Friendly Loan Without Valid Legal Obligation Cannot Sustain Cheque Bounce Prosecution Under NI Act: Jharkhand High Court

The Jharkhand High Court has delivered an important judgment clarifying that a friendly loan between known persons cannot automatically become a legally enforceable debt under Section 138 Negotiable Instruments Act, 1881 unless there is proper legal liability and reliable evidence. The Court dismissed an appeal filed against the acquittal of two accused persons in a cheque bounce case and upheld the earlier trial court judgment. Court Observation On Friendly Loan…