The court emphasized the importance of clean hands doctrine and the burden of proof in establishing a legally enforceable debt under the Negotiable Instruments Act.

JUDGMENT

1. This appeal is filed by the appellant-complainant under Section 378(4) of the Code of Criminal Procedure, challenging the judgment of acquittal dated 31.03.2016, passed by the JMFC, 2nd Court, Karwar, in C.C.No.419/2010 by acquitting the accused-respondent herein for the offence under Section 138 of Negotiable Instruments Act, 1881.

2. The brief factual matrix leading to the case are that, the complainant is the permanent resident of Karwar and he is doing real estate business. The respondent-accused is also a businessman doing share marketing of commodity and equity share business.

3. It is further asserted that both the accused and the complainant came in contact in respect of their business and the accused asked the complainant to join his business with an assurance to give Rs.15,000/- per month, in case he invests Rs.1,50,000/- in the business. Accordingly, the complainant invested Rs.1,50,000/- by paying the amount to accused through cheque. But as per the agreement, the accused did not pay the monthly profit of Rs.15,000/- as well as the investment amount. The complainant demanded for repayment of his amount. It is alleged that on 14.12.2019 the complainant has issued a cheque bearing No.94137 for Rs.1,50,000/- drawn on Axis Bank Ltd., Branch Shan Complex, Green Street, Karwar, towards discharge of legally enforceable debt in respect of the investment made by the complainant. The complainant is said to have presented the said cheque and it was bounced for insufficient funds and subsequently, in spite of issuance of legal notice, the amount was not repaid. Hence he submitted a complaint under section 200 of Cr.P.C.

4. The learned Magistrate after recording sworn statement of the complainant, taken cognizance and issued process against the accused. The accused has appeared and he was provided with all the copies of prosecution papers. He denied the accusation.

5. Then the complainant was examined as PW.1 and Branch Manager of the bank was examined as PW.2. The complainant has got marked Exs.P.1 to P.5. After completion of the evidence of the complainant, the statement of accused under section 313 of Cr.P.C. was recorded and the case of the accused is of total denial. The accused also got examined himself as DW.1 and got marked Ex.D.1 in the cross-examination of PW.2 and also placed reliance on Ex.D.2.

6. After hearing the arguments advanced by both the parties, the learned Magistrate has found that the complainant has failed to establish that the cheque was issued towards legally enforceable debt and hence acquitted the accused for the offence punishable under section 138 of the Negotiable Instruments Act, 1881. Being aggrieved, this appeal came to be filed by the appellant-complainant.

7. Heard the arguments and perused the records.

8. Having heard the arguments and perusing the records, it is evident that the complainant is asserting that he has invested Rs.1,20,000/- in the business run by the accused and accused has promised to pay Rs.15,000/- per month, but he did not pay the amount and when demanded repayment of the invested amount, the disputed cheque as per Ex.P.1 came to be issued. There is no dispute of the fact that Ex.P.1 cheque belongs to accused and it is signed by the accused. Hence, there is initial presumption in favour of the complainant under section 139 of the Negotiable Instruments Act, 1881, regarding issuance of cheque towards discharge of legally enforceable debt. However the accused has set up a specific defence that the complainant has only invested Rs.1,20,000/-, and he has issued a cheque for Rs.1,50,000/- on 14.12.2009. However the complainant has received another cheque bearing No.94139 dated 21.12.2009 asserting that the cheque under Ex.P.1 was lost by him. He would also contend that the second cheque issued bearing No.94139 was honoured and Rs.1,20,000/- was credited to the account of the complainant.

9. However, during the course of cross-examination, PW.1 complainant has denied this asp