sECTION
138 OF nEGOTIOABLE iNSTRUMENTS aCT: Acquittal BASED ON REBUTTAL AND sustained
in appeal
Principles
of presumption, rebuttal, shifting of onus and reverse onus during trial
In a recent judgment of
Supreme Court, reported as Sri Dattatraya vs Sharanappa 2024 INSC 586, the
very basis of ascertaining liability, presumption as encapsulated u/s 139 of NI
Act, element of rebuttal, shifting of onus and reverse onus on the complainant
and accused have been dealt with at length and thus nuances of trial of section
138 of NI Act complaint have been dealt with thoroughly in the above matter.
The details in this regard shall be narrated further. However, to begin with
the provision of Section 138 of the NI Act may be read as under for further
deliberation:
Section 138 of
the NI Act 1881 is reproduced below as:
“138.
Dishonour of cheque for insufficiency, etc., of funds in the account-
Where
any cheque drawn by a person on an account maintained by him with a banker for
payment of any amount of money to another person from out of that account for
the discharge, in whole or in part, of any debt or other liability, is returned
by the bank unpaid, either because of the amount of money standing to the
credit of that account is insufficient to honour the cheque or that it exceeds
the amount arranged to be paid from that account by an agreement made with that
bank, such person shall be deemed to have committed an offence and shall,
without prejudice to any other provision of this Act, be punished with
imprisonment for a term which may be extended to two years’, or with fine which
may extend to twice the amount of the cheque, or with both:
Provided
that nothing contained in this section shall apply unless—
(a)
the cheque has been presented to the bank within a period of six months from
the date on which it is drawn or within the period of its validity, whichever
is earlier;
(b)
the payee or the holder in due course of the cheque, as the case may be, makes
a demand for the payment of the said amount of money by giving a notice; in
writing, to the drawer of the cheque, within thirty days of the receipt of
information by him from the bank regarding the return of the cheque as unpaid;
and
(c)
the drawer of such cheque fails to make the payment of the said amount of money
to the payee or, as the case may be, to the holder in due course of the cheque,
within fifteen days of the receipt of the said notice.
Explanation.—For
the purposes of this section, “debt of other liability” means a legally
enforceable debt or other liability.”
The
Supreme Court in ICDS Ltd. v. Beena Shabeer and Another (2002) 6
SCC 426 has held that proceedings under Section 138 of the Negotiable
Instruments Act 1881 can be initiated even if the cheque was originally issued
as security and was subsequently dishonoured owing to insufficient funds. The
failure to honour the concerned cheque is per se deemed as a commission of an
offence under Section 138 of the NI Act 1881.
The
Negotiable Instruments Act enlists three essential conditions
that ought to be fulfilled before the said provision of law can be invoked:
(i)
The cheque ought to have been presented within the period of its validity.
(ii)
The demand of payment ought to have been made by the presenter of the cheque to
the issuer, and lastly,
(iii)
the drawer ought to have had failed to pay the amount within a period of 15
days of the receipt of the demand.
The
aforesaid principles and pre-requisites stand well established through a
judgment in Sadanandan Bhadran Vs Madhavan Sunil Kumar (1998) 6 SCC 514.
The limitation of 30 days, begins from a period when the cause of action arose
prescribed by the statute in Section 142 (b) of the
Negotiable Instruments Act 1881 to initiate proceedings under Section
138 of the NI Act 1881.
The
Supreme Court has further expounded that the issuance of cheque towards a
liability, the presentation of the cheque within the prescribed period, its
return on account of dishonour, notice to the accused, and failure to pay
within 15 days thereof, stand as sine qua non for an offence
under Section 138 of the Negotiable Instruments Act 1881 as per the above
decision in K. Bhaskaran Vs Sankaran Vaidhyan Balan and Anr (1999) 7 SCC 510. The same was
subsequently reiterated in numerous judgments of the Supreme Court as well as
that of the High Courts.
PARALLELS
BETWEEN SECTION 118 & SECTION 139 OF NI ACT
In
the light of the object as encapsulated in the Amendment to Chapter VIII, of
Negotiable Instruments Act,1881 (In short “NI Act”), the Parliament by virtue
of inserting Section 143 of the NI Act 1881 had prescribed procedure of
summary trial enlisted in provisions of Sections 260 to 265 of the CrPC
1973 and it was to be adopted during proceedings under Section 138 of the
NI Act 1881. In practise it can be observed that the court adopts a liberal
approach with regard to attendance of an accused person and until an accused’s
presence is indispensable, exemption from appearance is granted to the accused,
in case of exigencies. It is also observed that in the very first instance, in
case of absence of accused, issuance of a non- bailable warrant is avoided.
Presumption
under Section 139 of Negotiable Instruments Act 1881 (as amended and up to
date) is a rebuttable one. Whether the financial capacity of the complainant to
grant a loan, the same has to be discharged by him, and if the complainant is unable
to do so, it may be presumed that a loan transaction had not taken place.
Chapter
XIII of the NI Act 1881, of which Section 118 is
a part, lays down special rules for evidence to be adduced within the scheme of
the Act herein. As the text of the said provision showcases, it raises a
rebuttable presumption as against the drawer to the extent that the concerned
negotiable instrument was drawn and subsequently accepted, indorsed,
negotiated, or transferred for an existing consideration, and the date so
designated on such an instrument is the date when the concerned negotiable
instrument was drawn. It is also further presumed that the same was transferred
before its maturity and that the order in which multiple indorsements appear on
such an instrument, that is the deemed order thereon. Lastly, the holder of a
negotiable instrument is one in its due course, subject to a situation
where the concerned instrument while being obtained from a lawful owner and
from his or her lawful custody thereof through undertaking of an offence as
contemplated under any statute or through the means of fraud, the burden to
prove him or her being a holder in due course, instead, lies upon such a
holder.
As
the presumption contemplated by virtue of Section 118 of the NI Act
1881 entails, Section 139 was similarly introduced to provide for a
presumption that the holder of cheque had received the concerned issued cheque
towards discharging of the liability of the drawer, either in whole or in part.
Therefore, at this juncture, it is ideal to make a reference to Section
118 of the NI Act 1881, which is reproduced as:
“118.
Presumptions as to negotiable instruments Until the contrary is proved, the
following presumptions shall be made:—
(a)
of consideration:—
that
every negotiable instrument was made or drawn for consideration, and that every
such instrument, when it has been accepted, indorsed, negotiated or
transferred, was accepted, indorsed, negotiated or transferred for
consideration;
(b)
as to date:—
that
every negotiable instrument bearing a date was made or drawn on such date;
(c)
as to time of acceptance:—
that
every accepted bill of exchange was accepted within a reasonable time after its
date and before its maturity;
(d)
as to time of transfer: —
that
every transfer of a negotiable instrument was made before its maturity;
(e)
as to order of indorsements:—
that
the indorsements appearing upon a negotiable instrument were made in the order
in which they appear then on;
(f)
as to stamp:—
that
a lost promissory note, bill of exchange or cheque was duly stamped;
(g)
that holder is a holder in due course:—
that
the holder of a negotiable instrument is a holder in due course: provided that,
where the instrument has been obtained from its lawful owner, or from any
person in lawful custody thereof, by means of an offence or fraud, or has been
obtained from the maker or acceptor thereof by means of an offence or fraud, or
for unlawful consideration, the burden of proving that the holder is a holder
in due course lies upon him.
The
provision of Section 139 of the NI Act 1881 is reproduced herein
below:
“139.
Presumption in favour of holder—
It
shall be presumed, unless the contrary is proved, that the holder of a cheque
received the cheque of the nature referred to in Section 138 for the
discharge, in whole or in part, of any debt or other liability.”
It
is thus implicit that the trial for an offence under Section 138 of
the NI Act 1881 to presume that the cheque in question was issued by the drawer
or accused for the discharge of a particular liability. It may also be observed
that the expression “shall presume” shall initially accord presumption
and a threshold in favour of complainant i.e holder of cheque and the onus
shall shift on the accused to present evidence for the purpose of rebutting the
said presumption so as to again shift the onus back on the complainant.
PRINCIPLES
OF
REBUTTAL-Onus and reverse onus
Furthermore,
the effect of such presumption is that a foothold of presumption is inbuilt upon filing of the complaint along
with relevant documents, thus, prima facie the complainant shall be able
to establish the case against the drawer, and instantly thereafter, the onus of
proof shifts on the drawer or accused and by virtue of adducing cogent material
and evidence the accused may be able to rebut the said presumption, based on
the principles of preponderance of probabilities as held in Laxmi Dyechem
Vs State of Gujarat & Ors (2012)
13 SCC 375.
While
the offence envisaged under Section 138 of the NI Act 1881 as a regulatory
offence and largely being civil in nature and generally its impact remains confined
to private parties within commercial transactions. The 3 bench judgment of
Supreme Court in a matter reported as Rangappa (supra)
highlighted Section 139 of the NI Act 1881 to be an example of a reverse
onus clause. The concept has been expounded by Court, taking note of the
intent of legislature that can be culled out from the peculiar placing of act
of dishonour of cheque in a statute having criminal overtones, though also
clothing it in civil. Obviously, this is done to enhance credibility of
negotiable instruments. Additionally, the reverse onus clause serves as
an indispensable “device to prevent undue delay in the course of
litigation”. While acknowledging the test of proportionality and having
laid the interpretation of Section 139 of the NI Act 1881 hereof, it was
further held that an accused cannot be obligated to rebut the said presumption
through an unduly high standard of proof. This is in light of the
observations laid down by a co-ordinate Bench of Supreme Court in Hiten
P Dalal Vs batindranath Banerjee, (2001) 6 SCC 16 whereby it was clarified that the
rebuttal ought not to be undertaken conclusively by an accused, which is
reiterated as follows:
“23. In other words, provided the
facts required to form the basis of a presumption of law exist, no discretion
is left with the court but to draw the statutory conclusion, but this does not
preclude the person against whom the presumption is drawn from rebutting it and
proving the contrary. A fact is said to be proved when, ‘after considering the
matters before it, the court either believes it to exist, or considers its
existence so probable that a prudent man ought, under the circumstances of the
particular case, to act upon the supposition that it exists’
In
Rangappa (Supra) the principles are enunciated as under:
14. In light of these extracts,
we are in agreement with the respondent-claimant that the presumption mandated
by Section 139 of the Act does indeed include the existence of a legally
enforceable debt or liability. To that extent, the impugned observations in
Krishna Janardhan Bhat (supra) 20 may not be correct. However, this does not in
any way cast doubt on the correctness of the decision in that case since it was
based on the specific facts and circumstances therein. As noted in the
citations, this is of course in the nature of a rebuttable presumption and it
is open to the accused to raise a defence wherein the existence of a legally
enforceable debt or liability can be contested. However, there can be no doubt
that there is an initial presumption which favours the complainant.
Section 139 of the Act is an
example of a reverse onus clause that has been included in furtherance of the
legislative objective of improving the credibility of negotiable instruments.
While Section 138 of the Act
specifies a strong criminal remedy in relation to the dishonour of cheques, the
rebuttable presumption under Section 139 is a device to prevent undue delay in
the course of litigation. However, it must be remembered that the offence made
punishable by Section 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 21 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 Section 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 accused can rely on the materials submitted by the
complainant in order to raise such a defence and it is conceivable that in some
cases the accused may not need to adduce evidence of his/her own.
No
doubt, the rebuttal does not have to be conclusively established but such
evidence must be adduced before the court in support of the defence that the
court must either believe the defence to exist or consider its existence to be
reasonably probable, the standard of reasonability being that of the ‘prudent
man’.” Therefore, it may be said that the liability of the defence in cases
under Section 138 of the NI Act 1881 is not that of proving its case
beyond reasonable doubt.
Recently
in the decision reported as Rajesh Jain Vs Ajay Singh (2023) 10 SCC 148,
an accused may establish non-existence of a debt or liability either through
conclusive evidence that the concerned cheque was not issued towards the
presumed debt or liability, or through adduction of circumstantial evidence
vide standard of preponderance of probabilities. It is held as under:
“22. Since a presumption only
enables the holder to show a prima facie case, it can only survive before a
court of law subject to contrary not having been proved to the effect that a
cheque or negotiable instrument was not issued for a consideration or for
discharge of any existing or future debt or liability. In this backdrop,
it is pertinent to make a reference to a decision of 3-Judge Bench in Bir
Singh Vs Mukesh Kumar (2019) 4 SCC 197, which went on to hold that if a
signature on a blank cheque stands admitted to having been inscribed
voluntarily, it is sufficient to trigger a presumption under Section 139 of
the NI Act 1881, even if there is no admission to the effect of execution of
entire contents in the cheque”.
23. It is therefore apposite to
make a reference to the provision of Section 140 of the NI Act 1881,
which ruminates mens rea to be immaterial while dealing with proceedings
under Section 138 of the NI Act 1881. The said legislative wisdom of
the Parliament which is imbibed in the bare text of the provision is reproduced
as below:
140.
Defence which may not be allowed in any prosecution under Section 138—
“It shall not be a defence in a
prosecution for an offence under Section 138 that the drawer had no
reason to believe when he issued the cheque that the cheque may be dishonoured
on presentment for the reasons stated in that section.”
Through
the legal fiction adopted by the legislature vide Amendment Act of 1988 to
the NI Act 1881 it has barred the drawer of a cheque, which was
dishonoured, to take a defence that at the time of issuance of the cheque in
question he or she had no reason to believe that the same will be dishonoured
upon being presented by the holder of such a cheque, especially and
specifically for the reasons underlined in Section 138 of the NI Act
1881.
SECTION 118 & 139 & a deEmed fiction
We
may notice by a comprehensive reference to the Sections of the NI Act 1881
that gives birth to a deemed fiction which was also articulated by the
Supreme Court in K.N Beena Vs Muniyappan & Anr (2001) 8 SCC 458 as
follows:
“Under Section 118, unless
the contrary was proved, it is to be presumed that the negotiable instrument
(including a cheque) had been made or drawn for consideration. Under Section
139 the court has to presume, unless the contrary was proved, that the
holder of the cheque received the cheque for discharge, in whole or in part, of
a debt or liability. Thus, in complaints under Section 138, the court has
to presume that the cheque had been issued for a debtor’s liability. This
presumption is rebuttable. However, the burden of proving that a cheque had not
been issued for a debt or liability is on the accused. The Supreme Court in the
case of Hiten P Dalal (Supra) has also taken an identical
view.”
ADDUCING EVIDENCE
How
successfully evidence could be adduced for rebutting statutory presumption, it
is worthwhile to read the judgments of Supreme Court in Rangappa Vs Srimohan
(2010) 11 SCC 441
and Rajesh Jain (supra) which entails that accused shall be
entitled to place reliance on the materials adduced by the complainant, i.e not
only the complainant’s version in the original complaint, but also the case in
the legal or demand notice, complainant’s case at the trial, as also the plea
of the accused in the reply notice. Even statement of accused u/s 313 CrPC or
the circumstances under which the promissory note or cheque was executed may
also be highlighted during trial. The accused may not be required to adduce any
further or new evidence from his end in said circumstances to rebut the
concerned statutory presumption. However, the accused may, if so desired lead
defence evidence and in addition thereto, can examine himself, if felt
expedient.
If
principles of trial are to be reckoned then, there is no gainsaying that although,
the accused shall have to discharge the burden of rebutting the presumption
that existed in favour of the complainant as per the trap of section 139 of
Negotiable Instruments Act, still, the degree of burden on the accused to rebut
the presumption shall remain confined to the extent of preponderance of
probability. No doubt, to cross the said threshold, accused has to show
something tangible which prima facie should be sufficient to shift the onus
back on complainant. If that is not done, then rebuttal shall be inadequate. Significantly,
mere denial would not fulfil the requirements of rebuttal as envisaged
under Section 118 and 139 of the NI Act and the same shall not result into
rebuttal of presumption raised against him, when tested on the touchstone of
preponderance of probability. Further, it has been held in Rajesh
Aggarwal Vs State 2010 SCC OnLine Del 2511 that:
"9. .....There is no
presumption that even if an accused fails to bring out his defence, he is still
to be considered innocent. If an accused has a defence against dishonour of the
cheque in question, it is he alone who knows the defence and responsibility of
spelling out this defence to the court and then proving this defences is on the
accused....."
The
Supreme Court of India in Sripati Singh Vs State of Jharkhand and Anr 2021
SCC OnLine SC 1002 has held that:
"17.
A cheque issued as security pursuant to a financial transaction cannot be
considered as a worthless piece of paper under every circumstance. 'Security'
in its true sense is the state of being safe and the security given for a loan
is something given as a pledge of payment. It is given, deposited or pledged to
make certain the fulfilment of an obligation to which the parties to the
transaction are bound. If in a transaction, a loan is advanced and the borrower
agrees to repay the amount in a specified timeframe and issues a cheque as
security to secure such repayment; if the loan amount is not repaid in any
other form before the due date or if there is no other understanding or
agreement between the parties to defer the payment of amount, the cheque which
is issued as security would mature for presentation and the drawee of the
cheque would be entitled to present the same. On such presentation, if the same
is dishonoured, the consequences contemplated under Section 138 and
the other provisions of NI Act would flow."
Further,
the Hon'ble High Court of Delhi in Credential Leasing & Credits
Ltd Vs Shruti Investments 2015
SCC OnLine Del 10061 has held that even a security
cheque can form the basis of complaint under Section 138 of the NI
Act, if on the date of the deposit of the post-dated security cheque, the debt
of the accused stood crystallized.
Blank Cheque with signature of drawer
The
Hon'ble Supreme Court in Bir Singh (Supra) has also held
that-
"34.
If a signed blank cheque is voluntarily presented to a payee, towards some
payment, the payee may fill up the amount and other particulars. This in itself
would not invalidate the cheque. The onus would still be on the accused to
prove that the cheque was not in discharge of a debt or liability by adducing
evidence."
Furthermore, Section
20 of the NI Act, 1881 also gives holder of a negotiable instrument authority
to fill the
same. Same reads as under:
Section 20:
Inchoate stamped instruments:
Where
one person signs and delivers to another a paper stamped in accordance with the
law relating to negotiable instruments then in force in India, and either
wholly blank or having written thereon an incomplete negotiable instrument, he
thereby gives prima facie authority to the holder thereof to make or complete,
as the case may be, upon it a negotiable instrument, for any amount specified
therein and not exceeding the amount covered by the stamp. The person so
signing shall be liable upon such instrument, in the capacity in which he
signed the same, to any holder in due course for such amount:
Provided
that no person other than a holder in due course shall recover from the person
delivering the instrument anything in excess of the amount intended by him to
be paid thereunder.
It
clearly provides, therefore, that even if the signed blank cheque was handed
over to the complainant and if other particulars are filled by the complainant,
the complainant shall not be precluded from raising complaint u/s 138 of NI
Act. In other words, signature on the instrument is enough to launch
prosecution and to entail presumption.
SUCCESSFUL
REBUTTAL
It
will be apt to refer to a recent judgment of Delhi High Court reported as (2025)
ibclaw.in 1997 HC and captioned as Mohd. Irshad v. Partap Singh (Crl.A.688/2025).
The reference is made with endorsement of finding by ld trial court while
acquitting the accused owing to the failure of the complainant in rebuttal by
the accused and on reverse onus shifting on the complainant, the version of the
complainant is found contradictory and not worthy of trust.
It
was observed by the High Court in Mohd. Irshad v. Partap Singh (Supra) as
under:
9. The Ld. M.M. in his detailed
judgment dated 31.01.2019 observed that the Appellant/Complainant had admitted
in his cross-examination that he was working for and on behalf of Ambition
Engineers, a sole proprietorship of one Mahinderpal Singh and that at times he
placed the Orders on behalf of this proprietorship Firm and at times in his own
name. The Ld. MM observed that there was no proper authorization from the Firm
in favour of the Appellant/Complainant to file the Complaint. It was held that
the Complaint was liable to be rejected, on this ground itself.
10. It was further observed that
the Complainant admitted in his cross-examination that the amounts were paid
various instalments, but there is no evidence of these amounts received by the
Respondent. He was an Income Tax Assessee, but the ITR record has not been
placed showing the business dealings. It was difficult to accept that the
Complainant would have parted with Rs.4,20,000/-, which is not a small amount,
without it being reflected in the ITR. It was therefore, held that the defence
of the Respondent that he had not given the Cheque stood probablized and
thereby the Ld. M.M. acquitted the Respondent.
The
Delhi High Court in Mohd Irshad (Supra) while referring to the finding
recorded by the ld trial court has held as under in the following paragraphs:
22.
The defence of the Respondent was fully established by DW1, Rajesh Kumar, Axis
Bank, Bhiwadi who produced a record of the Bank which consisted of seven system
generated report of ‘Stop Payment’ of the Cheques which got lost on 26.12.2011.
23.
The Ld. Trial Court has thus, rightly acquitted the Respondent vide a
well-reasoned detailed judgment.
27.
The first aspect which has emerged from his cross-examination is that he had
placed the Order with the Respondent/Accused under the name of the Firm M/s.
Ambition Engineers, of which Mahinderpal Singh is the proprietor. It clearly
reflects that aside from Mahinderpal Singh being his friend, there was no
business connection between them. Neither he was authorized nor did he produce
evidence to show that he had been authorized by Mahinderpal Singh on behalf of
his proprietorship Firm, to place the Order with the Respondent/Accused.
28.
The Ld. M.M. has rightly observed that the Appellant/Complainant had no proper
authorization for filing the Complaint on behalf of the proprietor of M/s
Ambition Engineers on whose behalf allegedly the Appellant/Complainant had
placed the Order. If so was the situation, the Appellant/Complainant could not
have filed the Petition in his own individual name but should have been in the
name of the proprietorship Firm. If the order was placed in the name of the
Firm, the aggrieved Party was the Firm and not the Petitioner who had no
authorization to file the Complaint. It has been correctly observed by the Ld.
M.M. that the Complaint has not been filed in the name of the right person and
that the Appellant/Complainant, Mohd. Irshad had no right or authorization to
file the Complaint in the name of M/s Ambition Engineers. On this ground itself
the Petition has been rightly held to be not maintainable.
29.
The second aspect which emerges from the testimony of the Complainant/CW1 is
that firstly, the Order for supply of goods worth Rs.8,00,00/- had been placed
orally. There is no evidence whatsoever to prove that any such order was placed
to the Respondent/Accused. Secondly, it is asserted by him that he has made
part payment of Rs.4,20,000/- in advance and the balance amount of
Rs.3,80,000/- was to be given at the time of delivery of the goods.
Pertinently, Rs.4,20,000/- is not a small amount and the Appellant/Complainant
is absolutely silent about when, how and in what manner this amount was given
to the Respondent/Accused. There is no proof whatsoever either of supply of
goods worth Rs.8,00,000/- or of the part payment of Rs.4,20,000/- to the
Respondent/Accused.
It
was emerged from cross-examination of the complainant that he had placed the
Order with the Respondent/Accused under the name of the Firm M/s. Ambition
Engineers, of which Mahinderpal Singh is the proprietor. There was no business
connection disclosed between them. In evidence it could not be disclosed that
that he was authorized and no evidence was produced to show he had been
authorized by Mahinderpal Singh on behalf of his proprietorship Firm, to place
the Order with the Respondent/Accused.
Finally,
it was held by the Delhi High Court in Mohd Irshad (Supra) that
in the above backdrop, the vital facts could not be proved, such as when the
goods were being delivered and as to why would the Appellant/Complainant
continue to make payment of different amounts in instalments. The defence
testimony was also found to be doubtful. Hence, the order of acquittal recorded
by the trial court found favour from the high court and it was held that
initial presumption available to the complainant u/s 139 of Negotiable
Instruments Act was successfully rebutted and reverse onus on complainant in
the backdrop of rebuttal could not be negated.
Navigating the facts to bring out contradictions
In
the factual matrix of the Sri Dattatraya (Supra), contradictions in the complaint preferred by
the complainant and the statement in cross examination contained material
contradictions such as on the one hand, while
the Appellant claimed the cheque to have been issued at the time of advancing
of the loan as a security, however, as per his statement during the cross-
examination it was revealed that the same was presented when an alleged demand
for repayment of alleged loan amount was raised before the Respondent, after a
period of six months of advancement. Even further, the complainant could not
showcase as to when the said loan was advanced in favour of the accused. It was
also not explained as to why a cheque issued by the accused landed in the hands
of the instant holder, that is, the Appellant.
No
doubt, the signature on the
cheque was that of complainant stood
established and a presumption is to ideally arise. However, the Appellant/complainant
had to prove the details of the loan advanced which was not forthcoming and
contradictory statements on the top of that shall not ipso facto support the
initial presumption to the effect of giving rise to the statutory
presumption under Section 139 of the NI Act 1881. The Respondent/accused
thus could shift the weight of the scales of justice in his favour through the
preponderance of probabilities.
The
Trial Court had rightly observed that the Appellant was not able to plead even
a valid existence of a legally recoverable debt as the very issuance of cheque
is dubious based on the fallacies and contradictions in the evidence adduced by
the parties. It also appears that the respondent had inscribed his signature on
the agreement drawn on a white paper and not on a stamp paper as presented
by the complainant had cast another set of doubt in the case. It is evident
that in the present case, the accused was been able to cast a shadow of doubt
on the case presented by the complainant/ Appellant, and therefore has successfully
rebutted the presumption stipulated by Section 139 of the NI Act
1881.
On
the basis of aforesaid discussion, the Supreme Court has culled out the
following broad principles:
i) Criminal jurisprudence
emphasises on the fundamental essence of liberty and presumption of innocence
unless proven guilty. This presumption gets emboldened by virtue of concurrent
findings of acquittal. Therefore, this court must be extra-cautious while
dealing with a challenge against acquittal as the said presumption gets
reinforced by virtue of a well-reasoned favourable outcome. Consequently, the
onus on the prosecution side becomes more burdensome pursuant to the said
double presumption.
ii) In case of concurrent
findings of acquittal, this Court would ordinarily not interfere with such view
considering the principle of liberty enshrined in Article 21 of the
Constitution of India 1950, unless perversity is blatantly forthcoming and
there are compelling reasons.
iii) Where two views are
possible, then this Court would not ordinarily interfere and reverse the
concurrent findings of acquittal. However, where the situation is such that the
only conclusion which could be arrived at from a comprehensive appraisal of evidence,
shows that there has been a grave miscarriage of justice, then, notwithstanding
such concurrent view, this Court would not restrict itself to adopt an
oppugnant view.
iv) To adjudge whether the
concurrent findings of acquittal are ‘perverse’ it is to be seen whether there
has been failure of justice. The Supreme Court has clarified the ambit of the
term ‘perversity’ as “if the findings have been arrived at by ignoring or
excluding relevant material or by taking into consideration
irrelevant/admissible material. The finding may also be said to be perverse if
it is ‘against the weight of evidence’, or if the finding so outrageously
defies logic as to suffer from the vice of irrationality.”
v) In situations of concurrent
findings favoring accused, interference is required where the trial court
adopted an incorrect approach in framing of an issue of fact and the appellate
court whilst affirming the view of the trial court, lacked in appreciating the
evidence produced by the accused in rebutting a legal presumption.
vi) Interference may be necessitated
to safeguard interests of justice when the acquittal is based on some
irrelevant grounds or fallacies in re- appreciation of any fundamental
evidentiary material or a manifest error of law or in cases of non- adherence
to the principles of natural justice or the decision is manifestly unjust or
where an acquittal which is fundamentally based on an exaggerated adherence to
the principle of granting benefit of doubt to the accused, is liable to be set
aside.
(vii) If no perversity and lack
of evidence in the case of the respondent- accused is discernible and if the
concurrent findings have backing of detailed appraisal of evidences and facts,
then no interference in order of acquittal could be warranted. It is held in M/s Rajco
Steel Enterprises vs Kavita Saraff & Anr 2024 SCC OnLine SC 518
that reversing the concurrent findings of acquittal of accused should be the
norm underscoring the principle of non-interference.
REMARK
The
ambit of probable defence in order to rebut the presumption u/s 138 of
Negotiable Instruments Act is well defined and in order to raise a probable
defence with a view to rebut initial presumption as contained u/s 138 of
Negotiable Instruments Act, mere denial of the averments shall not come in the
aid of the accused and the defence raised ought to be plausible and quite
probable and if such probable defence is raised, only then onus shall shift on
the complainant back again. It is at this stage, that the complainant shall
have to dismantle the defence of the accused in order to succeed. Once, initial
presumption is rebutted, then during trial the question shall revolve around preponderance
of probabilities and as to whether the defence raised is such so as to give a
blow to the complaint and its averments or it is mere ritualistic. Once, a
plausible defence is raised the reverse onus has to be discharged by the
complainant with concrete evidence. The periphery of defence and substantive
defence shall be different in the facts and circumstances of every case, but
once, the initial presumption is successfully rebutted, then, complainant may
succeed, only, if through cogent evidence, by way of reverse onus, the
complaint is able to push back the matter back to the accused. All that has to
come during full dress trial and the aspect of law such as consideration or
lack of it, apart from the other legal issues either procedural or legal are to
be dealt with.
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