2024 (6) TMI 435 - HC - Indian Laws

Dishonour of Cheque for insufficiency of funds - acquittal of accused u/s 255(1) Cr.P.C - failure to prove that the cheque was issued by the accused in discharge of any debt or liability - standard of proof required for rebutting the presumption - HELD THAT - The complainant, when examined as PW1, failed to give any satisfactory explanation for advancing a loan of Rs.2,60,000/- to the accused when amount is due as per Exhibit D2 agreement from the accused to the complainant. It is also pertinent to note that the amount due from the son of the accused to the complainant and his partner as per Exhibit D1 agreement dated 25.03.2002 and the amount shown in Exhibit P1 cheque are the same and in that circumstance, there are no reason to disagree with the finding of the trial court that the evidence of PW1 that he advanced a loan of Rs.2,60,000/- to the accused 3 months prior to 07.10.2002, is not at all reliable and that the case put forward by the accused is more probable. The Honourable Supreme Court considered the nature of the standard of proof required for rebutting the presumption under Section 139 of the Negotiable Instruments Act in M.S.Narayana Menon v. State of Kerala 2006 (7) TMI 576 - SUPREME COURT , and it was held that if some material is brought on record consistent with the innocence of the accused, which may reasonably be true, even though it is not positively proved to be true, the accused would be entitled to acquittal. It is well settled that the standard of proof which is required from the accused to rebut the statutory presumption under Sections 118 and 139 of NI Act is preponderance of probabilities and that the accused is not required to prove his case beyond reasonable doubt. The standard of proof, in order to rebut the statutory presumption, can be inferred from the materials on record and circumstantial evidence - in the absence of any satisfactory evidence to show that Exhibit P1 cheque was issued for discharging a legally enforceable debt from the side of the accused to the complainant, there are no reason to interfere with the finding of the trial court that the accused has succeeded in rebutting the statutory presumptions in favour of the complainant. Appeal dismissed.

Summary

Issues:
1. Dispute over dishonored cheque under Section 138 of the Negotiable Instruments Act, 1881.
2. Evaluation of evidence to determine guilt or innocence of the accused.
3. Burden of proof on the accused to rebut statutory presumptions.
4. Application of legal precedents in determining the standard of proof required.

Analysis:
The case involved an appeal against a judgment where the accused was found not guilty under Section 138 of the Negotiable Instruments Act, 1881, for dishonoring a cheque issued to the complainant. The complainant alleged that the accused borrowed money and issued a cheque that bounced due to insufficient funds. The trial court acquitted the accused based on the failure to prove the cheque was issued to discharge a debt. The appellant argued that the trial court misinterpreted key agreements and failed to consider their relevance. The court appointed an Amicus curiae, who supported the trial court's decision based on the evidence presented.

The complainant's credibility was questioned during cross-examination regarding the loan transaction and agreements involved. The accused claimed the cheque was misused and pointed to agreements showing a different transaction. The court noted inconsistencies in the complainant's statements and lack of evidence supporting the debt claim. The accused's defense, supported by documentary evidence, raised doubts about the complainant's version of events.

Legal precedents were cited to establish the standard of proof required for the accused to rebut statutory presumptions. The court emphasized that the accused need only show a preponderance of probabilities, not prove innocence beyond reasonable doubt. The burden of proof shifted to the complainant when the accused raised a probable defense. The court referred to previous judgments to illustrate the principles governing the burden of proof in cases involving dishonored cheques.

Ultimately, the court upheld the trial court's decision, stating that the evidence failed to establish a legally enforceable debt, leading to the accused successfully rebutting statutory presumptions. The court dismissed the appeal, emphasizing the importance of meeting the standard of proof required to rebut statutory presumptions under the Negotiable Instruments Act.