2019 (1) TMI 1699 - HC - Indian Laws

Dishonor of Cheque - offences punishable under Section 138 of the Negotiable Instruments Act 1881 - legally enforceable debt or other liability - rebuttal of presumption - section 139 of NI Act - HELD THAT - Under Section 138 of the said Act where any cheque drawn by a person on an account maintained by him is drawn in favour of another person for the discharge in whole or in part of any debt or other liability is returned by the bank unpaid the said person shall be punished with imprisonment for a term which may be extended to two years or with fine which may extend to twice the amount of the cheque or with both. Explanation to Section 138 provides For the purposes of this section debt or other liability means a legally enforceable debt or other liability . The key word is legally enforceable debt or other liability - Section 139 of the said Act provides for presumption in favour of holder and it says it shall be presumed unless the contrary is proved that the holder of a cheque received the cheque for the discharge in whole or in part of any debt or other liability. It is settled law that this presumption is rebuttable and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities and not beyond reasonable doubt. To rebut the presumption it is open for the accused to rely on evidence led by him or accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. It is not necessary for the accused to come in the witness box in support of his defence because Section 139 imposed an evidentiary burden and not a persuasive burden. Admittedly there are disputes between the parties. The accused has raised a probable defence that complainant has not proved that there was legally enforceable debt or liability. There is an acquittal and therefore there is double presumption in favour of accused. Firstly the presumption of innocence available to accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is proved guilty by a competent court of law. Secondly accused having secured acquittal the presumption of his innocence is further reinforced reaffirmed and strengthened by the Trial Court. For acquitting accused the Trial Court observed that the prosecution had failed to prove its case. The opinion of the Trial Court cannot be held to be illegal or improper or contrary to law. The order of acquittal cannot be interfered with - Appeal dismissed.

Summary

Issues:
Appeal against acquittal under Section 138 of the Negotiable Instruments Act, 1881.

Analysis:
1. The appellant appealed against an order acquitting the respondent of offences under Section 138 of the Negotiable Instruments Act, 1881, related to a dishonored cheque. The appellant claimed that the respondent issued a cheque for Rs. 32 lakhs, which was dishonored, leading to the legal proceedings. The respondent denied liability, stating that the cheque did not bear his signature and that he did not issue it. The appellant presented evidence, including witness testimony and bank records, to establish the guilt of the accused.

2. Section 138 of the Act stipulates punishment for dishonoring a cheque issued to discharge a debt or liability. Section 139 provides a presumption in favor of the holder of the cheque unless the contrary is proved. The accused must raise a probable defense to rebut this presumption, with the standard of proof being preponderance of probabilities. The accused did not provide evidence to show that the signature on the cheque was not his usual one, but the appellant's evidence was also insufficient to conclusively prove the accused's guilt.

3. The court highlighted that the appellant failed to prove that the cheque was created by the accused or under his instructions. The absence of evidence regarding the origin of the Rs. 32 lakhs figure and the lack of documentary support weakened the appellant's case. Disputes between the parties further clouded the matter, leading to doubts about the existence of a legally enforceable debt or liability.

4. Referring to legal principles from the case law, the court emphasized that in appeals against acquittals, the appellate court has the power to review and reconsider the evidence but must respect the double presumption in favor of the accused. The presumption of innocence and the reinforcement of innocence through acquittal create a high threshold for overturning an acquittal. The court found no fault with the trial court's judgment and dismissed the appeal, upholding the order of acquittal.

In conclusion, the court upheld the acquittal of the respondent, emphasizing the high standard required to overturn an acquittal and the lack of conclusive evidence to establish the accused's guilt under Section 138 of the Negotiable Instruments Act.