The Andhra Pradesh High Court, in a recent decision delivered by Honourable Dr. Justice Venkata Jyothirmai Pratapa, dismissed a criminal appeal challenging the acquittal of the accused in a case under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as N.I. Act). The judgment provides a meticulous analysis of the evidentiary burden required to sustain a prosecution for cheque dishonour, emphasizing the necessity to prove the existence of a legally enforceable debt or liability.
The appellant, Vardhineedi Sri Ramanjaneyulu, filed a complaint against the respondent, Yeeda Sasibhushan, alleging dishonour of a cheque for Rs. 3,00,000 issued as repayment of a hand loan. The cheque dated September 5, 2007, drawn on ICICI Bank, Vijayawada, was returned unpaid due to insufficient funds. Following issuance of a legal notice on October 3, 2007, which the accused neither responded to nor satisfied, the complaint was filed under Section 138 of the N.I. Act.
At trial before the II Additional Junior Civil Judge-cum-I Additional Judicial Magistrate of First Class, Palakol, the accused was acquitted. The trial court found that the complainant failed to establish the existence of a legally enforceable debt, resulting in acquittal under Section 255(1) of the Criminal Procedure Code.
The appellant contended that the complainant discharged his initial burden by producing himself as witness and marking exhibits P.1 to P.6, including the cheque, bank memo, and legal notice. Learned counsel argued that the trial court erred in acquitting the accused despite this evidence.
In contrast, the Amicus Curiae supporting the accused highlighted critical deficiencies, pointing out the complaint's failure to specify the date and place of loan disbursal and the absence of proof regarding the complainant’s financial capacity to lend such an amount. Reliance was placed on the Supreme Court precedent in Basalingappa v. Mudibasappa, 2019, underscoring the necessity to establish a legally enforceable debt for prosecution under Section 138.
The High Court carefully examined the impugned judgment and the trial record, observing: "The date and place of borrowal of the said amount by the Accused from the Complainant have not been mentioned either in the complaint or in the chief examination affidavit of P.W.1."
Further scrutiny of P.W.1’s testimony revealed: "He clearly admitted that he maintains account books of his business and reflect all the transaction details therein. He further admitted that the account books do not show the present transaction."
The complainant also conceded: "He has no documents to show that he gave the said amount to the Accused" and "He does not know the contents of the Ex.P.5 legal notice."
In light of these admissions, the Court held: "In view of the contradictory statements of P.W.1 in his chief and cross examinations, and the ignorance of the contents of Ex.P.5 legal notice, it can be held that the Complainant had failed to establish the existence of legally enforceable debt between him and the Accused."
The Court also noted the absence of any evidence regarding the complainant's financial capacity to lend the stated sum.
On these grounds, the High Court affirmed the acquittal, stating: "In view of the above discussion, in the absence of the legally enforceable debt between the Complainant and the Accused, there is no reason to interfere with the judgment of the trial Court."
Accordingly, the appeal was dismissed, and all pending miscellaneous petitions were closed.
Case Title: Vardhineedi Sri Ramanjaneyulu v. Yeeda Sasibhushan & Anr.
Case no.: CRIMINAL APPEAL NO: 4/2023
Coram: Honourable Dr Justice Venkata Jyothirmai Pratapa
Advocate for the Petitioner: Adv. P L Narasimha Rao
Advocate for the Respondent: Adv. Arrabolu Sai Naveen, Amicus Curiae, Public Prosecutor (AP)
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