Court reaffirmed that in cheque dishonor cases, the appellant must prove the cheque's issuance arises from a legitimate debt obligation, especially when prior agreements exist contradicting claimed transactions.

JUDGMENT :

M.NIRMAL KUMAR, J.

1. The appellant as complainant filed private complaint for offence under Section 138 of Negotiable Instruments Act, 1881 in STC.No.90 of 2015 before the learned Judicial Magistrate No.I, Perambalur (trial Court) against the respondent. The trial Court by judgment dated 29.01.2020 dismissed the complaint and acquitted the respondent. Against which, present criminal appeal filed.

2.Despite service of notice to the respondent and his name printed in the cause list, there was no representation for the respondent either in person or by any counsel. Hence, this Court by order dated 30.10.2025 appointed Ms.J.Hakshara Shree as Legal Aid Counsel for the respondent.

3.Gist of the case is that the respondent borrowed a sum of Rs.3,00,000/- (Rupees three lakh only) from the appellant on 15.10.2012 for his business purpose and promised to repay within one month from the date of loan received. But the respondent never repaid the loan amount, after repeated request, the respondent in repayment of loan issued a cheque (Ex.P1) bearing No.325357 dated 25.12.2012 for a sum of Rs.3,00,000/- (Rupees three lakh only) drawn on the Lakshmi Vilas Bank, Perambalur to the appellant. When the cheque presented in the complainant's bank account viz., Indian Overseas Bank, Red Fields Branch, Coimbatore on 25.12.2012, the same returned for the reason “Insufficient Funds” on 28.12.2012. Thereafter, statutory notice (Ex.P3) dated 05.01.2013 issued to the respondent who received the same on 07.01.2013. But neither paid the cheque amount nor sent any reply. Following statutory procedure, complaint filed before the trial Court. During trial, the appellant examined himself as PW1 and marked Exs.P1 to P4. The respondent examined himself as DW1 and marked Exs.D1 to D8. On conclusion of trial, the trial Court dismissed the complaint and acquitted the respondent. Challenging the same, present criminal appeal filed by the appellant/complainant.

4.Learned counsel for the appellant/complainant submitted that the trial Court failed to consider that the cheque (Ex.P1) duly presented, it was sent to Indian Overseas Bank for encashment, thereafter, the cheque (Ex.P1) returned for the reason “Insufficient Funds” by return memo (Ex.P2) dated 28.12.2012. He further submitted that appellant examined himself as PW1 and marked Exs.P1 to P4. The respondent in this case received statutory notice (Ex.P3) and postal acknowledgment (Ex.P4) confirms the same. The appellant was cross examined in detail by the respondent, at that time, he took a stand that the appellant belongs to Coimbatore district and the respondent hails from Perambalur which is 200 km far away place and there is no reason for appellant giving loan to the respondent when there is no other relationship between them. Further, the appellant's financial capability questioned, the appellant confirmed he was running lorry transport business and had sufficient income to lend a loan. The appellant was questioned with regard to Income Tax Returns, thereafter respondent failed to probablize his defence that appellant had no source of income and he was not a man of resources. The respondent admits registered sale agreement in document No.5002 of 2011 dated 17.08.2011 between appellant and respondent and the sale to be concluded within 11 months. In this case, respondent failed to complete payment and conclude the agreement, a legal notice for the sale transaction issued. The specific case is that the cheque (Ex.P1), given at the time entering sale agreement, filled up during December 2012.

5.Learned counsel for the appellant further submitted that