Himachal Pradesh High Court upheld acquittal in a Section 138 NI Act case, citing failure to prove complainant's financial capacity to advance loan.
HP HC Upholds Acquittal Under Section 138 NI Act Over Financial Capacity
The Himachal Pradesh High Court affirmed the acquittal of an accused in a Section 138 NI Act prosecution, holding that the complainant failed to establish financial capacity to extend the alleged loan amount.
The court noted that while issuance of a cheque triggers a presumption of consideration, the prosecution must still prove the existence of a legally enforceable debt. Crucially, the complainant did not produce bank statements, income records, or other evidence to demonstrate ability to fund the alleged transaction.
The statutory presumption under Section 139 does not absolve the complainant from proving foundational facts including financial capacity.
This decision underscores the need for rigorous evidentiary scrutiny in NI Act cases. Defences based on lack of financial capacity, if substantiated, can effectively rebut statutory presumptions and lead to acquittal.
