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of <h1>Appeal challenging conviction under Negotiable Instruments Act dismissed. Lack of clarity in evidence led to rejection.</h1> The High Court dismissed the appeal challenging the conviction and sentencing of the accused under section 138 of the Negotiable Instruments Act. The ... Dishonor of Cheque - insufficient funds - existence of legally enforceable debt or not - reply to demand notices not done - validity of signature on the cheques - rebuttal of presumption - section 138 of NI Act - HELD THAT:- If the entire case is analysed, it can be very well said that the Sessions Judge has come to a right conclusion to reverse the judgment of the learned Magistrate. It is no doubt true that the accused does not dispute the signature on the cheques. It is also a fact that accused did not reply to the demand notice issued by the complainant before filing the complaint. For these reasons, no inference can be drawn that the complainant was able to prove that the accused issued the cheques for discharging the hand loan. The burden is on the complainant to prove that he had lent money to the accused. Mere statement in the complaint that the accused had taken hand loan is not sufficient. The complaint has not disclosed the date of transaction. At least he could have mentioned the year in which he lent money to the accused. In the demand notice also, there is no reference to the date of transaction. It has come in evidence that the accused just signed the cheque and wrote the amount in figures. PW.1 has admitted that accused himself asked him to write the name and amount in figures. If this part of the evidence is examined in the light of the actual defence taken by the accused, it can be said that the cheques might have been issued at the time when the accused purchased the landed property from the father of the complainant - Accused has stated that the sale talks were held in the year 2003 and at that time he issued the cheques without writing the date, name of the drawee and the amount in words. PW.1 has clearly admitted in the cross-examination that the accused issued two blank cheques and asked him to write all the particulars. So if this answer of PW.1 is considered and examined in the background of Ex.D.1 and D.2, it is possible to draw an inference that probably in the year 2003 itself, i.e., in connection with sale transaction accused might have issued the cheques without writing the name of the drawee and the amount in figures. The accused is a bank employee. If really he issued the cheques in order to repay the hand loan, he himself would have filled up all the particulars in the cheque. So looked in this background certainly a doubt arises in the case of the complainant and there is probability in the defence. In order to attach presumption to the case of the complainant under section 139 of Negotiable Instruments Act, the complainant's case must prima face appear to be believable. There must be clear reference to the transaction giving rise to legally enforceable debt or other liability. If there are innate defects in the facts pleaded by the complainant, presumption cannot be automatically raised. The above being the inferences that can be drawn, the Sessions Judge is right in accepting the probability in the defence put forth by the accused and rejecting the complainant's case - Appeal dismissed. Issues:1. Conviction under section 138 of N.I. Act based on dishonored cheques.2. Appeal against conviction and sentencing.3. Dispute regarding purpose of issuing cheques - hand loan repayment or security for sale transaction.4. Evaluation of evidence and legal arguments presented by both parties.5. Burden of proof on the complainant in establishing the debt and issuance of cheques.Issue 1: Conviction under section 138 of N.I. Act based on dishonored chequesThe appeal was filed under section 378(4) of the Code of Criminal Procedure challenging the conviction and sentencing of the accused under section 138 of the Negotiable Instruments Act. The complainant initiated action for dishonor of two cheques dated 2.5.2007 and 2.6.2007 drawn on Vijaya Bank, Mulki. The Magistrate convicted the accused, imposing a fine and imprisonment in default. The accused was acquitted by the Sessions Court, leading to the current appeal.Issue 2: Appeal against conviction and sentencingThe appellant argued that the accused did not dispute the signature on the cheques and did not reply to the demand notice, implying the cheques were for a legally enforceable debt. The respondent contended that the cheques were issued as security for a sale transaction and not for a hand loan. The Sessions Judge reversed the Magistrate's judgment, emphasizing the lack of clarity in the complainant's evidence regarding the date of the alleged loan transaction.Issue 3: Dispute regarding purpose of issuing chequesThe accused presented three defenses: the cheques were issued as security for a sale transaction, the account closure was due to his transfer, and the complainant lacked financial capacity to lend. The Magistrate found the defenses improbable, while the Sessions Court accepted the possibility of the cheques being security for the sale transaction. The complainant's failure to specify the loan date weakened the case for a hand loan.Issue 4: Evaluation of evidence and legal argumentsThe Magistrate relied on evidence of dishonor and the complainant's assertion of a hand loan. The Sessions Judge emphasized the lack of clarity in the complainant's case and the accused's defenses. The appellant argued for attaching presumption based on the dishonored cheques, while the respondent highlighted inconsistencies in the complainant's claims and the accused's employment history.Issue 5: Burden of proof on the complainantThe complainant failed to establish the date of the alleged loan transaction clearly, weakening the claim of a hand loan. The accused's explanations regarding the sale transaction and account closure raised doubts on the purpose of issuing the cheques. The Sessions Judge's decision to reject the complainant's case and accept the accused's defense was upheld, emphasizing the need for a believable transaction to trigger the legal presumption under the Negotiable Instruments Act.In conclusion, the High Court dismissed the appeal, upholding the Sessions Judge's decision based on the evaluation of evidence and the lack of clarity in the complainant's case regarding the purpose of issuing the cheques. The burden of proof on the complainant to establish a legally enforceable debt was not met conclusively, leading to the rejection of the appeal.
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