IMPORTANT POINT
Appellate Court cannot upset a well-reasoned judgment of Trial Court.

Sanjeev Sachdeva, J.—The petitioner (complainant in the original complaint under section 138 of the Negotiable Instruments Act) impugns order dated 26.09.2015 passed by the appellate court, whereby the appellate court has set aside the order of conviction dated 24.07.2015 and order on sentence dated 31.07.2015 and acquitted respondent no. 1.

2. The petitioner had filed a complaint under section 138 of the Negotiable Instruments Act against the respondent no. 1 contending that petitioner had advanced a friendly loan of Rs. 1 lakh on 16.03.2011 and another loan of Rs. 1 lakh in April, 2011. The respondent in discharge of the said liability is alleged to have issued two post dated cheques in the sum of Rs. 1 lakh each; both dated 01.09.2011. When the said cheques were presented for encashment they were returned unpaid for the reasons of “Insufficiency of Funds”.

3. The petitioner issued a notice of demand dated 12.09.2011. Despite delivery of the same, the respondent failed to send any reply to the said notice of demand. Consequently, the subject complaint under section 138 of the Negotiable Instruments Act was filed.

4. By judgment dated 24.07.2015, the trial court convicted the respondent no. 1 of the offence under section 138 of the Negotiable Instruments Act. By order on sentence, respondent no. 1 was sentenced to simple imprisonment for a period of three months and directed to pay compensation of Rs. 3.50 lakhs within two months, failing which to further undergo simple imprisonment of two months.

5. By the impugned judgment dated 26.09.2015, the appellate court set aside the order on conviction and sentence and acquitted Respondent no. 1.

6. It is contended by learned counsel for the petitioner that the appellate court erred in setting aside the order on conviction. It is contended that the appellate court erred in holding that respondent had repaid the loan or that there was a running account between the parties. It is contended that the appellate court erred in holding that the respondent no. 1 had sufficiently rebutted the presumption that subject cheques had been issued in discharge of the liability. It is further contended that the appellate court erred in holding that presumption had been rebutted on the assumption that the cheque book had been issued prior to 01.01.2010 and the subject cheques were issued after about 1¾ years-in the year 2011 and thereby a suspicion arose that the cheques were lying in the custody of the petitioner for quite a sometime and had been misused.

7. Per contra, learned counsel for respondent no. 1 contended that the trial court had erred in not appreciating that Respondent no. 1 had duly rebutted the presumption and proved before the trial court that the said amount was not a loan advanced by the petitioner but the petitioner was running a “Committee” and had failed to disclose this fact before the trial court. Further it is contended that the respondent no. 1 had repaid the loan amount and made a total payment of Rs. 2.70 lakhs and only an amount of Rs. 7000/- was due and payable and the subject cheques were issued blank and given as a security. There was no legally recoverable debt when the cheques were presented for encashment. The Petitioner had admitted two entries of deposit of Rs. 10,000/- in the account of the petitioner and also deposit by brother of Respondent No. 1 into his account and also deposits into the bank account of the wife and daughter of the petitioner.

8. It may be noticed that the trial court in the order of conviction noticed that the respondent no. 1 had admitted that the cheques in issue were from his account. He had even accepted the signatures on the cheques. The defence raised was that the Respondent No. 1 had repaid the amount taken as loan. Noticing the fact that the cheques were admittedly signed by respondent no. 1, the trial court raised the presumption in favour of the petitioner. The trial court relying on several decisions of this Court held th