2022 (2) TMI 725 - HC - Indian Laws

Dishonor of Cheque - challenge to order of acquittal - preponderance of probabilities - impact of presumption as contemplated under Sections 118(a) and 139 of Negotiable Instruments Act - HELD THAT - On going through the materials available, it can be seen that, the specific case of the appellant is that, an amount of ₹ 3 lakhs was borrowed by the 1st respondent from him, on 02.01.2005. It is also his case that when the aforesaid amount was demanded back the 1 st respondent issued a cheque on 28.01.2005. Thus the specific case of the appellant is that the cheque in question which is bearing No.06361 was issued to the appellant by the 1 st respondent on 28.01.2005, in discharge of a liability created by 1 st respondent on 02.01.2005. Apart from the aforesaid cheque, there are no other materials to substantiate the transaction. Even though it is stated that the amounts were handed over by the appellant when the 1st respondent came to his residence at Kasargod, there are no witnesses to substantiate the same. The main contention raised of the learned counsel of the appellant is by placing reliance upon the presumption contemplated under Section 118(a) and 139 of Negotiable Instruments Act. It is true that the aforesaid Section 118(a) provides that unless contrary is proved it is to be presumed that a negotiable instrument has been made or drawn for consideration. Similarly, Section 139 provides that unless contrary is proved, the holder of the cheque received the cheque for discharge in whole or in part of debt or liability. However, the fact is that the presumptions contemplated under the aforesaid provisions are rebuttable. In order to rebut the presumption, the accused has to put forward a probable case and it is not at all necessary that it should be a case beyond reasonable doubt. It is a well settled position of law that the presumption can be treated as rebutted when the accused advances a probable case with evidence and the consideration for the same is not strict proof but only 'preponderance of probabilities' - there is overwhelming evidence in support of the case put forward by the 1st respondent. Right from the inception, he raised such a contention consistently and there are materials produced in support of the same. Therefore, it is evident that the presumption in favour of the appellant by virtue of Section 118(a) and Section 139 stands rebutted. The natural consequence of such rebuttal is that the burden to establish the offence allegedly committed by the 1st respondent is upon the shoulders of the appellant herein. When we consider the evidence on record in that perspective, it can be seen that, apart from the cheque there are no materials to substantiate the claim of the appellant. Even though he stated that, the amount was borrowed by the 1st respondent herein on 02.01.2005 and the cheque was issued in discharge of the said liability on 28.01.2005 no documents are there, to substantiate the same. It is evident from the documents produced by the 1st respondent that the said cheque was already entrusted with Joy Orathel and there are no evidence available on record as to how it reached in the possession of the appellant - no attempt has been made by the appellant to prove the transaction by adducing any evidence. In such circumstances, the conclusion arrived at by the learned Magistrate to the effect that the appellant failed to prove execution of the cheque is a sustainable view. The learned counsel for the appellant contended that, since the 1st respondent has admitted the signature, the presumption has to be drawn in his favour. It is true that the 1 st respondent has admitted the signature, but he never admitted that the said cheque was issued and handed over to the appellant herein. On the other hand, he has raised specific case that this cheque was handed over to one Joy Orathel in the year 1997 and the same was misused by the appellant, in connivance with the said Joy. In the light of the specific and consistent case amply proved by the 1st respondent through his deposition as DW1 and also with the help of Exts.D1 to D8, there are no scope for any interference. There are no material to rebut the presumptions which stand in favour of the 1st respondent herein - appeal dismissed.

Summary

Issues:
1. Appeal against order of acquittal under Section 138 of Negotiable Instruments Act.
2. Failure to establish guilt of the respondent.
3. Presumption under Sections 118(a) and 139 of Negotiable Instruments Act.
4. Burden of proof on the appellant.
5. Admissibility of signature vs. issuance of the cheque.
6. Guidelines for appellate court in appeals against acquittal.

Analysis:

1. The appellant filed an appeal challenging the order of acquittal in a case under Section 138 of the Negotiable Instruments Act. The complaint alleged that the respondent issued a cheque that was dishonored due to insufficient funds, leading to legal proceedings.

2. The appellant claimed that the respondent borrowed an amount and issued a cheque in return, which was dishonored. However, the respondent denied any transaction with the appellant, asserting that the cheques in question were given as security to another individual in a chitty transaction. The trial court acquitted the respondent due to lack of evidence.

3. The appellant argued that the trial court failed to consider the presumptions under Sections 118(a) and 139 of the Act. These sections create a presumption of consideration and discharge of debt when a negotiable instrument is involved. However, these presumptions are rebuttable.

4. The burden of proof shifted to the appellant after the respondent raised a probable case supported by evidence. The appellant failed to provide substantial evidence beyond the cheque to prove the transaction, while the respondent presented documents and testimony supporting his defense.

5. The appellant contended that since the respondent admitted the signature on the cheque, a presumption should be drawn in his favor. However, the respondent consistently maintained that the cheque was misused, casting doubt on its issuance to the appellant.

6. The judgment referenced legal guidelines from Chandrappa v. State of Karnataka regarding appellate review of acquittals. It highlighted the double presumption in favor of the accused post-acquittal and emphasized the need for appellate courts to respect trial court findings unless there are compelling reasons to overturn them. In this case, the court found no grounds to disturb the acquittal.

In conclusion, the appeal was dismissed, affirming the order of acquittal by the trial court. The judgment emphasized the importance of evidence, presumption, and burden of proof in cases involving negotiable instruments, ultimately upholding the principle of innocence until proven guilty.