The Supreme Court recently confirmed the acquittal of a defendant in a 16-year-old case involving a bounced cheque. The decision was based on the failure of the complainant to demonstrate the existence of a legally enforceable debt owed by the defendant.

“On the question as to whether the sum involved in the cheques was advanced in discharge of a legally enforceable debt or not, the petitioner has failed to show if any sum was advanced towards financial assistance. The High Court found that the debt/liability, in discharge of which, according to the petitioner, the cheques were issued, did not reflect in the petitioner's balance-sheet.”, the Bench comprising Justices Aniruddha Bose and Sanjay Kumar observed.

The case revolves around the initiation of cheque dishonor proceedings against the accused. The complainant/petitioner argued that the accused issued the cheque to settle a legally binding debt owed to them. Consequently, the presumption outlined in Section 118 read with Section 139 of the Negotiable Instruments Act, 1881, places the burden on the accused to refute this presumption.

Disputing the complainant's assertion, the accused countered by denying the existence of any legally binding debt owed to the complainant. The accused claimed that the funds transferred to her bank account by the complainant were intended for stock market trading, facilitated through the accused's bank account to maintain discretion from the complainant's family members regarding their involvement in the stock market.

The trial court's conviction of the accused was overturned to acquittal by the First Appellate Court, a decision subsequently upheld by the High Court. Dissatisfied with the High Court's ruling to acquit the accused, the complainant sought recourse by filing a Special Leave Petition under Article 136 of the Constitution to appeal the decision before the Supreme Court.

Initially, the court determined that the accused successfully refuted the presumption against her by presenting a credible defense regarding the purpose for which the funds from the complainant were deposited into her account.

The court clarified that intervention by the Supreme Court under Article 136 would not be justified when the contested conclusions are not unreasonable or founded on insufficient evidence.

The court concluded that there was no manifest injustice in the decisions of the High Court and the First Appellate Court to warrant intervention under Article 136, as both courts meticulously scrutinized the evidence presented against the complainant/petitioner.

Accordingly, the Special Leave Petition was dismissed.

Counsels representing the petitioner(s) include Mr. Raju Ramchandran, Senior Advocate; Mrs. Aparajita Singh, Senior Advocate; Mr. Amit Kumar Singh, Advocate; and Mr. Avnish Pandey, Advocate on Record.

Counsels representing the respondent(s) are Mr. S. Nagamuthu, Senior Advocate; Mr. Mohit D. Ram, Advocate on Record; Ms. Monisha Handa, Advocate; Mr. Rajul Shrivastav, Advocate; Mr. Anubhav Sharma, Advocate; Mr. Bhagirath N. Patel, Advocate; Ms. Mantika Haryani, Advocate; Ms. Muskan Surana, Advocate; and Ms. Astha Sharma, Advocate on Record.

Case Title: M/S RAJCO STEEL ENTERPRISES VERSUS KAVITA SARAFF & ANR.

Click here to read the Judgement