High Court acquits accused in NI Act case due to contradictions in complainant's statements, lack of evidence, and rebuttal of presumption.

The High Court allowed the criminal revision petition, setting aside the conviction and sentence under Section 138 of the Negotiable Instruments Act. The accused was acquitted due to significant contradictions in the complainant's statements, lack of evidence regarding the complainant's financial capacity, and the rebuttal of the presumption under Section 139 of the Act. The court emphasized the accused's ability to create doubt through a preponderance of probabilities. The lower courts' failure to consider these aspects rendered their judgments perverse and infirm.

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Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.
2. Financial capacity of the complainant to lend money.
3. Variations in the complainant's statements regarding the date and mode of loan payment.
4. Presumption under Section 139 of the N.I. Act and its rebuttal.

Issue-wise Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881:
The trial court convicted the accused for the offence punishable under Section 138 of the N.I. Act, which was upheld by the Sessions Judge's Court. The complainant alleged that the accused borrowed Rs. 1,25,000/- and issued a post-dated cheque, which was dishonored due to "funds insufficient." The complainant issued a legal notice, but the accused neither paid the amount nor replied, leading to the criminal case. The High Court acknowledged that the cheque's issuance and dishonor create a presumption of a legally enforceable debt under Section 139 of the N.I. Act, citing precedents from the Hon'ble Apex Court.

2. Financial capacity of the complainant to lend money:
The accused contested the complainant's financial capacity to lend the sum for the first time during the revision petition. The High Court noted that this argument was not raised in the trial or sessions courts and relied on the complainant's undisputed testimony about his financial status as an agriculturist and coffee planter. The court found no evidence to suggest the complainant lacked the financial capacity to lend Rs. 1,25,000/-.

3. Variations in the complainant's statements regarding the date and mode of loan payment:
The High Court observed significant contradictions in the complainant's statements. The complainant initially stated the loan was given in July 2012 but later mentioned August 2012 during cross-examination. Additionally, the complainant's statements varied regarding the mode of loan payment—initially stating it was in cash, then suggesting it was through a cheque. These inconsistencies were deemed material, affecting the credibility of the complainant's case, especially in the absence of corroborative evidence.

4. Presumption under Section 139 of the N.I. Act and its rebuttal:
The court emphasized that the presumption of a legally enforceable debt under Section 139 is rebuttable. The accused does not need to provide direct evidence but can create a preponderance of probabilities to rebut the presumption. The accused's defense that the cheque was given to a third party, who then handed it to the complainant, along with the material contradictions in the complainant's testimony, were sufficient to cast doubt on the complainant's case. The High Court found that both the trial and sessions courts failed to consider these aspects, rendering their judgments perverse and infirm.

Conclusion:
The High Court allowed the criminal revision petition, setting aside the conviction and sentence passed by the trial court and confirmed by the sessions court. The accused was acquitted of the offence under Section 138 of the N.I. Act. The registry was directed to transmit a copy of the order to both lower courts along with their respective records.

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