2022 (1) TMI 498 - HC - Indian Laws

Dishonor of Cheque - preponderance of probabilities - legally enforceable debt or not - acquittal of the accused - rebuttal of presumption - Whether the judgment of the learned Sessions Judge in acquitting the accused from the offence under section 138 of the Negotiable Instruments Act basing on the materials available on record is fair and proper? - HELD THAT - The standard of rebuttal proof that need to be produced by the accuses is not necessarily strict proof beyond reasonable doubt. It is sufficient if the probabilities are proved through preponderance. Hence, the accused need not necessarily get into the box and subject himself for examination or produce any records of his own. And it is sufficient that he could bring out the improbable facts and circumstances from the case of the complainant. Because the object of punishment contemplated u/s 138 N.I. Act for dishonour of cheque is for improving the creditability of the Negotiable Instruments exchanged during commercial transactions and to ensure business viability and not the deterance of criminals. Though, it might be an exaggeration on the part of the accused to state that the complainant had stolen away her cheques when she came come to her house in order to see her sick husband, there are materials to probablise her defence that the impugned cheque was not supported by consideration and it was not given for discharging a legally enforceable liability or debt - A person, who already aggrieved due to non payment of a money-due by a debtor, would not dare to give an another enhanced loan to the same debtor and that too without any security. This is especially clear from the fact established by the defence through Ex.D2/receipt that after the sale transaction between the complainant and the accused, the accused did not owe any money to her . The appellate Court has evaluated the facts and circumstances and other materials available in this case and gave due weight to the preponderance of probabilities established by the defence. Since the case of the defence is more probable and strong enough to improbabilise the case of the complainant, it has chosen to reverse the judgement of the Trial Court - Appeal dismissed.

Issues Involved:
1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act.
2. Presumption under Sections 118 and 139 of the Negotiable Instruments Act.
3. Rebuttal of presumption by the accused.
4. Financial capability of the complainant to lend the alleged amount.
5. Evaluation of evidence and improbabilities in the complainant's case.

Issue-wise Detailed Analysis:

1. Legally enforceable debt under Section 138 of the Negotiable Instruments Act:
The case arose due to the dishonour of a cheque issued by the respondent/accused to the appellant/complainant. The complainant filed a private complaint under Section 138 of the Negotiable Instruments Act, alleging that the cheque was issued for a legally enforceable debt of ?25,00,000/-. The trial court found the accused guilty and sentenced her to one year of simple imprisonment and a fine of ?5,000/-. However, the appellate court reversed this decision, leading to the present appeal.

2. Presumption under Sections 118 and 139 of the Negotiable Instruments Act:
The complainant argued that the presumption under Sections 118 and 139 should be in their favour since the execution of the cheque was admitted by the accused. Section 118(a) presumes that every negotiable instrument was made for consideration, and Section 139 presumes that the cheque was received for discharging a debt or liability. The complainant contended that these presumptions were mandatory and should not have been dislodged by the appellate court.

3. Rebuttal of presumption by the accused:
The accused claimed that the cheque was not issued for any legally enforceable debt but was stolen by the complainant and misused. The accused also argued that the complainant lacked the financial capability to lend ?25,00,000/-. The appellate court found that the accused successfully rebutted the presumption by exposing improbabilities in the complainant's case. The accused presented evidence, including her account statement and the improbability of the complainant lending such a large sum without any security, to support her defense.

4. Financial capability of the complainant to lend the alleged amount:
The accused challenged the complainant's financial capability to lend ?25,00,000/-. The complainant failed to provide any proof of possessing such an amount during the relevant period. The appellate court noted that it was obligatory for the complainant to substantiate her financial potential once it was challenged. The failure to do so weakened the complainant's case and supported the accused's defense.

5. Evaluation of evidence and improbabilities in the complainant's case:
The appellate court evaluated the evidence and found several improbabilities in the complainant's case. It was noted that the complainant had previously received the entire sale consideration for a property transaction with the accused and had executed a receipt stating no further dues. The court found it improbable that the complainant would lend another ?25,00,000/- to the accused shortly after this transaction. Additionally, the accused provided evidence of a previous cheque for ?5,00,000/- being dishonoured, raising further doubts about the complainant's claim.

The appellate court concluded that the defense raised by the accused was more probable and strong enough to dislodge the presumption in the complainant's favor. The judgment of the trial court was reversed, and the accused was acquitted. The High Court upheld the appellate court's decision, finding no factual or legal infirmity in the judgment.

Conclusion:
The High Court dismissed the criminal appeal and upheld the judgment of the II Additional District and Sessions Court, Erode, which acquitted the accused. The court found that the accused successfully rebutted the presumption under Sections 118 and 139 of the Negotiable Instruments Act by exposing improbabilities in the complainant's case and challenging her financial capability to lend the alleged amount. The judgment emphasized the importance of evaluating the preponderance of probabilities and the defense's ability to create reasonable doubt about the existence of a legally enforceable debt.

← Previous Next →