2025 (3) TMI 892 - HC - Indian Laws

Revision petition dismissed as complainant failed to prove legally enforceable debt for dishonoured cheque

Shankar Lal Aggarwal Versus Bhairon Ghosh, Delhi

Delhi HC dismissed revision petition in dishonour of cheque case. Court found complainant failed to prove legally enforceable debt for the cheque. ... Dishonour of Cheque - complainant was unable to prove that there existed any legally enforceable debt in respect of the impugned cheque - HELD THAT:- The entire events as deposed by the Respondent which is fully corroborated by the testimony of DW3-Smt. Gurmeet Kaur, establishes that the missing of the cheque got reported on 05.09.2007. The cheque has been admittedly presented for encashment thereafter, and has been dishonoured on 13.09.2007. It is difficult to believe that this entire event of missing of the cheque and repayment to Smt. Gurmeet Kaur could have been pre- planned by Respondent in connivance with DW3-Smt. Gurmeet Kaur, only to disprove the claim of the Revisionist of having given loan of Rs. 2 lakhs to the Respondent. It is also pertinent to note that Smt. Gurmeet Kaur was an employee with the Complainant, which does not rule out the possibility of he having found the blank signed cheque of Respondent. Therefore, the cheque which got misplaced from Smt. Gurmeet Kaur may have landed in the possession of the Complainant as they both were working in the same office, a defence which cannot be completely discarded. Conclusion - The learned ASJ has thus, rightly concluded that there is no evidence to establish the legally enforceable liability for which the impugned cheque could have been issued by the Respondent. The present Revision Petition is without merit and is hereby, dismissed. 1. ISSUES PRESENTED and CONSIDEREDThe core legal issues considered in this judgment include:Whether the cheque in question was issued by the Respondent in discharge of a legally enforceable debt under Section 138 of the Negotiable Instruments Act, 1881.Whether the defense presented by the Respondent regarding the issuance of a blank cheque to Smt. Gurmeet Kaur and its subsequent misuse was credible and sufficient to rebut the presumption of liability.Whether the Additional Sessions Judge (ASJ) erred in setting aside the conviction and sentence imposed by the Metropolitan Magistrate (M.M.) based on the evidence presented.2. ISSUE-WISE DETAILED ANALYSISRelevant legal framework and precedents:Section 138 of the Negotiable Instruments Act, 1881, deals with the dishonor of cheques for insufficiency of funds and presumes the existence of a legally enforceable debt or liability unless rebutted by the accused. The burden of proof initially lies on the complainant to establish the issuance of the cheque in discharge of a debt. However, once the cheque is admitted, the presumption under Section 139 of the NI Act shifts the burden to the accused to prove otherwise.Court's interpretation and reasoning:The Court examined whether the cheque was issued in discharge of a legally enforceable debt. It scrutinized the credibility of the Respondent's defense that the cheque was given as a blank instrument to Smt. Gurmeet Kaur for a different transaction and was misused by the Complainant.Key evidence and findings:The Complainant alleged that the Respondent issued the cheque for a loan of Rs. 2 lakhs, which was dishonored due to insufficient funds. However, the Complainant's testimony revealed inconsistencies, such as the lack of documentation for the loan and the improbability of lending a significant amount to someone barely known.The Respondent's defense was supported by testimony from Smt. Gurmeet Kaur, who corroborated the claim of a Rs. 30,000 loan and the issuance of a blank cheque. The document Ex.DW1/3 and the police intimation (DD No.30A) supported the Respondent's narrative of the cheque's misplacement.The ASJ found that the Complainant failed to establish a legally enforceable debt, noting the absence of evidence proving the loan's existence and the plausibility of the Respondent's defense.Application of law to facts:The Court applied the presumption under Section 139 of the NI Act, which the Respondent successfully rebutted by presenting a plausible defense supported by evidence. The inconsistencies in the Complainant's account and the credible testimony of the defense witnesses led the Court to conclude that the presumption of a legally enforceable debt was not sustained.Treatment of competing arguments:The Court considered the Complainant's argument that the defense of a loan from Gurmeet Kaur was introduced late and was contradictory. However, it found the Respondent's explanation and supporting evidence credible, noting the absence of any suggestion that the Complainant lacked the capacity to advance the loan. The Court also considered the contradictions in the testimony of DW3 but found them insufficient to undermine the overall defense.Conclusions:The Court concluded that the ASJ rightly acquitted the Respondent, as the Complainant failed to prove the existence of a legally enforceable debt. The defense was credible and sufficiently rebutted the presumption under Section 139 of the NI Act.3. SIGNIFICANT HOLDINGSPreserve verbatim quotes of crucial legal reasoning:'The learned ASJ has thus, rightly concluded that there is no evidence to establish the legally enforceable liability for which the impugned cheque could have been issued by the Respondent.'Core principles established:The presumption of a legally enforceable debt under Section 139 of the NI Act can be rebutted by the accused by presenting a plausible defense supported by credible evidence.The burden of proving the existence of a legally enforceable debt remains with the Complainant, especially when the defense presents a credible alternative explanation for the issuance of the cheque.Final determinations on each issue:The Court upheld the ASJ's decision to acquit the Respondent, finding no infirmity in the judgment.The Revision Petition challenging the acquittal was dismissed, confirming the absence of a legally enforceable debt and the validity of the Respondent's defense.