Proof of loan transaction required in cheque dishonour case: HC

NT Correspondent

Bengaluru: Even when cheques have been dishonoured, the proof of having the money to provide the alleged loan has to be shown by the complainant, the High Court has said.

It upheld the acquittal of a person who was accused of taking a loan from the complainant and giving cheques for payment which were dishonoured.

“In the present case, PW.1 (complainant) contended that she had money with her, generated from various sources namely the death benefit of her husband, accident claims etc., but no relevant documents have been produced to substantiate the loan transaction. Mere contending that she had lent the amount to the accused is not sufficient unless she produces the relevant documents,” the HC said.

The complainant, Pavithra, from Mysuru, alleged that she had given a loan of Rs.8 lakh to her aunt Sheela V.

When she demanded repayment, Sheela gave her two cheques in 2014, one for Rs.5 lakh and the other for Rs.3 lakh. The two cheques were however returned for “insufficient funds,” by the bank.

She filed two separate complaints before the Magistrate court. Sheela was convicted in both cases after which she approached the Appellate Court. The Appellate Court however set aside the conviction and acquitted her.

Challenging the acquittal, Pavithra approached the HC with two criminal petitions in 2018. The HC gave a common judgement on both the petitions recently.

The counsel for the accused argued that the cheques were given as a security for chit transactions between the parties and were not related to any loan. It was contended that there was no loan transaction and Pavithra did not have the money to give such a loan.

The HC agreed with these contentions. “When the contention of the complainant fails in respect of the loan transaction, the contention of the accused that the cheques were issued for security through the chit transaction certainly prevails,” Justice S Rachaiah said in his judgement.

The conflicting statements of Pavithra were also considered by the HC. It noted that “In the crossexamination, it appears that she had issued a loan on two different occasions.

She further admitted that the amount of Rs.3.00 lakhs was lent at the first instance and thereafter, Rs.5.00 lakhs was paid. However, it is contrary to the stand taken in the legal notice and in the examination-in-chief.

This contradiction has been construed as material contradiction and the complainant has failed to prove the loan transaction.”

The HC upheld the acquittal of the accused and dismissed the two appeals filed by Pavithra. (CrlA 511/2018)