Absence of Primary Financial Evidence Rebuts Presumption of Legally Enforceable Debt Despite Admitted Signature

The appellant, a Chartered Accountant, filed a complaint under Section 138 of the Negotiable Instruments (N.I.) Act alleging that Respondent No. 2 issued a cheque for Rs. 7,64,300.53 dated December 31, 2009, as repayment for a loan

The cheque was dishonored due to "insufficiency of funds" on May 3, 2010

Despite a statutory demand notice sent on May 15, 2010, the respondent failed to make payment

The respondent’s defense contended that 30–40 blank signed cheques were given to the appellant in his professional capacity as an accountant for routine book entries, and no legally enforceable debt existed at the time of presentation

The Trial Court acquitted the respondent, primarily on the ground that the appellant lacked a money-lending license under the Bengal Money Lenders Act, 1940

1. Whether the absence of a money-lending license under the Bengal Money Lenders Act, 1940, bars a proceeding under Section 138 of the Negotiable Instruments Act

2. Whether the appellant successfully established the existence of a legally enforceable debt to sustain a conviction under Section 138 of the N.I. Act

Section 138 of the N.I. Act, which requires an instrument to be drawn for the discharge of a "legally enforceable debt or other liability"

Section 139 of the N.I. Act, which creates a rebuttable presumption in favor of the holder that the cheque was received for such discharge

The presumption under Section 139 operates unless a "highly probable defense" is established [Bir Singh v. Mukesh Kumar]

The presence or absence of a money-lending license is irrelevant to criminal proceedings under the N.I. Act [Jupiter Brokerage Services Limited v. Ektara Exports Pvt. Ltd. and Samarendra Nath Das v. Supriyo Moitra]

The Court observed that while the Trial Court erred in applying the Bengal Money Lenders Act to a criminal proceeding, the acquittal was nonetheless sustainable based on the factual vacuum in the appellant’s case.

Despite being a Chartered Accountant, the appellant failed to provide specific details regarding the loan date, interest rate, or any contemporaneous accounting records and bank statements to prove the actual disbursement of capital

Conversely, the respondent provided a plausible and contextual defense—that the cheques were delivered in trust to his professional accountant for business entries

By exposing the total lack of primary financial documentation, the defense successfully rebutted the Section 139 presumption through a "preponderance of probabilities"

The Court emphasized that an appellate court should not disturb an acquittal if the Trial Court’s view is plausible and not "permanently scarred by absolute perversity"

The High Court affirmed the judgment of acquittal and dismissed the appeal (C.R.A. 528 of 2013), ordering the Trial Court records to be returned