{"id":348521,"date":"2025-05-22T11:00:44","date_gmt":"2025-05-22T05:30:44","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=348521"},"modified":"2025-05-23T22:05:23","modified_gmt":"2025-05-23T16:35:23","slug":"andhra-pradesh-high-court-upholds-acquittal-no-enforceable-debt-section-138-ni-act-legal-news","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/05\/22\/andhra-pradesh-high-court-upholds-acquittal-no-enforceable-debt-section-138-ni-act-legal-news\/","title":{"rendered":"Andhra Pradesh High Court upholds acquittal in Section 138 NI Act Case as no legally enforceable debt found on loan of \u20b93 lakhs"},"content":{"rendered":"
\n

Andhra Pradesh High Court:<\/span> A criminal appeal was filed challenging the judgment dated 09-11-2022 passed by the II Additional Junior Civil Judge-cum-I Additional Judicial Magistrate of First Class, Palakol whereby the accused was acquitted of the offence punishable under Section 138<\/a> of the Negotiable Instruments Act, 1881<\/a> on the ground that the Trial Court erred in concluding that the accused did not owe a legally enforceable debt. Venkata Jyothirmai Pratapa, J., dismissed the appeal being devoid of merits and upheld the acquittal order.<\/p>\n

According to the complainant, the accused had borrowed a sum of \u20b93,00,000 from him as a hand loan. Upon several demands for repayment, the accused issued a cheque bearing No. 693337 dated 05-09-2007 for \u20b93,00,000, drawn on ICICI Bank, Vijayawada. The complainant presented the said cheque for encashment at his banker, State Bank of Hyderabad, Palakol branch. However, the cheque was returned unpaid due to insufficient funds in the accused’s account, as evidenced by the return memo dated 11-09-2017.<\/p>\n

Subsequently, the complainant issued a statutory legal notice to the accused on 03-10-2007, demanding payment of the cheque amount. Despite receipt of the notice, the accused neither responded nor made payment. Consequently, the complainant initiated a complaint under Section 138<\/a> of the Negotiable Instruments Act<\/a>, alleging dishonour of cheque and failure to pay despite legal notice.<\/p>\n

During the trial, the complainant examined himself as P.W.1 and marked Exs. P.1 to P.6 in support of his case. Notably, the defence did not lead to any oral or documentary evidence. After evaluating the evidence on record and hearing both parties, the Magistrate acquitted the accused by holding that the complainant had failed to establish the existence of a legally enforceable debt, an essential element for attracting liability under Section 138<\/a> of the NI Act<\/a>.<\/p>\n

Counsel for the appellant\/complainant contended that the Trial Court had erroneously acquitted the accused despite the complainant having discharged his initial burden through oral testimony and documentary evidence. He asserted that the Trial Court had overlooked the presumption available under Sections 118<\/a> and 139<\/a> of the NI Act<\/a> and prayed for setting aside the acquittal. On the other hand, Amicus Curiae for the accused opposed the appeal by pointing out the lack of proof regarding a legally enforceable debt. He argued that the complaint failed to mention the date of the alleged loan transaction and that the complainant had not produced any material to prove his financial capacity to lend \u20b93,00,000. He relied on the decision of the Hon’ble Supreme Court in Basalingappa v. Mudibasappa<\/span>, (2019) 5 SCC 418<\/a>, to support the requirement of proving the existence of a legally enforceable debt or liability.<\/p>\n

Upon scrutiny of the Trial Court’s judgment and the evidence on record, the Court noted that the acquittal was premised on the complainant’s failure to prove the existence of a legally enforceable debt. Specifically, it was observed that neither the complaint nor the chief examination of P.W.1 mentioned the date and place of the loan transaction. In cross-examination, P.W.1 admitted that although he maintained business account books recording all transactions, the alleged transaction with the accused was not reflected therein. Furthermore, P.W.1 admitted that he had no documentation to evidence the loan and could not even confirm the contents of the legal notice marked as Ex. P.5.<\/p>\n

Significantly, P.W.1 failed to produce any material showing that he possessed \u20b93,00,000 on the date of the purported loan, casting serious doubt on his financial capacity to lend such an amount. These admissions, coupled with the absence of corroborative documents, led the Court to conclude that the presumption under Section 139<\/a> of the NI Act<\/a> stood rebutted. The Court found no error in the Trial Court’s reasoning and concluded that the complainant had indeed failed to establish a legally enforceable debt, which is a sine qua non for convicting an accused under Section 138<\/a> of the NI Act<\/a>.<\/p>\n

The Court upheld the Trial Court’s finding that the complainant did not establish the core requirement of a legally enforceable debt. Consequently, it declined to interfere with the acquittal order.<\/p>\n

[Vardhineedi Sri Ramanjaneyulu v. Yeeda Sasibhushan, 2025 SCC OnLine AP 1801<\/a>, decided on 09-04-2025<\/span>]<\/p>\n\n

Advocates who appeared in this case:<\/p>\n

Counsel for the appellant:<\/span> P. L. Narasimha Rao<\/p>\n

Counsel for the respondent(s):<\/span> Arrabolu Sai Naveen and Amicus Curiae<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The dispute arose from a \u20b93 lakh loan allegedly given by the complainant to the accused. The cheque issued for repayment bounced due to insufficient funds.<\/p>\n","protected":false},"author":67516,"featured_media":315000,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[77074,77130,77305,82396,82395,82397,82394],"class_list":["post-348521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-andhrapradeshhighcourt","tag-chequebouncecase","tag-debtrecovery","tag-legallyenforceabledebt","tag-loandispute","tag-niactacquittal","tag-section-138niact"],"yoast_head":"\nAPHC: No Enforceable Debt Found in \u20b93 Lakh Loan Case under Section 138 NI Act| SCC Times<\/title>\n<meta name=\"description\" content=\"Andhra Pradesh High Court upholds acquittal in a Section 138 Negotiable Instruments Act case, citing failure to prove a legally enforceable debt on a 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Shriram, J., dismissed a criminal appeal filed against the order of the trial court whereby it had acquitted the accused of charges under Section 138\u00a0(dishonour of cheque)\u00a0of the Negotiable Instruments Act, 1881. As per the complainant, she had given a loan of Rs 4.5 lakhs to the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":250568,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/07\/01\/drawers-signature-differs\/","url_meta":{"origin":348521,"position":2},"title":"Madras HC | Cheque returned with endorsement “drawers signature differs”. If complainant fails to prove accused was not stranger, can he still be prosecuted under S. 138 NI Act? Court answers","author":"Bhumika Indulia","date":"July 1, 2021","format":false,"excerpt":"Madras High Court: P. Velmurugan, J., addressed a matter revolving around the offence under Section 138 of the Negotiable Instruments Act. A complaint was filed for an alleged offence under Section 138 of the Negotiable Instruments Act, 1881. Judicial Magistrate found the respondent guilty of offence under Section 138 NI\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":364043,"url":"https:\/\/www.scconline.com\/blog\/post\/2025\/10\/16\/rajasthan-hc-section-138-ni-act-on-cheque-for-time-barred-debt-revives-enforceability-under-contract-act\/","url_meta":{"origin":348521,"position":3},"title":"Cheque for Time-Barred Debt Revives Enforceability Under S. 25(3) Contract Act; Dishonour attracts Section 138 NI Act: Rajasthan High Court","author":"Editor","date":"October 16, 2025","format":false,"excerpt":"\u201cA meaningful reading of Sections 20, 118 and 139 of the NI Act makes it clear that a person who signs a cheque and delivers it to the payee remains liable unless he successfully rebuts the statutory presumptions.\u201d","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Section 138 NI Act on Cheque for Time-Barred Debt","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2025\/10\/Section-138-NI-Act-on-Cheque-for-Time-Barred-Debt.webp?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":240707,"url":"https:\/\/www.scconline.com\/blog\/post\/2020\/12\/15\/bom-hc-does-ni-act-authorises-a-complaintant-to-fill-an-incomplete-cheque-court-discusses-while-reversing-acquittal-of-accused-under-s-138-ni-act\/","url_meta":{"origin":348521,"position":4},"title":"Bom HC | Does NI Act authorises a complainant to fill an incomplete cheque? Court discusses while reversing acquittal of accused under S. 138 NI Act","author":"Bhumika Indulia","date":"December 15, 2020","format":false,"excerpt":"Bombay High Court:\u00a0Vibha Kankanwadi, J., reversed the acquittal of the respondent-accused holding him guilty of having committed an offence under Section 138 (dishonour of cheque) of the Negotiable Instruments Act, 1881. Facts on record The complainant had come with a case wherein he stated he had friendly relations with the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2016\/09\/Bombay-HC.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":208618,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/01\/23\/mad-hc-presumption-under-s-139-ni-act-in-favour-of-holder-cheque-arises-once-its-execution-is-admitted-by-accused\/","url_meta":{"origin":348521,"position":5},"title":"Madras HC | Presumption under S. 139 NI Act in favour of holder of cheque arises once its execution is admitted by accused","author":"Bhumika Indulia","date":"January 23, 2019","format":false,"excerpt":"Madras High Court:\u00a0The Bench of P. Velmurugan J. convicted the accused under Section 138 of the Negotiable Instruments Act, 1881 (for dishonour of cheque) and sentenced him to undergo 6 months simple imprisonment and imposed a fine of Rs 1,50,000 to be paid to the complainant. The complainant and the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/348521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/67516"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=348521"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/348521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/315000"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=348521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=348521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=348521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}