Himachal Pradesh High Court Upholds Acquittal in Cheque Bounce Case

Complainant Fails to Prove Proprietorship of Firm, Court Finds No Legally Enforceable Debt

In a significant judgment, the Himachal Pradesh High Court dismissed an appeal challenging the acquittal of Raj Kumar, accused of an offence under Section 138 of the Negotiable Instruments Act, 1881. The judgment, delivered by Justice Rakesh Kainthla, upheld the decision of the Judicial Magistrate First Class, Court No. 2, Ghumarwin, which found the complainant, Ashwani Kumar, failed to establish his proprietorship of M/s Baba Enterprises, the entity in whose name the cheque was issued.

The case arose from a complaint by Ashwani Kumar, alleging that Raj Kumar borrowed Rs. 80,000 as a family loan, promising repayment within a month. Kumar issued a cheque to discharge his liability, which was dishonoured due to a change in the firm's account title. The trial court, however, acquitted Kumar, citing a lack of evidence connecting Ashwani Kumar to Baba Enterprises, thus questioning his locus standi to file the complaint.

In the appeal, Ashwani Kumar contended that the trial court overlooked the presumption attached to the cheque and his affidavit asserting ownership of Baba Enterprises. His counsel argued that this claim went unchallenged during cross-examination. However, the High Court found no documentary evidence supporting the complainant's claim of proprietorship, aligning with precedents that mere assertions without proof are insufficient to establish legal standing in cheque bounce cases.

Furthermore, the High Court noted that the alleged debt was time-barred, as the loan was taken four years prior to the complaint, surpassing the three-year limitation period for debt recovery. Citing previous judgments, the court emphasized that a cheque issued for a time-barred debt does not constitute a legally enforceable obligation.

Justice Kainthla reiterated the Supreme Court's stance on interference with acquittal judgments, stating that such intervention is warranted only if the trial court's decision is patently perverse or results in a manifest miscarriage of justice. Finding no such grounds, the High Court dismissed the appeal, affirming the trial court's reasonable view.

The court also directed Raj Kumar to furnish bail bonds in compliance with Section 437A of the Code of Criminal Procedure, ensuring his appearance before the Supreme Court if a special leave petition is filed.

Bottom Line:

A complaint under Section 138 of the Negotiable Instruments Act, 1881, cannot be maintained if the complainant fails to prove that they are the proprietor or payee of the entity in whose name the cheque was issued.

Statutory provision(s): Negotiable Instruments Act, 1881, Section 138; Criminal Procedure Code, 1973, Sections 378, 386, 437A; Bhartiya Nagarik Suraksha Sanhita, 2023, Section 481

Ashwani Kumar v. Raj Kumar, (Himachal Pradesh) : Law Finder Doc Id # 2821541