Dishonour of Cheque: Statutory Presumption Rebutted by Lack of Evidence Proving Existence of Legally Enforceable Debt.

The Appellant (a Chartered Accountant) filed a complaint under Section 138 of the Negotiable Instruments Act (N.I. Act) after a cheque for Rs. 3,92,831.14 was dishonoured for "insufficiency of funds"

The Respondent admitted the signature but claimed the appellant, acting as his tax consultant, had taken 30-40 blank signed cheques for routine book entries and misused them

The Trial Court acquitted the Respondent on January 2, 2012, primarily on the grounds that the Appellant lacked a money-lending licence under the Bengal Money Lenders Act, 1940, rendering the debt legally unenforceable

The Appellant challenged this acquittal, asserting that the statutory presumption under Section 139 of the N.I. Act was not rebutted

1. Whether the absence of a money-lending licence under the Bengal Money Lenders Act, 1940, precludes a proceeding under Section 138 of the N.I. Act

2. Whether the statutory presumption under Section 139 of the N.I. Act was effectively rebutted by the accused through a "preponderance of probabilities"

3. Whether the High Court should interfere with a Trial Court’s order of acquittal where a plausible alternative view exists

The court applied Section 138 (dishonour of cheque) and Section 139 (rebuttable presumption of debt) of the Negotiable Instruments Act, 1881

It relied on Bir Singh v. Mukesh Kumar, which establishes that even a signed blank cheque attracts the rigor of Section 139 unless rebutted by cogent evidence

Precedents like Hiten P. Dalal v. Bratindranath Banerjee and Rajesh Jain v. Ajay Singh were noted to confirm that once issuance is clear, the court must draw a presumption in favor of the holder

The court applied the principle from Jupiter Brokerage Services Limited v. Ektara Exports Pvt. Ltd., asserting that a money-lending licence is irrelevant to deciding if a liability constitutes a "legally enforceable debt" under the N.I. Act

The High Court agreed that the Trial Court erred in law by ruling that a money-lending licence was a prerequisite for a Section 138 complaint

However, the court found that the Appellant (a professional accountant) failed to prove the underlying transaction; he could not state the date of the loan, the rate of interest, or produce any bank statements or receipts to corroborate the movement of capital

Conversely, the Respondent’s defense—that he handed over blank cheques to his accountant in a fiduciary capacity—was deemed a "highly probable" explanation of human conduct

The court reasoned that while the Section 139 presumption exists, it was successfully rebutted by the "factual vacuum" in the Appellant’s evidence and the "cloud of doubt" created by the defense

The Court held that an appellate court must exercise restraint and not disturb an acquittal unless the Trial Court's findings are "permanently scarred by absolute perversity"

As the Trial Court’s view was plausible and the debt was not established beyond a reasonable doubt, the appeal was dismissed, and the judgment of acquittal was affirmed