Niketan Finance Limited Vs. Ayeshabi Abbas Mamtuley and Ors. (Neutral Citation: 2024:BHC-AS:1645) - (High Court of Bombay) (15 Jan 2024)

Benefit under Section 139 of the NI Act cannot be availed if the accused raises a plausible defence, which creates doubts about the existence of a legally enforceable debt

MANU/MH/0200/2024

Banking

The legality, propriety and correctness of the Judgment passed by the learned Metropolitan Magistrate, whereby the Respondent No. 1/accused came to be acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1981 (NI Act), is assailed in present Appeal.

The main contention of the first respondent is that the offence under Section 138 was not committed because the amount claimed by the appellant under the cheque was never paid to her or her husband. The evidence on record demonstrates that no loan application was placed on record, nor any loan agreement was ever executed. This is particularly important since the name of the first respondent was not mentioned in the resolution/authority letter. Additionally, the complainant (PW1) admitted that she personally does not know the loan transaction between the appellant and the first respondent. Her evidence is based on the record available with the appellant company. However, the record does not establish the alleged fact of the disbursement of the loan.

It is the claim of the appellant that the loan was granted to the first respondent and her husband upon their application. However, the complainant's sole witness (PW1) stated that the formalities about disbursing the loan were not followed in this case. The first Respondent's defence is that she had handed over a signed blank cheque to her husband, who gave it to the appellant company as they had assured him a loan of Rs. 1,00,000. The first Respondent stated all these facts on oath, and her evidence has been corroborated by the defence witness, Fakir Shaikh. Another defence witness, Rashida Fakir, claimed that she was the collection agent of the Appellant company and that the appellant company was in financial crisis in 1993 and thereafter. All these circumstances create doubt about issuing a cheque by the first Respondent against a legally enforceable debt.

The presumption under Section 139 of the NI Act is rebuttable. The benefit under this Section cannot be availed if the accused raises a plausible defence, which creates doubts about the existence of a legally enforceable debt or liability. To create such doubt, the accused can rely on the materials submitted by the complainant in order to raise such a defence, and it is conceivable that in some cases, the accused may not need to adduce evidence of his own.

In such a situation, the learned trial Court rightly found the accused/first respondent not guilty of the offence. Appeal dismissed.

Tags : ACQUITTAL DEBT EXISTENCE