The judgment emphasizes the importance of proving the capacity to extend a loan and the rebuttal of statutory presumption under the Negotiable Instruments Act.

Sanjeev Sachdeva, J.

Petitioner impugns judgment dated 19.12.2014 whereby the Appellate Court has set aside the judgment dated 23.09.2013 of the trial court. The Trial Court by the impugned judgment dated 23.09.2013 had convicted the respondent of an offence under Section 138 of the Negotiable Instruments Act.

2. The Appellate Court has reversed the judgment and acquitted the respondent of the offence under Section 138 of the Negotiable Instruments Act.

3. Complaint was filed by the petitioner herein contending that a friendly loan of Rs. 4,90,000/- was given to the respondent as they had good relations and in discharge thereof the respondent had issued the subject cheque dated 03.11.2009 for Rs. 4,90,000/-. When the cheque was presented, it was returned unpaid for the reasons 'insufficient funds'.

4. Trial Court by the judgment dated 23.09.2013 held that the issuance of the cheque was not in dispute and despite services of legal notice payment was not made by the respondent. Trial Court was of the view that the evidence on record was not supportive of the innocence of the accused. Trial Court negated the defence of the respondent that the cheque was issued in blank to Subhash Aggarwal, the employer of the petitioner and the cheque had been misused. Trial Court held that as no complaint was filed against the petitioner, so the plea of the respondent was not believable.

5. Appellate Court by the impugned order found that the petitioner was an employee working in the shop of Mr. Subhash Aggarwal and earning only Rs. 15,000/- per month and his wife was earning only Rs. 15,000/- per month. The Appellate Court found that evidence established that the petitioner's family expenditure was about Rs. 20,000/- per month. Appellate Court noticed that there was no material to show that the petitioner had capacity to make an arrangement of Rs. 4,90,000/- to give as friendly loan to the respondent.

6. Appellate Court found favour with the statement of the respondent that he had a transaction with Mr. Subhash Aggarwal (employer of the petitioner) to whom blank cheques were given as security and the cheque had been misused and filled in the name of the petitioner and deposited in the bank. Appellate Court has also noticed that the ink used on the body of the cheque was different from the ink used for signing the cheque.

7. Looking at the monthly income and the household expenditure of the petitioner and the fact that the petitioner had not been able to disclose the source from where cash of Rs. 4,90,000/- was arranged for advancing the friendly loan, the Appellate Court was of the view that it was not believable that petitioner would arrange a huge sum of Rs. 4,90,000/- when his monthly income was only Rs. 15,000/- per month to advance as a friendly loan to the respondent.

8. Appellate Court has also noticed that the petitioner has failed to show or aver as to when the alleged loan of Rs. 4,90,000/- was given to the respondent and demanded back.

9. The appellate court, with regard to the defence of the respondent that he had transaction with Mr. Subhash Aggarwal employer of the petitioner, held as under: -

“8. It is the case of the appellant that he had some transactions with Subhash Aggarwal, who is owner of Shagun Jewellers and he had given some blank cheques to Subhash Aggarwal. To prove this fact the appellant has examined Sh. Om Prakash S/o Sh. Khem Chand as DW-1, who is business partner of the appellant. This witness deposed that he used to accompany the appellant to the showroom of Subhash Aggarwal and whenever there was shortage of money Gopal Halwai (appellant) used to give cheques. Similar statement is given by DW-2 Ms. Usha Rani Malhotra that in her presence 4 to 5 blank cheques were given to Subhash Aggarwal. DW-3 is son of the appellant, who has also deposed that whenever, there was shortage of money Sh. Subhash Aggarwal used to take blank cheques from his father. After receiving the payment Subhash Aggarwal avoided to return the