The court upheld the trial court's acquittal of the accused in a dishonor case, emphasizing that doubts about debt validity rebut statutory presumptions under the Negotiable Instruments Act.

JUDGMENT

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. As per the complaint, the accused owed an amount of Rs.3,00,000/- to the complainant and towards discharge of the said debt, the accused issued a cheque dated 04.03.2006 for Rs.3,00,000/- to the complainant.

3. 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.

4. Before the trial court, from the side of the complainant, PWs 1 and 2 were examined and Exhibits P1 to P6 and Exhibits X1 and X2 were marked. From the side of the accused, DW1 examined.

4. After hearing both sides and considering the oral and documentary evidence on record, 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 Sri. Pranoy K. Kottaram, the learned counsel representing the learned counsel for the appellant on record, Sri. K.P Hareendran, the learned counsel for the accused/first respondent and Sri. Alex M. Thombra, the learned Senior Public Prosecutor for the second respondent.

6. The learned counsel for the appellant argued that the trial court ought to have found that the complainant is entitled for the benefit of the statutory presumptions under Sections 118 and 139 of the N.I Act. It is also argued that the accused has not succeeded in rebutting the statutory presumptions.

7. The learned counsel for the accused/first respondent argued that the complainant has not disclosed the date of execution and issuance of the cheque in the complaint or in the statutory notice or in the chief affidavit of PW1 and that the evidence PW1 in cross examination regarding the alleged transaction does not tally with the averments in the complaint. It is also argued that the evidence of PW1 in cross examination would clearly show that the case put forward by the accused is more probable.

8. In cross examination, PW1 stated that he was conducting a super market in Muscat and that he had occasion to see the accused in Muscat at that time. PW1 denied that along with others, he conducted a chitty in Muscat. He would say that the accused was residing at a distance of half kilometre from his shop and that the accused was employed in a construction company there. However, PW1 would say that he paid Rs.3,00,000/- to the accused while he was in his house in his native place and regarding the source, PW1 stated that he has withdrawn Rs.2,00,000/- from the Syndicate Bank and he also used the amount received in a chitty for advancing the loan of Rs.3,00,000/- to the accused on 10.09.2005.

9. When a specific suggestion was made to PW1 that the signature and other writings in the cheque are in different ink, his response was that he cannot say the same. PW1 stated that he has not conducted any enquiry as to whether the accused is now operating the said account. However, he denied the suggestion that the accused was not operating the said account for the last 15 years. PW1 denied the suggestion that he obtained possession of the cheque while he was abroad. He also denied the suggestion that the accused never issued Exhibit P1 cheque to him.

10. The Manager of the Syndicate Bank, Mahi branch is examined as PW2 and he deposed that the cheque was dishonoured for the reason ‘funds insufficient’ as per Exhibit P2 memo. The accused is examined as DW1 and he deposed that he never borrowed an