Lender’s Conflicting ₹6 Lakh And ₹9 Lakh Loan Figures: Madras HC Upholds Borrower’s Cheque-Bounce Acquittal

In brief

The question

Whether the appellant’s evidence and documents established the alleged legally enforceable liability and sustained the statutory presumption under the Negotiable Instruments Act

The court held

The High Court held that the trial court correctly acquitted the respondent and found no basis to interfere with that acquittal

It also directed

The appeal was dismissed, and the acquittal dated 26 April 2021 in STC No. 12 of 2013 was confirmed

01Facts

The appellant brought a complaint under Section 138 of the Negotiable Instruments Act, alleging that the respondent issued a cheque for Rs.2,51,000 towards partial repayment of a loan, which was dishonoured for insufficient funds

p. 2 · ¶ 2

The trial court acquitted the respondent, finding material inconsistencies in the appellant’s evidence concerning the loan amount, the vehicles financed, and whether the loan was advanced to the respondent alone or jointly with his brother

p. 3 · ¶ 4

The appellant appealed the acquittal under Section 378(4) of the Code of Criminal Procedure

p. 1

02Issues

i.Whether the appellant’s evidence and documents established the alleged legally enforceable liability and sustained the statutory presumption under the Negotiable Instruments Act

pp. 5–7 · ¶ 7–11

ii.Whether the trial court’s acquittal was perverse or otherwise warranted appellate interference

pp. 7–8 · ¶ 12–13

03Law Applied

Section 138 of the Negotiable Instruments Act criminalises the dishonour of a cheque issued towards discharge, wholly or partly, of a legally enforceable debt or liability

p. 2 · ¶ 2

The judgment refers to the statutory presumption in favour of the complainant and recognises that the accused may rebut it; the court assessed whether the appellant’s evidence and cross-examination supported such rebuttal

pp. 6–7 · ¶ 10–11

In an appeal against acquittal, interference is not warranted where the trial court properly appreciated the evidence and its decision is not perverse

p. 8 · ¶ 12

Provisions in the judgment · 2 · Linked ones open on LawLens

Code of Criminal Procedure, 1973 Section 378

Negotiable Instruments Act, 1881 Section 138

04Reasoning

The appellant’s complaint, proof affidavit, and exhibits materially conflicted: the asserted loan amount varied between Rs.9,02,400 and Rs.6 lakhs, while the hire-purchase agreements themselves referred to Rs.4,51,200 on one page and Rs.6 lakhs on another

pp. 5–6 · ¶ 7–8

The appellant could not explain the discrepancies, gave an evasive answer when asked which loan amount was correct, and had not pleaded in the complaint that a second lorry was financed for the respondent’s brother

p. 6 · ¶ 7–8

The earlier notice said to have prompted the cheque was not produced

p. 6 · ¶ 9

Although the respondent’s asserted repayment was also not established, the appellant’s evidence in cross-examination was sufficient to rebut the statutory presumption

pp. 6–7 · ¶ 10

The trial court’s assessment was therefore not perverse

p. 8 · ¶ 12