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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
RAJESH RAI K.
Tulasappa Kalmani, S/o. Yankappa Kalmani – Appellant
Versus
Poojari Shekappa, S/o. Ayyappa – Respondent
JUDGMENT :
(RAJESH RAI K., J.)
In this appeal, the appellant/complainant has assailed the judgment of acquittal passed in CC No.1111/2015, dated 21.04.2017 by the Principal Civil Judge and JMFC, Gangavathi, [Hereinafter referred to as ‘trial Court’] whereby the learned Magistrate acquitted the respondent/accused for the offence punishable under Section 138 of Negotiable Instruments Act, 1881, [Hereinafter referred to as ‘NI Act’]
2. The parties are referred to as per their rankings before the trial Court, for the sake of convenience.
3. The abridged facts are that, the complainant and the accused are the family friends. On 24.01.2015, the accused borrowed a hand loan of Rs.8,00,000/- from the complainant for his family needs and financial difficulties with the assurance that he would repay the same with interest @ 24% per annum within two months. To discharge the said legal debt, the accused on the same day issued post dated cheque of Rs.8,00,000/- bearing No.960154 dated 24.03.2015 drawn on Andhra Bank, Gangavathi Branch. When the complainant presented the said cheque through its banker for encashment, the same returned with an endorsement “insufficient funds”. Subsequently, the compl
The trial court's acquittal was upheld as the complainant failed to provide sufficient evidence to prove the lending capacity and enforceable debt under Section 138 of the NI Act.
The complainant must substantiate claims of loan and repayment; initial presumptions do not relieve him of the burden to prove a legally enforceable debt.
Presumption under Section 139 of the NI Act is rebuttable and requires foundational proof of debt; mere issuance of a cheque is insufficient for conviction.
The main legal point established in the judgment is the requirement for the complainant to prove the existence of a legally enforceable debt and the dishonor of the cheque in a case under Section 138....
The burden of proof in Section 138 NI Act cases shifts to the complainant when the accused challenges their financial capacity, emphasizing that presumption of innocence protects the acquitted party.
The burden of proof in dishonor cases under the N.I. Act shifts to the accused upon issuance of the cheque, and can be rebutted through evidence and inconsistencies by the complainant.
The presumption of consideration for a cheque does not negate the complainant's burden to prove the existence of a legally recoverable debt, which can be rebutted by the accused.
The presumption of a legally enforceable debt is rebuttable and the prosecution must prove its case beyond reasonable doubt, which was not met in this instance.
The complainant must prove the existence of a legally enforceable debt in a Section 138 NI Act case, and discrepancies in testimony can undermine the presumption of consideration.
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