Madras HC Upholds Acquittal In ₹17 Lakh Cheque Case, Citing Lender’s Interest-Bearing Overdraft And No Matching Withdrawal

The complainant alleged that he lent the respondent ₹17,00,000 and received two cheques in repayment.

After the cheques were dishonoured for insufficiency of funds, he filed a complaint under Section 138 of the Negotiable Instruments Act, 1881.

The respondent denied borrowing from the complainant and disputed that the cheques represented a debt.

The trial court acquitted him, finding that the complainant’s financial circumstances, the absence of a corresponding bank withdrawal, and the non-production of the alleged promissory note supported a probable defence.

The appellate court affirmed the acquittal.

The complainant challenged that decision in revision.

Sections 118 and 139 of the Negotiable Instruments Act create rebuttable presumptions in favour of the cheque holder once the statutory requirements are satisfied.

Under Basalingappa v. Mudibasappa, (2019) 5 SCC 418, an accused may rebut those presumptions by raising a probable defence on a preponderance of probabilities, relying on defence evidence or material elicited from the complainant; if the presumption is rebutted, the complainant must prove the legally enforceable debt to the criminal standard.

Under Sections 397 and 401 of the Code of Criminal Procedure, revisional jurisdiction is limited: a concurrent acquittal is not to be disturbed merely because another view is possible, but may be interfered with for perversity, material misappreciation of evidence, or another serious legal or procedural error.

The Court found that the lower courts were entitled to consider the complainant’s claim that he lent a substantial sum without interest while maintaining an interest-bearing overdraft, together with the absence of a corresponding withdrawal in the bank records.

Those circumstances did not conclusively disprove the loan, but could support a probable defence when assessed with the evidence as a whole.

The fact that D.W.3 did not support the respondent’s specific account of how the loan was obtained did not, by itself, establish the complainant’s case.

The petitioner failed to show that the concurrent findings were perverse or otherwise affected by a material error warranting revisional intervention.

It dismissed the criminal revision and confirmed the appellate judgment affirming the respondent’s acquittal under Section 138 of the Negotiable Instruments Act; no costs were ordered.