IN THE HIGH COURT OF KERALA AT ERNAKULAM
JOHNSON JOHN
O.Gangadharan, S/o. Kelappan – Appellant
Versus
T.Sajith Kumar, S/o. Gangadharan – Respondent
JUDGMENT :
JOHNSON JOHN, J.
This appeal by the complainant is against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (‘N.I Act’ for short).
2. The allegation in the complaint is that the accused borrowed Rs.1,50,000/- from the complainant during April, 2002 and towards discharge of the said liability, he issued cheque dated 25.7.2002 for Rs.1,50,000/-. Subsequently, when the complainant presented the cheque for collection, the same was dishonoured due to insufficiency of funds in the account of the accused and in spite of issuance of statutory notice, the accused failed to pay the cheque amount to the complainant.
3. Before the trial court, from the side of the complainant, PWs 1 and 2 were examined and Exhibits P1 to P5 were marked and from the side of the accused, DW1 examined and Exhibit D1 marked.
4. After considering the oral and documentary evidence on record and hearing both sides, the trial court found that the complainant has not succeeded in proving the offence under Section 138 of the N.I Act against the accused and hence, the accused was acquitted.
5. Heard Smt. Bhavana K.K., the learned counsel representing the learned counsel for the

Service of statutory notice under Section 138 of the Negotiable Instruments Act is crucial, and failure to prove proper service results in the acquittal of the accused.
The acquittal under Section 138 of the Negotiable Instruments Act is upheld due to insufficient proof by the complainant regarding the cheque issuance and failure to establish proper service of the s....
The complainant must prove both the execution of the cheque and proper service of statutory notice under Section 138 to establish liability.
Dishonour of cheque – Standard of proof, in order to rebut statutory presumption, can be inferred from materials on record and circumstantial evidence.
The acquittal in a 138 NI Act case can be upheld if the complainant fails to prove the existence of a debt beyond reasonable doubt.
The presumption under Section 139 of the NI Act is rebuttable, transferring the burden to the complainant if sufficient evidence creates doubt in the case.
Dishonour of cheque – Accused had to prove by cogent evidence that there was no debt or liability.
The court established that once a cheque is issued and signed, a legal presumption exists regarding its use for a valid debt, shifting the burden of proof to the accused to deny its validity.
The burden of proof, legal presumptions, and the accused's admission of debt in the issuance of the cheque are crucial in determining liability under the Negotiable Instrument Act.
Presumption under Section 139 NI Act that cheque is for debt discharge holds unless rebutted by preponderance of probabilities; trial acquittal reversed for perversely ignoring defence witness confir....
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