2021 (11) TMI 987 - HC - Indian Laws

Dishonor of Cheque - insufficiency of funds - acquittal of the accused - rebuttal of presumption - preponderance of probability - legally enforceable debt or not - defence case is that cheque was issued as a security to another transaction - HELD THAT - It is settled that there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden. The accused need to substantiate his case based on preponderance of probabilities. The accused in this case was successful in discharging the burden by cross-examining PW1, by examining DW1 and producing Exts.D1 to D4 and also by proving probabilities in his favour and non-probabilities against the complainant. The evidence on record would clearly show that the fact is not as presumed. Therefore, the presumption under Sections 118(a) and 138 of the NI Act is over. Thus, it can be safely concluded that having regard to the facts and circumstances of the case and preponderance of probabilities, the rebuttal evidence adduced by the accused is acceptable. In the case of acquittal, there is double presumption in favour of the accused. An order of acquittal cannot be interfered with as matter of course. An order of acquittal can only be interfered with when there are compelling and substantial reasons for doing so. Only in exceptional cases where there are compelling circumstances and the judgment in appeal is found to be perverse, the appellate court can interfere with the order of acquittal. Appeal dismissed.

Summary

Issues:
Appeal against acquittal under section 378(4) of Cr.P.C. in ST No. 3896/2003 regarding an offence under section 138 of the Negotiable Instruments Act.

Analysis:

1. The complaint alleged that the accused, a friend of the complainant, borrowed ?50,000 promising to repay within a week, issued a check which bounced, and failed to heed a payment demand. The lower court acquitted the accused, finding the complainant failed to prove the check was issued for a legally enforceable debt. The complainant appealed, arguing the accused's defense was not credible, citing precedents supporting his case.

2. The Negotiable Instruments Act establishes presumptions regarding consideration and discharge of debt through a check. Section 139 presumption is rebuttable, shifting the burden to the accused to prove no debt existed. The complainant claimed the accused borrowed money and issued the check, while the accused contended the check was security for a different transaction. Evidence and circumstances determine if the presumption is rebutted.

3. The accused's defense was that the check was security for a transaction between others, not related to the complainant. Discrepancies in witness testimonies and documentary evidence raised doubts. The complainant's witness could not provide crucial details, and an agreement supported the accused's version. The defense's evidence was consistent and not discredited under cross-examination.

4. Precedents highlighted the importance of specific circumstances in determining the validity of the check issuance. The defense successfully showed the check was not related to the complainant's alleged loan, rebutting the presumption under Sections 118(a) and 138 of the NI Act. The burden of proof was met through evidence and probabilities favoring the accused.

5. In cases of acquittal, there is a double presumption in favor of the accused, and interference requires compelling reasons. The appellate court should not reverse an acquittal if two views are possible. In this case, the evidence and circumstances supported the lower court's decision to acquit the accused. The appeal was dismissed, upholding the order of acquittal.

In conclusion, the judgment analyzed the evidence, legal presumptions, and precedents to determine the validity of the check issuance and the accused's defense. The court found the accused successfully rebutted the presumption under the NI Act, leading to acquittal. The appeal was dismissed, respecting the double presumption in favor of the accused and the lack of compelling reasons to interfere with the lower court's decision.