumption under Section 139 of the NI Act is rebuttable, and the onus is on the accused to raise a probable defense. The standard of proof for rebutting the presumption is preponderance of probabilities. In this case, the accused successfully rebutted the presumption by showing that the debt was not legally enforceable due to the lack of consideration and ownership issues related to the land.

Key Points:
- The accused demonstrated that the land did not belong to the complainant.
- The complainant failed to prove the legally enforceable debt.
- The accused's defense was supported by the lack of evidence regarding the complainant's ownership of the land.
- The transaction was without consideration, as the accused did not receive any benefit.

Conclusion:
The learned Sessions Judge meticulously considered the evidence and concluded that the debt was not legally enforceable. The accused successfully rebutted the presumption under Sections 118(a) and 139 of the NI Act by showing preponderance of probability. The appellate court found no material illegality or perversity in the Sessions Judge's approach and upheld the acquittal. The appeal was dismissed, and the impugned judgment and order of acquittal were confirmed.

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