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TMI Blog2022 (1) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... st respondent had issued a stop memo in respect of a cheque in question. The issuance of cheque even according to the appellant is almost a year after the said date. When all these aspects are taken into consideration, the execution of the cheque itself is in doubt. Even if it is assumed for argument for the sake that, the aforesaid cheque was indeed issued by the 1st respondent, even then the evidence adduced by the appellant would indicate a probable case which will have the impact of rebutting the presumption available under Section 139 of the Negotiable Instruments Act - if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. In this case, the factual situation pointed out by the appellant contains several discrepancies mentioned above which is sufficient to raise a probable defence so as to create doubts as to the existence of legally enforceable debt or liability. The discrepancies mentioned, cannot be treated as immaterial or insignificant. Even if the evidence as a whole is taken into consideration, it contains several loop-holes or lacuna in the case advanced by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds part payment of the said amount, ₹ 2 lakhs was paid in the year, 2008 by keeping a balance amount of ₹ 1.5 lakhs. It was pointed out that the appellant had arranged an amount of ₹ 3.5 lakhs by borrowing the said amount from his sister-in-law's fixed deposit in the co-operative bank for which he had to pay the monthly interest at the rate of ₹ 4,000/-. Later, the appellant was compelled to discharge the liability of the sister-in-law by raising loan from others by paying high interest. In such circumstances, the 1st respondent being aware of the manner in which the appellant raised the funds to pay an amount of ₹ 3.5 lakhs, the 1st respondent agreed to repay an amount of ₹ 3 lakhs, apart from ₹ 2 lakhs already given to the appellant, towards final settlement (₹ 1.5 lakhs towards the balance amount existing in the actual liability and the remaining ₹ 1.5 lakhs towards compensation for the additional expenses incurred by the appellant in raising the amount). Later, on 15.6.2011, a cheque was issued by the 1st respondent for an amount of ₹ 3 lakhs. However, upon presentation of the same for collection through his banke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Instruments Act are rebuttable presumptions. It is suffice for the accused to establish a probable case against the said presumption and upon establishing such a probable case, the burden of proof shifts to the complainant. In this case, it was pointed out that, the specific case of the 1st respondent is that, he has not issued any cheque in favour of the appellant. In the year, 2007, he lost certain cheques and therefore he submitted stop memo in respect of the said lost cheques on 24.5.2010 which is discernible from Ext. C2. Exhibit P1 cheque is claimed to have been issued on 16.5.2011 which is almost a year after the stop memo was issued. The learned counsel for the 1st respondent also relies on the evidence on DW1, the Manager of the Bank who has stated that, the stop memo was issued by the 1st respondent on the reason that cheques were lost. In such circumstances, no presumption is available to the appellant herein. Apart from the above, it was also contended that, the case set up by the appellant is full of inconsistencies which are clearly evident from the depositions of PW1 itself. In such circumstances, the learned counsel for the 1st respondent sought for dismissal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the office of FCI West Hill, Kozhikode where the appellant and the 1st respondent worked together. The evidence of DW1 would indicate that the stop memo was issued by the 1st respondent as evidenced by Ext. C2 on the reason that the cheque leaves were lost. 10. Apart from the above, there are certain improbabilities in the case of the appellant as well, which would fortify the defence taken by the 1st respondent. Even according to the appellant, the actual amount due from the 1st respondent is ₹ 1.5 lakhs. The remaining amount of ₹ 1.5 lakhs was fixed as the compensation for the additional expenses incurred by the appellant for arranging the amount of 3.5 lakhs for making the payment to the 1st respondent for his son. According to the appellant, the said amount was arranged by him by borrowing the same from the fixed deposit in the name of his sister-in-law. He had to pay interest at the rate of ₹ 4,000/- per month for clearing the said liability. However, there is absolutely no evidence forthcoming for substantiating the additional expense claimed to have been incurred in the manner mentioned above. Further, during the cross-examination, PW1 has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minal remedy in relation to the dishonour of cheques, the rebuttable presumption under S. 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by S. 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard or proof. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under S. 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heque was lost by him in the year 2007 while he was working at FCI, Kozhikode. It is an admitted fact that, at the relevant time, the appellant was also working there. The evidence of DW1 coupled with Ext. C2 document would reveal that as early as on 24.5.2010, the 1st respondent had issued a stop memo in respect of a cheque in question. The issuance of cheque even according to the appellant is almost a year after the said date. When all these aspects are taken into consideration, the execution of the cheque itself is in doubt. 13. Even if it is assumed for argument for the sake that, the aforesaid cheque was indeed issued by the 1st respondent, even then the evidence adduced by the appellant would indicate a probable case which will have the impact of rebutting the presumption available under Section 139 of the Negotiable Instruments Act. In Rangappa's case (supra), in the observation as extracted above, the Hon'ble Supreme Court categorically held that when an accused has to rebut the presumption under S. 139, the standard of proof for doing so is that of 'preponderance of probabilities'. Therefore, if the accused is able to raise a probable defence which creates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ross examination. But none of such superior officers who were part of the said settlement talks were examined. It is also stated that such settlement talk was in the year 2009 whereas the cheque is seen issued in the year 2011. Further, the said cheque is claimed to have been issued by the 1st respondent all of a sudden when the 1st respondent voluntarily came to the FCI, West Hill office and handed over the same to the appellant. None of the persons who were claimed to have interfered for persuading the 1st respondent to arrive at a settlement are not seen examined. When all these aspects are taken into consideration, the case of the appellant is highly improbable and hence the interference in the findings of the learned Magistrate is unwarranted. In Chandrappa and Others v. State of Karnataka [ (2007)4 SCC 415], the Hon'ble Supreme Court observed as follows: "41(4). An appellate Court, however, must bear in mind that in case of acquittal, there is double presumption in favour of the accused. Firstly, the presumption of innocence available to him under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless he is pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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