TaxTMI 
TaxTMI 
2026 (6) TMI 579
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....laint Case No.358 of 2014 and Criminal Complaint Case No.359 of 2014, titled as Dheeraj Sharma vs. Prashant Sharma, whereby Respondent No.2 has been acquitted of the charge under Section 138 of the Negotiable Instruments Act. 2. As per the case of the Appellant, there existed financial dealings between the Appellant and Respondent No.2, pursuant to which Respondent No.2 had issued cheques in favour of the Appellant towards discharge of a legally enforceable liability and debt. It has been asserted that the cheques in question were duly signed and issued by Respondent No.2 and were presented by the Appellant before the concerned bank within the statutory period of validity. 3. It is the case of the Appellant that upon presentation, the....
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....ice within limitation and failure of payment despite demand. It is thus contended that once execution of the cheques was not denied, statutory presumptions under Sections 118 and 139 of the Negotiable Instruments Act automatically operated in favour of the complainant and the burden had shifted upon Respondent No.2 to rebut the same by leading cogent and probable defence evidence. 6. Learned senior counsel for the Appellant would submit that the learned Trial Court has acquitted Respondent No.2 in a wholly mechanical and perverse manner without properly appreciating the mandatory statutory presumptions embodied under the Negotiable Instruments Act. It is contended that the findings recorded by the learned Trial Court are contrary to the ....
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....rds while extending unwarranted benefit to Respondent No.2. Learned senior counsel would argue that the findings recorded by the court below are not only against the weight of evidence but also contrary to the statutory object of the Negotiable Instruments Act, which was enacted to enhance credibility and sanctity of commercial transactions. 10. Learned senior counsel for the Appellant would also submit that the learned Trial Court travelled beyond the permissible limits of inquiry under Section 138 proceedings and completely overlooked the legal presumptions operating in favour of the holder of the cheque. According to him, the acquittal recorded by the learned Trial Court is based upon misreading of evidence, erroneous application of l....
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....the same would not furnish a ground to overturn a judgment of acquittal. 14. This Court has heard learned counsel for the Parties and perused the records. 15. Before proceeding further, it would be apposite to note that the present appeal arises from a judgment of acquittal passed in proceedings under Section 138 of the Negotiable Instruments Act. Though an appellate court exercising jurisdiction against acquittal is expected to exercise restraint and caution, however, where the findings recorded by the learned Trial Court suffer from manifest illegality, misapplication of settled legal principles, non consideration of statutory presumptions or a wholly unreasonable appreciation of evidence, the appellate court would not only be justi....
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....ugh the entire burden continued to rest upon the complainant throughout the proceedings even after the statutory presumptions had become operational. Such an approach is contrary to the settled principles governing proceedings under Section 138 of the Negotiable Instruments Act. 19. This Court further finds that the learned Trial Court also failed to appreciate the legal effect of dishonour on account of "stop payment instructions". The Hon'ble Supreme Court in catena of judgments, for instance, in M/S Laxmi Dyechem V. State of Gujarat & Ors. 2013 AIR SCW 3468, has consistently held that dishonour of cheque on account of "stop payment" would also attract the penal consequences contemplated under Section 138 of the Negotiable Instruments ....
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.... passing the impugned judgment travelled beyond the permissible scope of adjudication and failed to appreciate the evidence in the backdrop of settled legal standards applicable to cheque dishonour proceedings. The conclusions recorded by the learned Trial Court do not appear to be founded upon a legally sustainable appreciation of the presumptions and burden of proof contemplated under the Negotiable Instruments Act. 23. At the same time, this Court is conscious of the principle that an order of acquittal strengthens the presumption of innocence in favour of an accused and interference in appeal against acquittal should not be made in a casual or mechanical manner. However, where the acquittal itself suffers from manifest perversity, no....