The Court of Judge Small Causes in Srinagar has acquitted the accused, Mohammad Ashraf Mir, in a case involving the dishonor of cheques issued under the Negotiable Instruments Act, 1881. The judgment, delivered by Judge Ms. Tabasum, found that the complainant, Mohammad Sidiq Beigh, failed to prove the existence of a legally enforceable debt.
The case, instituted on September 20, 2018, involved a dispute over seven cheques amounting to ₹35 lakhs, issued by the accused to the complainant. The cheques were dishonored due to insufficient funds. The complainant alleged that the cheques were issued as part of a failed property transaction, wherein the accused and his associates fraudulently claimed authority over a property and failed to deliver possession or execute the necessary documents.
However, the accused contended that the cheques were issued as a security measure and not as repayment of a debt. The court found merit in this argument, citing the lack of substantial evidence to prove the complainant’s claims of a binding sale agreement and an enforceable financial obligation.
The court emphasized the legal precedent that the mere issuance of a cheque does not automatically translate to liability under Section 138 of the NI Act unless it is proven that the cheque was issued to discharge a legally enforceable debt. The accused successfully rebutted the presumption of liability by providing bank statements and testimonies demonstrating the lack of an outstanding debt.
This ruling underscores the necessity for complainants to provide concrete evidence of debt in cases involving the dishonor of cheques, highlighting the judicial scrutiny applied to such financial disputes.
Case Details
| Case Title | Mohammad Sidiq Beigh v. Mohammad Ashraf Mir |
|---|---|
| Judges | Ms. Tabasum (JO CODE: JK00173) |
| Lawyers | Complainant: Adv. Hakim Rais, Accused: Adv. Khalid Nazir Banday |
| Date of Order | June 28, 2024 |
Table of Key Legal Points and Findings
| Key Legal Points | Findings |
|---|---|
| Issuance of Cheques | Accused admitted issuing cheques but stated they were for security, not discharge of debt |
| Dishonor of Cheques | Cheques were dishonored due to insufficient funds |
| Legally Enforceable Debt | Complainant failed to prove existence of a legally enforceable debt |
| Rebuttal of Presumption Under NI Act | Accused successfully rebutted the presumption of liability by providing evidence |
| Judicial Precedent Cited | Reference to various SC judgments emphasizing the need for proving enforceable debt |
Timeline of Events in the Case
| Date | Event |
|---|---|
| 20.09.2018 | Case instituted |
| 24.07.2018 | Cheques presented and dishonored |
| 20.08.2018 | Demand notice served to the accused |
| 29.07.2021 | Statement of the accused recorded |
| 15.04.2023 | Statement of the accused under Section 342 Cr.PC recorded |
| 28.06.2024 | Court acquits the accused |
