Himachal Pradesh HC Dismisses Appeal in ₹10 Lakh Cheque Bounce Case: Upholds Acquittal [Read Order]

The appellant had alleged that the respondent issued a cheque for ₹10,00,000 in discharge of a legally enforceable debt. The cheque was dishonoured due to insufficient funds, following which a statutory notice was issued. However, the trial court had dismissed the complaint, observing that the complainant failed to prove the existence of a legal liability and his financial capacity to lend such a large amount.

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Challenging the trial court’s judgment dated 14.08.2024, the complainant-appellant contended that the court erred in disregarding the presumption under Sections 118(a) and 139 of the NI Act, which arise once the issuance of cheque is admitted. It was submitted that the respondent never denied signing the cheque, and yet failed to rebut the statutory presumption.

It was also argued that the trial court placed undue emphasis on the complainant’s inability to explain his income and bank account balance, despite consistent testimony regarding the loans given over time for personal reasons.

The respondent, on the other hand, submitted that the trial court had taken a reasonable and possible view in light of the evidence, and that the High Court should not interfere with an acquittal unless there is a clear error of law or perversity in appreciation of evidence.

The High Court, after considering the submissions and record, held that the complainant’s version was doubtful and unsupported by documentary evidence. The judgment noted that while the cheque was indeed dishonoured, the complainant could not establish the dates or reasons for advancing the alleged loan, nor show proof of sufficient financial means to lend ₹10,00,000.

The Court observed that the complainant, who claimed to earn ₹30,000–₹35,000 per month as a priest, had no income tax returns to substantiate his earnings and had admitted that the alleged loan amount was equivalent to five years of his total savings.

The High Court cited Supreme Court precedents including Basalingappa v. Mudibasappa and Dattatraya v. Sharanappa, to assure that the presumption under the NI Act is rebuttable, and if the complainant’s financial capacity is seriously disputed and not credibly explained, the defence raises a probable doubt.

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It further observed that the complainant failed to give consistent and credible testimony regarding when and how the money was lent. The version presented in the affidavit did not align with earlier complaints, and discrepancies in the bank statement raised doubts about the transaction.

The High Court bench, consisting of Judge Rakesh Kainthla, held that the trial court’s view could not be said to be unreasonable. As two possible views were available based on the evidence, the High Court declined to interfere, citing the settled principle that appellate courts should not overturn acquittals unless there is a gross miscarriage of justice. As a result, the appeal was dismissed, and the respondent's acquittal was upheld.

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