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2019 (1) TMI 447 - HC - Indian LawsDishonor of Cheque - insufficient funds - acquittal of the respondent in the complaint instituted by him - rebuttal of presumptions - Section 138 of the Negotiable Instruments Act - Held that - In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words proved and disproved have been defined in Section 3 of the Evidence Act - Applying the said definitions of proved or disproved to the principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the non-existence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon. In M.S. Narayana Menon alias Mani versus State of Kerala and another 2006 (7) TMI 576 - SUPREME COURT , the Hon ble Supreme Court while dealing with a case under Section 138 of the Act held that the presumption under Sections 118(a) and 139 were rebuttable and the standard of proof required for such rebuttal was preponderance of probability and not proof proved beyond reasonable doubt . It cannot be said that the Court below has not correctly appreciated the evidence on record or that acquittal of the respondent has resulted into travesty of justice. No ground for interference is called for - appeal dismissed.
Issues Involved:
1. Whether the trial court erred in acquitting the respondent under Section 138 of the Negotiable Instruments Act. 2. Whether the presumption under Sections 118(a) and 139 of the Negotiable Instruments Act was properly considered. 3. Whether the complainant had the locus standi to file the complaint. 4. Whether the appellate court should interfere with the trial court’s acquittal. Issue-wise Detailed Analysis: 1. Trial Court’s Acquittal under Section 138 of the Negotiable Instruments Act: The appellant, aggrieved by the acquittal of the respondent, contended that the trial court failed to consider the presumption attached to the negotiable instrument under Sections 118(a) and 139 of the Act. The trial court, after examining the evidence, found that the cheque issued by the respondent was dishonored due to insufficient funds. However, the trial court acquitted the respondent on the grounds that the complainant failed to prove that the cheque was issued in discharge of a legal liability. 2. Presumption under Sections 118(a) and 139 of the Negotiable Instruments Act: The judgment extensively discusses the presumptions under Sections 118(a) and 139, which state that a cheque is presumed to be issued for consideration and in discharge of any debt or liability unless proven otherwise. The Supreme Court precedents cited, including M.S. Narayana Menon vs. State of Kerala, K. Prakashan vs. P.K. Surenderan, and Rangappa vs. Sri Mohan, establish that these presumptions are rebuttable and the standard of proof for rebuttal is "preponderance of probability" rather than "beyond reasonable doubt." The trial court held that the respondent successfully rebutted the presumption by raising a probable defense, which the complainant failed to counter effectively. 3. Locus Standi of the Complainant: The complainant claimed to be the Manager of Vinay Service Station and alleged that the cheque was handed over to him by the respondent for diesel taken on credit. The court observed that if the diesel was indeed taken on credit from Vinay Service Station, then the legal liability was towards the service station and not the complainant personally. Therefore, the complaint should have been filed by Vinay Service Station, not by the complainant in his individual capacity. This finding significantly undermined the complainant's case. 4. Appellate Court’s Interference with Trial Court’s Acquittal: The appellate court emphasized that it would only interfere with the trial court’s judgment in cases of perversity of fact or law. The court referred to precedents like Banna Reddy vs. State of Karnataka and Rabindra Kumar Pal alias Dara Singh vs. Republic of India, which reinforce the presumption of innocence and the high threshold for overturning an acquittal. The appellate court found no such perversity in the trial court’s judgment and noted that the trial court correctly appreciated the evidence and the legal principles involved. Conclusion: The appellate court dismissed the appeal, upholding the trial court’s acquittal of the respondent. It concluded that the trial court correctly applied the legal principles regarding the presumption of consideration and the burden of proof. The complainant's lack of locus standi and the respondent's successful rebuttal of the presumption under Section 139 of the Act were pivotal in the decision. The court found no grounds for interference, and the respondent’s bail bonds were discharged.
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