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2025 Supreme(Online)(Mad) 64387
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dr. R.N.MANJULA, J
N.T.Sukumaran – Appellant
Versus
C.Abdulwahab – Respondent
Crl.A(MD)No. 411 of 2018
For the Appellants/Petitioners: Mr.K.Muthu Gnanapandian
For the Respondents: Mr.Gopalakrishna Lakshmana Raju Senior Counsel for Mr.R.Venkateswaran
The court established that financial capability must be evidenced for enforceable loan transactions, and initial presumptions under Section 139 can be rebutted by adequate contrary evidence.
Headnote:(A) Negotiable Instruments Act, 1881 - Section 138 - Appeal against acquittal - The complainant alleged that a loan of Rs.10,00,000/- was given to the accused, leading to a bounced cheque - The first appellate court found the appellant failed to prove financial capability to lend such a sum - Without adequate documentation to support the loan, the initial presumption favoring the appellant was rebutted by the respondent - The complaint was dismissed confirming the acquittal. (Paras 4, 11, 20)
(B) Burden of Proof - The evidential burden shifts to the complainant after an initial presumption under Section 139 of the Act is activated. The court emphasized that the appellant must provide clear evidence of the loan agreement, especially when large amounts are involved without formal records or witnesses. (Paras 15, 19)
Facts of the case:
The complainant alleged lending Rs.10,00,000/- to the accused, supported by a bounced cheque, which led to his conviction that was reversed on appeal due to lack of proof of financial capability.
Findings of Court:
The evidence on record did not substantiate the claim of the complainant in establishing that the cheque was issued for a debt under the Negotiable Instruments Act.
Issues: The key issue was whether the appellant could establish his financial capacity to lend the stated amount, and whether the cheque was issued to discharge a legally enforceable debt.
Ratio Decidendi: The court ruled that once a presumption under Section 139 is established, the onus shifts to the accused; however, if rebuttal evidence is provided, the burden shifts back to the complainant to prove the existence of consideration.
Result: Appeal dismissed.
| Table of Content |
|---|
| 1. loan transaction details and financial capability of the complainant. (Para 2 , 5) |
| 2. arguments regarding the financial position of the parties involved. (Para 6) |
| 3. observations on the presumption under the nia and the burden of proof. (Para 7 , 12 , 15) |
| 4. judicial reasoning on the burden of proof and evidential requirements. (Para 19) |
| 5. conclusion dismissing the appeal. (Para 20) |
JUDGMENT
This Criminal Appeal has been preferred by the complainant challenging the judgment of acquittal made in C.C.No.19 of 201 dated 12.07.2018 on the file of the learned Additional District and Sessions Judge, Palani.
2. The case of complainant is that the respondent/accused had availed Rs.10,00,000/- (Rupees Ten Lakhs only) as loan from the complainant and towards discharge of the same, he had executed a cheque drawn in favour of Karur Vaisya Bank, Palani, dated 28.07.2015. The appellant had deposited the cheque for collection in the bank and it was returned on 29.09.2015 for the reason of 'fund insufficient'.
3. After informing the respondent and also by issuing legal notice and complying the legal mandates, a private complaint has been filed before the learned Judicial Magistrate, Fast Track Magistrate Court, Palani. At the conclusion of the trial, the learned Magistrate had found the accused guilty for the offence under Section 138 of Negotiable Instruments Act and convicted and sentenced him to undergo one year (S.I) with a fine of Rs.5,000/- in default to undergo one month (S.I). 4. The above judgment was challenged by the respondent by preferring an appeal before the Sessions Court and the said appeal was allowed and consequently, the accused was acquitted.
5. The learned counsel for the appellant submitted that the first appellate court had chosen to reverse the well reasoned judgment of the learned Magistrate only on the ground that the appellant did not prove his financial wherewithals to lend a loan of Rs.10 lakhs to the accused. He further submitted that the accused has been working as a Marine Engineer and he has been drawing a salary of Rs.85,000/- per month and his father also transferred his retirement benefits and other finances to his account frequently and hence, he had the financial capability of lending a sum of Rs.10 lakhs to the respondent. But that was not properly considered by the first appellate court.
6. The learned counsel for the respondent/accused submitted that the first appellate court had rightly appreciated the fact that the appellant did not have the sufficient funds in his account during the relevant point of time, when he is alleged to have lent a sum of Rs.10 lakhs to the respondent; the appellant had not chosen to file his bank account details in order to show that the money transferred from the account of his father has been credited to his account and there it was very much available for him while the loan was lent to the accused.
7. This Court gave anxious consideration to the submissions made on either side and carefully perused the materials available on record.
8. In the complaint of the appellant and in his evidence, he had stated that he had lent a sum of Rs.10 lakhs to the accused on 26.03.2015. The accused assured to repay the same within a period of three months and had executed the impugned cheque dated 28.09.2015. In the cross examination, it is stated that the respondent/accused is a friend and he was known to him through his distant relative by name, Chellamuthu and the said Chellamuthu is no more now.
9. The respondent/accused is doing agriculture and he had requested the loan directly to the complainant. He further stated that at the time when he gave the loan to the respondent, there is no other person except the complainant and the respondent and they were alone.
He further stated that the transaction was not known to his parents and his wife.
10. When the respondent was known to the appellant just through a distant relative, it is difficult to believe that he convinced himsel
