NEGOTIABLE INSTRUMENTS ACT, 1881

Section 138

Dishonour of cheque - Appeal against judgment of acquittal of borrower - Defence of capacity of lender to lend loan amount not raised by borrower - Whether Sessions Court erred in giving its own reason going beyond materials available on record for reversing judgment of Trial Court

Lender filed complaint under section 138 against borrower, as issuance of cheque for discharge of loan liability was dishonoured due to insufficient funds. The borrower raised objection that the cheque was issued only for security purpose. Trial Court passed order of conviction against the borrower. However, Sessions Judge passed judgment of acquittal of the borrower on the ground that the lender did not prove his capacity to lend huge loan amount to the borrower. Therefore, the lender filed an appeal against the judgment of acquittal of the borrower on the ground that defence of capacity to lend the loan amount was not raised by the borrower. Held: It is not the defence of the respondent that the appellant had no capacity to lend Rs. 2,25,000 to him. When such a defence was not taken by the respondent, it was impermissible for the appellate Court to give a finding to that effect for upsetting the judgment of the Trial Court. Further, in reply to legal notice, the borrower had not raised any objection of issuance of the cheque for security purpose. The Sessions Court has erred in giving its own reason going beyond the materials available on record for reversing the judgment of the Trial Court. Thus, the judgment of acquittal of the Sessions Court was set aside and the order of conviction passed the Trial Court was restored.

REFERRED :

FAVOUR : In favour of appellant

A.Y. :

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