SECTION 138 OF NEGOTIOABLE INSTRUMENTS ACT: ACQUITTAL BASED ON REBUTTAL AND SUSTAINED IN APPEAL

 

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.

                                      -------