2018 (10) TMI 1079 - HC - Indian Laws

Dishonor of Cheque due to insufficiency of funds - rebuttal of presumption - section 138 of NI Act - Held that - It is well settled that the statutory presumptions available under Section 118 and 139 of the Negotiable Instruments Act, 1881, can be discharged by the accused. Such presumption cannot be static. It can be discharged by bringing out probabilities - The probabilities always need not be by way of direct evidence - Even circumstantial evidence or even admission on the side of the complainant is sufficient to discharge the legal presumption. Mere denial by the accused of consideration or issuance of the cheque will not discharge the legal presumption. The evidence of P.W.1, when carefully seen, his entire evidence in cross-examination read together, the same indicates that there is no privity of contract between the accused and himself. In fact, he has shown ignorance about the nature of legal notice issued by the accused and himself. He appears to have totally ignorant of the facts. His entire evidence indicates that only his brother had some dealing with the accused - this Court does not find any material to hold that the complainant has proved his case. The complainant has not discharged his burden in establishing the passing of consideration - appeal dismissed.

Summary

Issues:
Acquittal in a cheque bounce case due to lack of proof beyond reasonable doubt.

Analysis:
The judgment pertains to an appeal against an acquittal in a cheque bounce case. The prosecution alleged that the accused borrowed a sum and issued a post-dated cheque that was dishonored. The complainant presented evidence, including the dishonored cheque and legal notices. The Trial Court acquitted the accused, prompting the appeal.

The appellant's counsel argued that the accused failed to rebut the legal presumption attached to the dishonored cheque. The counsel cited a Supreme Court judgment to support the contention that mere denial by the accused is insufficient to discharge the legal presumption. The burden of proof, as per Section 138 of the Negotiable Instruments Act, rests on the accused once the ingredients are established.

Conversely, the accused's counsel contended that there was no privity of contract between the parties. The accused claimed to have discharged the legal presumption by presenting circumstances, shifting the burden back to the complainant to prove consideration. The Trial Court's decision was supported, emphasizing the lack of evidence of passing consideration.

The High Court analyzed the evidence and arguments presented. It noted discrepancies in the complainant's testimony regarding the transaction and lack of privity of contract between the parties. The Court highlighted the improbability of advancing a substantial sum without documentation and found insufficient evidence to support the complainant's case.

Ultimately, the Court upheld the Trial Court's decision, emphasizing the complainant's failure to establish passing consideration and the accused's successful discharge of the legal presumption. The appeal was dismissed, affirming the acquittal of the accused in the cheque bounce case.