Unsubstantiated Money Receipt Issued by Third Party Cannot Displace Statutory Presumption of Liability Under Section 138

The Petitioner (accused) borrowed a friendly loan of ₹1,10,000/- from Opposite Party No. 2 (complainant). To repay this, the Petitioner issued three cheques totaling the loan amount, which were dishonored due to "insufficient funds" on 05.06.2009

Despite a legal demand notice dated 22.06.2009, the Petitioner failed to pay, leading to a complaint under Section 138 of the Negotiable Instruments (N.I.) Act

The Trial Court convicted the Petitioner, sentencing him to one month of Simple Imprisonment and a fine of ₹1,10,000/-. This conviction was upheld by the Addl. Judicial Commissioner-VIII, Ranchi, in Criminal Appeal No. 203 of 2012

The Petitioner moved the High Court in revision, primarily arguing that a money receipt (Ext.-A) signed by the complainant’s son (P.W.-2) proved the debt had been discharged in cash

1. Whether the money receipt (Ext.-A) purportedly signed by the complainant’s son constitutes a valid discharge of the Petitioner’s legal liability toward the complainant under the N.I. Act

2. Whether the lower courts committed an illegality or perversity in convicting the Petitioner despite the defense evidence of repayment

The Court applied Section 138 of the Negotiable Instruments Act, 1881, which creates criminal liability for the dishonor of a cheque issued in discharge of a legally enforceable debt or liability

It also relied on the principle of the "burden of proof" in criminal revision, where the accused must demonstrate that the defense plea was substantiated during trial by confronting witnesses with relevant documents during cross-examination as per the Indian Evidence Act

The Court analyzed the evidentiary value of Ext.-A (the money receipt) and found it insufficient to rebut the complainant's case. It noted that while the Petitioner claimed to have paid the complainant's son (P.W.-2), the Petitioner failed to confront the complainant with this receipt during his examination on 18.11.2010

Furthermore, although P.W.-2’s signature and photo were exhibited on Ext.-A, he was never cross-examined or controverted regarding the actual receipt of ₹1,10,000/-

The Court observed that the liability was owed to the complainant, and the money receipt lacked any specific date or averment linking it to the discharge of the specific cheques in question

Consequently, the Court held that the defense plea was not an "effective and valid discharge" of liability, as the required procedural foundations for the defense evidence were not laid during the trial

The Criminal Revision was dismissed, and the judgment of conviction and sentence (one month S.I. and ₹1,10,000/- fine) was upheld