2023 (10) TMI 1530 - SCH - Indian Laws

Dishonour of Cheque - failure of the complainant to prove his financial capacity to advance the loan amount - rebuttal of presumption u/s 139 of Negotiable Instruments Act 1881 - reliance placed upon materials submitted by the complainant - failure to discharge burden of prove on the part of complainant - HELD THAT - It is well settled that to rebut the presumption under Section 139 of Negotiable Instruments Act 1881 it is open to the accused to not only rely on the evidence led by him but he can also rely on the materials submitted by the complainant in order to raise a probable defence. The respondent s counsel rely on the ratio in Basalingappa vs Mudibasappa 2019 (4) TMI 660 - SUPREME COURT to say that complainant here failed to discharge his burden. The High Court has affirmed the judgment of acquittal favouring the accused in the proceeding under Section 138 of the NI Act. In the absence of any infirmity there are no reason to entertain the appeal. The appeal is accordingly dismissed leaving the parties to bear their own costs.

Summary

The Supreme Court of India dismissed the appeal challenging the High Court of Madras's order upholding the acquittal of the respondent in a proceeding under Section 138 of the Negotiable Instruments Act, 1881. The core issue was the complainant's failure to prove financial capacity to advance the loan amount of Rs. 8,00,000/-. The Trial Court noted that the complainant claimed to have borrowed this sum from his mother, who was not produced as a witness, and the underlying sale transaction purportedly providing funds to the mother was subsequently canceled, undermining the complainant's claim.The Court reiterated the settled principle that to rebut the presumption under Section 139 NI Act, "it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence," citing Basalingappa v. Mudibasappa, (2019) 5 SCC 418. Given the absence of infirmity in the High Court's judgment, the Supreme Court found no reason to interfere and dismissed the appeal, leaving parties to bear their own costs. The Court also acknowledged the assistance of the Amicus Curiae in arriving at its conclusion.