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of <h1>Cheque dishonour prosecution and scope of appellate interference in acquittal appeals; acquittal affirmed for lack of privity and evidence</h1> Scope of appellate interference in appeals against acquittal examined with emphasis on presumption of innocence and appellate reappreciation of evidence; ... Order of acquittal - Scope of appellate interference in appeals against acquittal - Presumption of innocence - Appellate review and reappreciation of evidence - Misreading or omission to consider material evidence - Prosecution of partners/directors without specific averment - Section 138 of the Negotiable Instruments Act, 1881 - Section 386(b)(i) of the Code of Criminal Procedure, 1973 - HELD THAT:- The Complainant has examined himself and has deposed regarding the hand loan taken by Mr. Pagaria. According to him, the Accused came forward to undertake the responsibility of payment of the hand loan. He has repeated that the Accused requested him to not deposit the cheque till 5th February 2006. However, in his cross-examination, he has admitted that he is unable to specifically state which of the Accused was in charge of the affairs of the Firm at the relevant time. There is neither any document nor any record of such acceptance of liability. Save and except the bare statement of the Complainant in his chief-examination in that regard, the Complainant is unable to prove the same. In fact, his answers in the cross-examination demolish his case. There is no explanation regarding the rate of interest to justify the increase in the amount, and no attempt is even made by the Complainant to give any explanation in that regard. For this reason also, the assertion of the Complainant that the cheque was issued by the Accused against repayment of the hand loan taken by Mr. Pagaria is far-fetched. There is no infirmity in the findings of the Sessions Court that there was no privity of contract between the Complainant and the Accused. It is evident that none of the Accused has any legal debt or other liability towards the Original Complainant nor is there any evidence to indicate as to which of the partners was responsible for the day-to-day conduct of the business involving taking over of the liablity of Mr. Pagaria. Thus, the impugned Judgment and Order of acquittal does not suffer from any patent perversity and is not based on any misreading/omission of the Sessions Court in considering the material evidence on record. Appeal is thus, dismissed. Issues: (i) Whether, in the absence of evidence that a cheque was issued in discharge of a third-party liability, the offence under Section 138 of the Negotiable Instruments Act, 1881 is made out; (ii) Whether partners/directors can be prosecuted and convicted in the absence of specific averments and evidence as to their role in the firms affairs and participation in the alleged offence.Issue (i): Whether, in the absence of evidence that a cheque was issued in discharge of a third-party liability, the offence under Section 138 of the Negotiable Instruments Act, 1881 is made out.Analysis: The appellate reappreciation found no documentary evidence or reliable testimony proving that any of the accused accepted or undertook the third-party liability of the drawer. The complainants chief statement on acceptance of liability was undermined by cross-examination and there was no explanation for the increase from the alleged loan amount to the cheque amount. The findings of the Sessions Court that there was no privity of contract between the complainant and the accused were upheld after review of the evidence.Conclusion: The offence under Section 138 NI Act is not established against the accused for lack of evidence that the cheque was issued in discharge of a third-party liability; conclusion favours the Respondent.Issue (ii): Whether partners/directors can be prosecuted and convicted in the absence of specific averments and evidence as to their role in the firms affairs and participation in the alleged offence.Analysis: The complaint contained only a bald averment about responsibility for day-to-day affairs; there was no specific pleading or evidence identifying the role or conduct of individual partners. Reliance was placed on authorities requiring clear and unambiguous allegations and proof of specific involvement of partners/directors before prosecution and conviction can be sustained.Conclusion: Prosecution and conviction of partners/directors cannot be sustained in the absence of specific averments and evidence of their role; conclusion favours the Respondent.Final Conclusion: On reappreciation of the evidence, the impugned acquittal does not suffer from patent perversity or misreading/omission of material evidence and there exist reasonable alternative views; therefore the appeal is dismissed and the acquittal is maintained.Ratio Decidendi: An appellate court may reappreciate evidence in an appeal against acquittal but should not overturn an acquittal unless the trial courts view is patently perverse, based on misreading or omission of material evidence, or where no two reasonable views are possible; prosecutions of partners/directors require specific averments and evidence of their individual role in the firms affairs.
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