Admission of cheque issuance for alternative purpose rebuts the presumption of legally enforceable debt under NI Act.

The appellant (original complainant) filed a complaint under Section 138 of the Negotiable Instruments (NI) Act, alleging he lent a friendly loan of Rs. 2,00,000 to the accused.

In discharge of this debt, the accused purportedly issued a cheque dated 22.01.2004, which was dishonoured due to "insufficient balance".

Despite a statutory notice, the accused failed to pay, leading to a criminal case where the accused pleaded not guilty, claiming the cheque was a blank signed instrument misused by the complainant.

The Trial Court acquitted the accused on 06.03.2006, finding that the complainant failed to prove a legally enforceable debt.

The complainant subsequently preferred this appeal against the acquittal.

1. Whether the complainant established that the cheque was issued in discharge of a legally enforceable debt or liability as required under Section 138 of the NI Act.

2. Whether the accused successfully rebutted the statutory presumption under Section 139 of the NI Act.

3. Whether the Trial Court’s judgment of acquittal was perverse or suffered from manifest illegality warranting interference under Section 378 of the CrPC.

The Court primarily applied Section 138 of the Negotiable Instruments Act, which mandates that a cheque must be issued for the discharge of a "legally enforceable debt or other liability".

It further relied on Section 139 of the NI Act, which creates a reverse onus clause, presuming the cheque was issued for a debt unless the accused proves the contrary.

The Court also referenced Section 102 of the Indian Evidence Act regarding the burden of proof.

The established appellate principle that an order of acquittal should not be disturbed unless the trial court’s view is perverse or ignores material evidence.

The Court observed that while Section 139 creates a presumption in favor of the complainant, this presumption is rebuttable.

In this case, the complainant’s own testimony was self-contradictory; in his deposition, he cited the accused's maternal uncle's death as the reason for the loan, whereas in cross-examination, he cited business losses.

Critically, the complainant admitted during cross-examination that the cheque was blank (signed only) and was actually intended as a refund for fees paid to a marriage bureau run by the accused for the complainant’s daughter.

The Court reasoned that since the complainant himself admitted the cheque was related to a marriage bureau refund rather than the alleged Rs. 2,00,000 loan, the existence of the specific legally enforceable debt claimed in the complaint was disproven.

The Court found that the accused successfully raised a probable defense, shifting the burden back to the complainant, which he failed to discharge.

Finding no manifest illegality or perversity in the Trial Court’s findings, the Court declined to interfere with the acquittal.

The Criminal Appeal was dismissed, and the judgment of the lower court was confirmed.