2020 (1) TMI 1702 - HC - Indian Laws

Dishonour of Cheque - existence of a legally enforceable debt or liability - rebuttal of presumption u/s 139 of NI Act - Acquittal of accused - HELD THAT - 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. 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. There are no fault with the judgment of the Trial Court. Appeal dismissed.

Summary

Issues:
- Whether the complainant proved the existence of a legally enforceable debt or liability under Section 138 of the Negotiable Instruments Act.
- Whether the accused successfully rebutted the presumption under Section 139 of the Act.
- Whether the principles laid down by the Supreme Court in Basalingappa V/s. Mudibasappa and Chandrappa & Ors. V/s. State of Karnataka were correctly applied.
- Whether the appellate court can interfere with an order of acquittal.

Analysis:

The appellant, who was the original complainant, filed a summary criminal case against the respondent for dishonoring a cheque under Section 138 of the Negotiable Instruments Act. The appellant claimed to have given a loan to the respondent, which was to be repaid by a certain date. However, the respondent failed to repay the amount on time, leading to the dishonor of the cheque. The Trial Court acquitted the accused, stating that the complainant failed to prove the existence of a legally enforceable debt or liability.

The defense argued that the accused did not know the complainant and that the cheque in question was part of a business transaction involving a third party. The defense claimed that the complainant and another witness colluded to deceive the accused. The defense also highlighted disputes between the accused and the witness who supported the complainant's case.

The judgment discussed the presumption under Section 139 of the Act, emphasizing that it is rebuttable, and the onus is on the accused to raise a probable defense. The court referred to the principles laid down by the Supreme Court regarding the burden of proof in such cases.

The court analyzed the evidence presented by both parties, noting discrepancies in the complainant's claims and lack of documentary evidence to support the loan transaction. The court highlighted contradictions in the testimonies of witnesses and the absence of crucial evidence to establish the debt or liability.

Referring to the Supreme Court's guidelines on appellate courts' powers in cases of acquittal, the court emphasized the double presumption in favor of the accused post-acquittal. The court concluded that the Trial Court's decision to acquit the accused was not illegal or improper and that there were no grounds to interfere with the order of acquittal.

Ultimately, the court dismissed the appeal, upholding the Trial Court's judgment of acquitting the accused based on the lack of proof of a legally enforceable debt or liability and the successful rebuttal of the presumption under Section 139 of the Act.