Facts: The complainant, Vijaykant Motilal Kothari, claimed that the accused, being close friends of Mr. Hirachand Pagaria, undertook to satisfy a hand loan of Rs. 56,50,000/- taken by Mr. Pagaria from the complainant. A cheque for Rs. 78,00,000/- was issued by Respondent No. 3 (Original Accused No. 2), which was later dishonored. The complainant alleged that the cheque was issued against repayment of the hand loan.
Procedural Posture: The Trial Court convicted the accused under Section 138 of the Negotiable Instruments Act, 1881. The accused appealed to the Additional Sessions Court, which allowed the appeal and set aside the trial court's judgment. The present appeal before the High Court challenges the acquittal order passed by the Sessions Court.
Issue: (1) Whether an offence under Section 138 of the Negotiable Instruments Act can be sustained in the absence of evidence that the cheque was issued in discharge of a liability of a third party. (2) Whether a partner/director can be prosecuted in the absence of specific averments in the complaint regarding their involvement in the commission of the offence and evidence of their participation in the firm's affairs.
Holding: The High Court dismissed the appeal, upholding the Sessions Court's acquittal of the accused.
Reasoning: The Court found that the complainant failed to prove that the accused had taken over the liability of Mr. Pagaria, as there was no document or record of such acceptance. The complainant could not explain the increase in the loan amount from Rs. 56,50,000/- to Rs. 78,00,000/-. The Court also noted the lack of privity of contract between the complainant and the accused. Furthermore, relying on Kamalkishore Shrigopal Taparia v. India Ener-Gen Private Limited & Anr. and N.K. Wahi v. Shekhar Singh, the Court emphasized that mere designation as a director or partner is insufficient for prosecution; specific roles and responsibilities must be established in the complaint. The Court concluded that the Sessions Court's acquittal did not suffer from patent perversity or misreading of evidence. The High Court reiterated the principles governing appeals against acquittal, emphasizing the double presumption of innocence and the need for the appellate court to find that the only possible conclusion from the evidence is the guilt of the accused.