2022 (2) TMI 886 - HC - Indian Laws

Appeal against acquittal under Negotiable Instruments Act dismissed. Complainant failed to prove debt discharge.

Sri Shivanna Versus Sri Nagaraja Gowda

The appeal against the judgment of acquittal under Section 138 of the Negotiable Instruments Act, 1881 was dismissed. The court upheld the trial court's ... Dishonor of Cheque - acquittal of the accused - discharge of a legally enforceable debt or not - main contention of appellant is that, when the signature on the cheques came to be admitted, the trial Court is not justified in acquitting the accused - HELD THAT:- In the entire complaint, the complainant has not at all specifically asserted about the specific date of advancement of the hand loan. It is important to note here that the loan is alleged to have been advanced in the 2nd week of January 2002, that too to the tune of ₹ 4.00 Lakhs. ₹ 4.00 Lakhs is a huge amount in 2002 and it is hard to accept the version of the complainant that he advanced such a huge amount without any security and without charging any interest. Further, he has not specifically stated the date of advancement of the alleged loan amount - according to the complaint, on the same date of advancement of loan amount, two post-dated cheques as per Exs. P1 & P2 were handed-over to complainant, which were for ₹ 2.00 Lakhs each. If at all on the same day, both cheques viz., Exs. P1 & P2 were handed-over, there is no explanation as to why the accused has issued two cheques rather than a single cheque, when the alleged loan transaction is for ₹ 4.00 Lakhs. At the out-set, the complainant has not produced any material to show that, he had the financial capacity and the cross-examination of PW. 1 clearly disclose that, his financial capacity is exposed by the accused. He has not produced any documents to show his income. Further, he claims that, he secured ₹ 3.00 Lakhs by sale of his Plot. But, no documents have been produced to substantiate this contention also - When the civil dispute between the accused and the complainant was pending, question of the complainant advancing loan does not arise at all. Apart from that, in the complaint itself no specific date of advancement of loan was given and it is evident that all along that there was a civil dispute between the parties. Further, the financial status of the complainant is also not established. Further, the accused has exposed the complainant in respect of his financial capacity. Though the complainant has claimed that he has accumulated the amount of ₹ 3.00 Lakhs by way of sale of site, but, no material is produced to substantiate this contention. On perusal of the entire records, it is evident that the complainant has not approached the Court with clean hands. He has not referred the date of payment of loan and no reasons are given for charging no interest to such a huge amount, that too during pendency of the civil litigation between the parties. Further, there is no explanation from the complainant as to why he has issued two cheques on the same day for ₹ 2.00 Lakhs each, instead of one cheque. In the decision reported in BASALINGAPPA VERSUS MUDIBASAPPA [2019 (4) TMI 660 - SUPREME COURT], the Hon'ble Apex Court has clearly held that the prosecution is bound to establish its case beyond all reasonable doubt, but, the accused is required to rebut the presumption only on the basis of preponderance of probabilities - Admittedly in the instant case, the complainant has failed to establish his financial status. In such circumstances, the principles enunciated in the above cited decision are squarely applicable to the facts and circumstances of the case in hand. The complainant has failed to prove that the alleged cheques were issued in respect of a legally enforceable debt and that he has advanced the hand loan of ₹ 4.00 Lakhs to the accused. The trial Court has appreciated the oral and documentary evidence in a proper perspective and arrived at a just decision. In such circumstances, the judgment of acquittal does not call for any interference by this Court. As such, the appeal is devoid of any merits and needs to be rejected - Appeal dismissed. Issues:Appeal against judgment of acquittal under Section 138 of the Negotiable Instruments Act, 1881.Analysis:The appellant-complainant appealed against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that he advanced a hand loan of Rs. 4.00 Lakhs to the accused, who issued two post-dated cheques for repayment. However, the trial court acquitted the accused, concluding that the complainant failed to prove the cheques were issued in discharge of a legally enforceable debt. The appellant contended that the trial court erred in its judgment by not considering the admitted signatures on the cheques and questioning the complainant's financial capacity. The appellant argued that despite discrepancies in the legal notice period, the complaint was validly filed. The appellant sought to convict the accused by challenging the trial court's decision.Upon review, it was noted that the complainant did not specify the date of the loan advancement or cheques issuance in the complaint. The court questioned the plausibility of advancing a substantial loan without security or interest. The complainant's financial capacity was also scrutinized, revealing inconsistencies in his claims and lack of evidence to support his income sources. Additionally, a civil suit history between the parties raised doubts about the loan transaction's credibility. The court highlighted discrepancies in the complainant's assertions and lack of clarity regarding the cheques' purpose, casting doubt on the complainant's intentions and financial standing.The court emphasized that the accused effectively rebutted the presumption under Section 139 of the N.I. Act by presenting evidence challenging the complainant's financial capacity. Referring to legal precedents, the court reiterated that the prosecution must prove its case beyond reasonable doubt, while the accused only needs to establish doubts on a balance of probabilities. In this case, the complainant's failure to substantiate his financial status shifted the burden of proof to him, which he could not meet. The court concluded that the trial court's decision was just, considering the evidence and circumstances, and upheld the acquittal of the accused under Section 138 of the N.I. Act.In the final order, the court dismissed the appeal, confirming the judgment of acquittal issued by the trial court. The appellant's arguments were deemed meritless, and the accused remained acquitted of the offense under Section 138 of the Negotiable Instruments Act, 1881.