2023 (5) TMI 1342 - HC - Indian Laws

Cheque bounce case acquittal upheld as complainant failed to prove financial capacity under Section 138

The Karnataka HC dismissed an appeal against acquittal in a cheque bounce case under Section 138 of the Negotiable Instruments Act. The complainant ... Appeal against judgment of acquittal u/s 138 of N.I. Act - Complainant lent money to the accused, who issued a cheque that bounced - Complainant issued demand notice and the same is returned with an endorsement as ‘not claimed’ - complainant filed a complaint seeking legal action against the accused - HELD THAT:- In the absence of any tangible evidence on record with regard to source of income through agricultural land, it cannot be accepted that complainant get income from agricultural land and given the said money to his Junior uncle-Ramanna. Out of the said saved amount, he has given loan to accused. The material evidence that has been brought on record during the cross examination of PW.1 is sufficient to create reasonable suspicion about the financial capacity of complainant to lend the money. In the present case, accused herself examined as RW.1, for the reasons best know to her did not offer herself for cross examination. Therefore, examination in chief of RW.1 cannot be looked into. The Trial Court has rightly appreciated the material evidence placed on record and arrived at just and proper conclusion in holding that rebuttal evidence placed on record by accused during the cross examination of PW.1 would be sufficient to displace the initial presumption available in favour of complainant in terms of Sections 118 and 139 of N.I. Act. The finding recorded by the Trial Court are based on the material evidence brought on record in the cross examination of PW.1 and the same does not call for interference by this Court. The Appeal filed by the Appellant-complainant is hereby dismissed. Issues involved: Appeal against judgment of acquittal u/s 138 of N.I. Act.Factual Matrix:The complainant lent Rs.2,00,000 to the accused, who issued a cheque that bounced. The complainant filed a complaint seeking legal action against the accused.Appellant's Contention:The appellant argued that the Trial Court erred in not drawing presumption in favor of the complainant under Sections 118 and 139 of N.I. Act. The appellant sought to set aside the judgment of acquittal and convict the accused.Respondent's Defense:The accused contended that the complainant lacked the financial capacity to lend the amount, and the cheque was issued as security for a transaction with another individual, which was allegedly misused by the complainant.Court's Analysis:The Court found that the complainant had proven that the accused issued the cheque for a lawful discharge of debt. The Court noted that the accused failed to provide rebuttal evidence to displace the presumption in favor of the complainant.Legal Principles Applied:The Court referred to the Supreme Court decision emphasizing that the accused must raise a probable defense to rebut the presumption u/s 139. The Court highlighted that the accused can rely on materials submitted by the complainant to raise a defense.Cross Examination and Financial Capacity:The Court scrutinized the complainant's financial capacity, noting discrepancies in his income sources. The Court found the evidence sufficient to create reasonable suspicion about the complainant's financial capacity.Judgment:The Court dismissed the appeal and confirmed the judgment of acquittal by the Trial Court. The Court found that the Trial Court's decision was based on material evidence and did not warrant interference.Conclusion:The appeal against the judgment of acquittal u/s 138 of N.I. Act was dismissed, and the Trial Court's decision was upheld.