A complainant must demonstrate ownership as the payee or holder in due course to maintain a complaint under Section 138 of the NI Act; failure to establish this results in dismissal.

JUDGMENT

Rakesh Kainthla, J.

The present appeal is directed against the judgment dated 16.10.2012, passed by learned Judicial Magistrate First Class, Court No. 2, Ghumarwin, District Bilaspur, H.P., vide which the respondent (accused before the learned Trial Court) was acquitted of the commission of an offence punishable under Section 138 of the Negotiable Instruments Act 1881 (NI Act). (Parties shall hereinafter be referred to in the same manner as they were arrayed before the learned Trial Court for convenience.)

2. Briefly stated, the facts giving rise to the present appeal are that the complainant filed a complaint before the learned Trial Court for the commission of an offence punishable under Section 138 of the NI Act. It was asserted that the complainant was a proprietor of M/s Baba Enterprises at Ghumarwin. The accused had friendly relations with the complainant. The accused came to the complainant four years before filing the complaint, demanding a family loan of Rs.80,000/-. He promised to repay the amount within one month. The complainant asked the accused to return the amount. The accused issued a cheque of Rs.80,000/-drawn on H.P. State Cooperative Bank at Ghumarwin to discharge his liability. The complainant presented the cheque for encashment, but it was dishonoured with an endorsement that ‘the firm has changed the title of the account and the account had been changed’. Hence, it was prayed that an action be taken against the accused.

3. Learned Trial Court found sufficient reasons to summon the accused. When the accused appeared, a notice of accusation was put to him for the commission of an offence punishable under Section 138 of the NI Act, to which he pleaded not guilty and claimed to be tried.

4. The complainant examined himself (CW1), Sukh Dev Rana (CW2) and Prakash Chand (CW3) to prove his complaint.

5. The accused, in his statement, recorded under Section 313 of Cr.P.C., admitted that he knew the complainant. He denied that he had borrowed money from the complainant. He claimed that he was innocent. He stated that he wanted to lead defence evidence, but did not lead any evidence.

6. Learned Trial Court held that the cheque was issued in the name of Baba Enterprises, and there was no evidence to connect the complainant to Baba Enterprises. The complainant had no locus standi to file the complaint. Hence, the complaint was dismissed.

7. Being aggrieved by the judgment passed by the learned Trial Court, the complainant has filed the present appeal, asserting that the learned Trial Court erred in dismissing the complaint. The evidence was not properly appreciated. The complainant is the proprietor of Baba Enterprises, Ghumarwin.
He was not cross-examined regarding this aspect. The accused failed to rebut the presumption attached to the cheque, and the learned Trial Court erred in acquitting the accused. Hence, it was prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

8. I have heard Mr Pankaj Sharma, learned counsel for the appellant/complainant and Mr Neel Kamal Sharma, learned counsel for the respondent/accused.

9. Mr Pankaj Sharma, learned counsel for the appellant/complainant, submitted that the complainant had specifically claimed the ownership of Baba Enterprises in his proof affidavit, which was not challenged in the cross- examination. Learned Trial Court ignored the presumption attached to the cheque and erred in acquitting the accused. Therefore, he prayed that the present appeal be allowed and the judgment passed by the learned Trial Court be set aside.

10. Mr Neel Kamal Sharma, learned counsel for the respondent/accused,