Petitioner acquitted under Section 138 NI Act due to evidence inconsistencies. Convictions set aside, deposited amounts to be returned.

The High Court acquitted the petitioner of the charge under Section 138 of the Negotiable Instruments Act, 1881. The court found that the petitioner successfully rebutted the presumption of an existing debt by highlighting inconsistencies in the evidence and lack of documentary support for the respondent's claim. The court set aside the convictions from the Trial Court and Appellate Court, ordering the return of any deposited amounts by the petitioner and allowing the respondent the opportunity to challenge the decision in a superior court.

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Issues Involved:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Rebuttal of presumption under Sections 118B and 139 of the Negotiable Instruments Act, 1881.
3. Financial capacity and solvency of the respondent.
4. Admissibility and relevance of the "money receipt cum agreement to sell" (Mark D1).

Issue-wise Detailed Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The petitioner was convicted for dishonoring two cheques totaling Rs. 17,20,000/- issued to the respondent. The cheques were returned unpaid, leading to a complaint under Section 138 of the Negotiable Instruments Act, 1881. The Trial Court sentenced the petitioner to 8 months of rigorous imprisonment and a compensation of Rs. 22,20,000/-. The Appellate Court upheld this conviction.

2. Rebuttal of presumption under Sections 118B and 139 of the Negotiable Instruments Act, 1881:
The Trial Court held that the petitioner failed to rebut the presumption under Sections 118B and 139, which assume that a negotiable instrument was made for consideration and that the holder of a cheque received it for the discharge of a debt. The petitioner argued that the cheques were issued to a broker, Anil Shandilya, for a property deal and not to the respondent directly. The Appellate Court also found that the petitioner did not successfully rebut the presumption.

3. Financial capacity and solvency of the respondent:
The petitioner questioned the respondent's financial capacity to lend Rs. 17,20,000/-, citing discrepancies in the respondent's Income Tax Returns (ITRs) and his stated income. The respondent claimed to have withdrawn Rs. 24 lakhs from his bank account to give the loan, but the petitioner argued that the same amount was redeposited shortly after withdrawal, casting doubt on the transaction. The Appellate Court dismissed these concerns, stating that the respondent had Rs. 24 lakhs in his account on the date of the incident.

4. Admissibility and relevance of the "money receipt cum agreement to sell" (Mark D1):
The petitioner presented a "money receipt cum agreement to sell" (Mark D1) to support his claim that the cheques were issued for a property deal brokered by Anil Shandilya. The Appellate Court did not accept this document as it was only a photocopy and not proved as per the Indian Evidence Act. The court held that the petitioner failed to rebut the presumption regarding the consideration under Section 139 of the Negotiable Instruments Act, 1881.

Judgment Analysis:
The High Court examined the following:
- The relationship between the petitioner and the respondent was not definitively proved.
- The respondent's financial capacity to lend Rs. 17,20,000/- was not conclusively established.
- The ITRs did not reflect transactions affirming the respondent's financial health.
- The withdrawal and redeposit of Rs. 24 lakhs from the respondent's account raised doubts.
- The "money receipt cum agreement to sell" indicated that the cheques were part of a property deal, not a loan repayment.

The High Court concluded that the petitioner successfully rebutted the presumption of an existing debt by highlighting these inconsistencies and the lack of documentary evidence supporting the respondent's claim of a loan. Consequently, the High Court set aside the conviction and acquitted the petitioner.

Conclusion:
The revision petition was allowed, and the judgments of the Trial Court and Appellate Court were set aside. The petitioner was acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881. The court ordered the return of any amount deposited by the petitioner under court orders, allowing time for the respondent to challenge the decision in a superior court.

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