The judgment establishes the importance of proving a loan transaction and the presumption under Section 139 of N.I.Act in cases of dishonoured cheques, emphasizing the need for the accused to rebut the presumption with strong evidence.

JUDGMENT

H.B.Prabhakara Sastry, J. - In the complaint filed by the present appellant under Section 200 of Code of Criminal Procedure, 1973, against the present respondent, for the offence punishable under Section 138 of Negotiable Instruments Act, 1881 (hereinafter for brevity referred to as 'N.I.Act'), the learned XVIII Addl.Chief Metropolitan Magistrate & XX Addl.Small Causes Judge, Bengaluru City, (hereinafter for brevity referred to as 'trial Court'), by the judgment dated 08.11.2010, passed in C.C.No.13898/2006, acquitted the respondent/accused of the said offence. Aggrieved by the same, the complainant/appellant has preferred the present appeal.

2. The summary of the case of the complainant in the trial Court is that the respondent/accused in order to discharge his legal liability towards the complainant, had issued two cheques bearing No.941701 and No.941702, dated 5.12.2005 and 20.12.2005 respectively, each for a sum of Rs. 1 lakh and drawn on State Bank of India, West of Chord Road Branch, Bengaluru, in favour of the complainant. When the cheques were presented for its realisation by the complainant, both the cheques were dishonoured with the Banker's endorsement "funds insufficient" on 24.1.2006. Thereafter, complainant got issued a legal notice to the accused through Registered Post Acknowledgement Due, as well under Certificate of Posting on 1.2.2006, demanding the payment of the cheque amount. The accused/respondent sent an untenable reply, but, did not pay the cheque amount, which made the complainant to institute a criminal case against him for the offence punishable under Section 138 of N.I.Act.

3. The respondent who was the accused in the trial Court appeared and contested the matter. In order to prove the guilt of the accused, the complainant got himself examined as PW-1 and got marked documents from Exs.P-1 to P-11. On behalf of the accused, accused was examined as DW-1 and other two witnesses as DW-2 and DW-3 and got marked documents at Ex.D-1 and D-1(a).

4. After hearing both side, the trial Court by its impugned judgment dated 08.11.2010, acquitted the accused of the offence punishable under Section 138 of N.I.Act.

5. The trial Court records were called for and the same are placed before this Court.

6. Heard the arguments of learned counsel from both side and perused the materials placed before this Court.

7. For the sake of convenience, the parties would be referred to as per their ranks before the trial Court.

8. Learned counsel for the appellant in his argument submitted that wives of the complainant and the accused are sisters, as such, believing his co-brother, the complainant had advanced him the loan amount. However, the trial Court without appreciating the materials placed before it in its proper perspective, has erroneously acquitted the accused with an observation that the details of the loan were not given by the complainant, as such, the presumption was stood rebutted. Learned counsel further submitted that when the issuance of the cheques is admitted, so also, its dishonour and service of legal notice upon the accused, the trial Court was required to convict the accused.

9. Per contra, learned counsel for the respondent in his argument submitted that the alleged loan is a bogus one, as such, at the earliest point of time in his reply to the notice sent by the complainant, the accused has made it clear about the non-existence of any loan. He also submitted that Ex.D-1 shows that the loan was between the wives of the parties herein and the same had stood cleared. He further stated that the evidence of DW-2 makes it very clear that no loan transaction was there between the complainant and the accused as alleged. Further, there was no contractual relationship between the complainant and the accused. No details are forthcoming as to when, where and how the loan was given to the accused. Considering these aspects, the trial Court has rightly acquitted the accused of the alleged offence.

10. After he