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2019 (1) TMI 514 - HC - Indian Laws


Issues Involved:
1. Dismissal of complaint under Section 138 of the Negotiable Instruments Act.
2. Contradictions in the evidence regarding the number of apple cartons sold and carriage charges.
3. Legal presumption under Sections 118(a) and 139 of the Negotiable Instruments Act.
4. Rebuttal of presumption by the accused.
5. Standard of proof required for rebutting the presumption.

Detailed Analysis:

1. Dismissal of Complaint under Section 138 of the Negotiable Instruments Act:
The appellant, an orchardist and owner of an apple forwarding agency, filed a complaint under Section 138 of the Negotiable Instruments Act after the respondent’s cheque for ?5,38,856/- was dishonored due to insufficient funds. The trial Magistrate dismissed the complaint, concluding that the cheque amount exceeded the amount allegedly due, thus it was not drawn towards the discharge of any debt or liability.

2. Contradictions in the Evidence:
The appellant presented conflicting evidence regarding the number of apple cartons sold and the carriage charges. Initially, the complaint stated 5000 cartons were sold, but during cross-examination, the appellant mentioned 7000-8000 cartons. CW-3, a witness, stated only 2600 cartons were carried. Additionally, the complaint mentioned carriage charges of ?30 per box, while cross-examination revealed charges of ?15 per box in 2011. These contradictions led the trial Magistrate to doubt the appellant’s claims.

3. Legal Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act:
Sections 118(a) and 139 create a presumption that every negotiable instrument was made for consideration and for the discharge of debt or liability. This presumption is rebuttable. The Supreme Court has held that the standard of proof for rebutting this presumption is the preponderance of probability, not proof beyond a reasonable doubt.

4. Rebuttal of Presumption by the Accused:
The accused can rebut the presumption by raising a probable defense. In this case, the respondent successfully rebutted the presumption by highlighting contradictions in the appellant’s evidence. The Supreme Court in various cases, including M.S. Narayana Menon and Rangappa, has emphasized that the accused must show the non-existence of consideration to be reasonably probable.

5. Standard of Proof Required for Rebutting the Presumption:
The standard of proof for the accused is preponderance of probabilities. The accused need not conclusively prove their defense but must show that the consideration's existence is improbable or doubtful. The trial Magistrate found that the respondent had probabilized his defense, shifting the onus back to the appellant, who failed to prove the existence of consideration.

Conclusion:
The High Court upheld the trial Magistrate’s decision, finding no merit in the appeal due to the appellant's failure to provide consistent and reliable evidence. The contradictions in the appellant’s testimony and the inability to prove the consideration led to the dismissal of the complaint. The appeal was dismissed, and the pending application was disposed of accordingly.

 

 

 

 

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