Case Note & Summary
The case involves an appeal by the complainant, Shankar Jaganath Mane, against the acquittal of the accused, Sikkandar Mohammed Bidiwala, for an offence under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that he gave a loan of Rs.90,000/- to the accused, who executed a promissory note on 30th September 1995 and later issued a cheque dated 19th April 1997, which was dishonoured. The accused denied liability, claiming that the cheque was given as security for a business transaction involving a Mahanagar Gas agency. The trial court acquitted the accused, and the complainant appealed. The High Court examined the evidence, noting that the complainant failed to prove the source of the loan or produce the promissory note. The defence led evidence through the accused's son (DW-2) and another witness (DW-1), showing that the cheque was given as security for a business venture. The court held that the presumption under Section 139 of the Act was rebutted by the defence, and the complainant did not discharge the burden of proving a legally enforceable debt. The appeal was dismissed, and the acquittal was upheld.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant alleged a loan of Rs.90,000/- but failed to prove the source of funds or that the cheque was issued for a legally enforceable debt. The defence successfully rebutted the presumption under Section 139 by showing the cheque was given as security for a business transaction. Held that the acquittal was proper as the complainant did not discharge the burden of proving the existence of a debt or liability (Paras 3-10). B) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal - The accused can rebut the presumption by raising a probable defence. In this case, the defence evidence of DW-2 (son of accused) and DW-1 showed that the cheque was given as security for a business venture, not for a loan. The trial court's finding that the presumption was rebutted was upheld (Paras 5-10). C) Evidence Act - Burden of Proof - Section 101 - The complainant must prove the existence of a legally enforceable debt. The complainant's failure to produce the promissory note or explain the source of funds weakened his case. The appellate court held that the trial court's acquittal was not perverse (Paras 3-10).
Issue of Consideration
Whether the acquittal of the accused for offence under Section 138 of the Negotiable Instruments Act, 1881 was proper when the complainant alleged a loan of Rs.90,000/- but the defence claimed the cheque was given as security for a business transaction.
Final Decision
The High Court dismissed the appeal and upheld the acquittal of the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act is rebuttable
- burden shifts to accused to prove probable defence
- complainant must prove legally enforceable debt or liability
- blank cheque given as security does not create liability
