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Section 138 : Issue of financial capacity of the complainant to give loan should be mentioned in the reply notice to the statutory notice

Citation : Tedhi Singh Versus Narayan Dass Mahant, Criminal Appeal No.362 Of 2022 (Arising Out Of Slp (Crl) No.1963 Of 2019)

Date of Judgment/Order : 7.3.2022

Court/Tribunal : The Supreme Court

Corum: K.M. Joseph; Hrishikesh Roy, JJ.

Background

The Accused/Appellant and the Complainant were known to each other. The Complainant alleged the a loan was Rs. 7 lakhs was given by him and the cheque issued by the Accused was dishonored. The  High Court dismissed the appeal against the order of the Sessions Judge by which the Court in turn affirmed the order passed by the Chief Judicial Magistrate, all of them finding the Accused guilty and had order simple imprisonment of 1 year with fine.

Judgment

Observing that the lower courts have not fully appreciated the defence of the accused and partially allowing the appeal held that the Trial Court and the First Appellate Court have noted that in the case under Section 138 of the N. I. Act the complainant need not show in the first instance that he had the capacity. The proceedings under Section 138 of the N. I. Act is not a civil suit. At the time, when the complainant gives his evidence, unless a case is set up in the reply notice to the statutory notice sent, that the complainant did not have the wherewithal, it cannot be expected of the complainant to initially lead evidence to show that he had the financial capacity. To that extent the Courts in our view were right in holding on those lines. However, the accused has the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence. 

As this was a case where three lower courts have concurred in their view, the Supreme Court also observed that this Court even exercising power under Article 136 of the Constitution may not refuse to interfere in a case where three Courts have gone completely wrong. The jurisdiction generated in an appeal under Article 136 is undoubtedly rare and extraordinary. Article 136 of the Constitution only confers a right to obtain special leave in rare and extraordinary cases. However, this is not to be understood as meaning that it is a clear case of even three Courts in unison falling into palpable error and thereby causing miscarriage of justice and yet this Court would not interfere.


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