The presumption of the issuance of a cheque in discharge of a debt under Sections 138 and 139 of the NI Act must be upheld in the absence of substantial evidence to the contrary from the accused.

JUDGMENT :

G BASAVARAJA, J.

1. The appellant/complainant has preferred this appeal against the judgment of acquittal dated 08.08.2019 passed in Crl.A.No.30/2019 by the V Additional Sessions Judge, Mandya (for short 'the trial Court').

2. For the sake of convenience, the parties herein are referred to as per their status before the trial court.

3. Brief facts leading to this appeal are that, the complainant and accused are well known to each other. Accused had borrowed a sum of Rs.2,80,000/- from the complainant on 18.12.2015 for the purpose of legal necessities i.e., for discharge of hand loan and to purchase the Toyota DCM vehicle. The accused had agreed to repay the loan amount within two months. After lapse of two months, complainant demanded for the repayment of the loan amount, but the accused had issued a cheque bearing No.074500 dated 20.02.2016 drawn on HDFC Bank, V.V.Puram Branch, Bengaluru for a sum of Rs.2,80,000/- in favour of the complainant. As per the instruction of the accused, the complainant had presented the said cheque for encashment through his collective bank i.e., Vijaya Bank, Koppa Branch. The said cheque was returned on 01.03.2016 with endorsement "insufficient funds". Then the complainant contacted the accused and informed the matter. But the accused had not responded properly. Complainant had issued a legal notice to the accused on 11.03.2016 through RPAD. The notice was served on accused on 20.03.2016. The accused had neither replied to the notice nor paid the loan amount. Hence, the complainant/appellant lodged a complaint under Section 138 of NI Act. After filing the complaint, case was registered in PCR.No.276/2016. After taking cognizance, case was registered in CC.No.1053/2016. Summons was issued to the accused. In response to summons, accused appeared before the trial Court and enlarged on bail. Substance of plea was recorded. Accused pleaded not guilty and claimed to be tried.

4. To prove the guilt of the accused, one witness was examined as PW1, 5 documents were marked as Exs.P1 to P5. On closure of complainant side evidence, statement under Section 313 of Cr.P.C was recorded. Accused has totally denied the evidence of PW1 and he has adduced the evidence of DW1. No documents produced on behalf of the accused.

5. Having heard the arguments on both sides, the trial Court has convicted the accused for the offence under Section 138 of NI Act and sentenced to pay a fine of Rs.2,95,000/-. Being aggrieved by the judgment of conviction and order on sentence, the complainant/appellant has preferred Criminal Appeal No.30/2019 before the V Additional Sessions Judge, Mandya. The appeal came to be allowed and the judgment of conviction and order on sentence passed by the trial Court was set aside. Accused was acquitted. Being aggrieved by the judgment of acquittal passed by the First Appellate Court, the appellant has preferred this appeal.

6. Learned counsel for the appellant would submit that the Appellate Court has grossly erred in reversing the judgment of the trial Court. The appellate Court has ignored the provision of Section 139 of NI Act. The respondent has taken the main defence that, the appellant has no financial capacity to lend the amount of Rs.2,80,000/- to the respondent. On 18.12.2015, the respondent had taken this defence during the cross- examination of PW1. PW1 has stated as to his annual income from agricultural land, from coolie work, sale proceeds from immovable property, occupation of his son, etc. Further he has stated that there is no difficulty to produce the documents for having sold his properties. However, when there was no necessity for producing any docu