The burden of proof on the complainant to establish the existence of debt and liability by cogent and convincing evidence, and the rebuttable presumption under Section 139 of the N.I. Act.

The appellant was the complainant before XVIACMM, Bangalore in C.C. No. 9769 of 2008. By judgment dated 23-5-2009, respondent-accused has been acquitted of the charge under Section 138 of the Negotiable Instruments Act, 1881. Hence, this appeal by the complainant.

2. The brief facts of the case of the complainant are as under:

The respondent (hereinafter be called as 'accused') borrowed a sum of Rs. 6.00 lakhs as hand loan from the appellant (hereinafter called as 'complainant') to meet his family financial necessities during the month of January 2006. The accused repaid an amount of Rs. 88,000/- out of the loan amount of Rs. 6,00,000/-. For the balance amount of Rs. 5,12,000/-, the accused issued a cheque for Rs. 2,62,000/- and another cheque for Rs. 2,50,000/- dated 13-3-2008. On presentation of both the cheques by the complainant through his banker for encashment, both the cheques were dishonoured for the reason 'funds insufficient'. The complainant got issued a demand notice dated 20-2-2008 to the accused both by RPAD and under certificate of posting demanding the payment of the amount under both the cheques within 15 days from the date of receipt of notice. The notice sent to the accused by RPAD and UCP was duly served upon the accused. The accused gave untenable reply, which made the complainant to file a complaint against the accused for the offence punishable under Section 138 of the N.I. Act.

3. The accused appeared and denied the accusation. The complainant in order to prove his case, led his evidence as P.W. 1 and marked Exs. P. 1 to P. 11. The accused on the other hand in support of his defence led his evidence as D.W. 1 and marked Exs. D. 1 to D. 5. The learned Magistrate upon hearing the arguments and upon consideration of the entire material placed on record by the impugned judgment acquitted the accused holding that the complainant failed to prove his case.

I have heard the submission made by the learned Counsel. Perused the records and the judgment passed by the Court below.

4. At the outset, it has to be stated that all the necessary conditions to file a complaint for the offence punishable under Section 138 of N.I. Act have been duly complied with. There is no dispute between the parties in that regard. What has been disputed by the accused is that the cheques in question were not issued by the accused to the complainant towards the discharge of legally recoverable debt. It is the case of the accused that he had never taken hand loan of Rs. 6.00 lakhs from the complainant nor he issued the two cheques referred to by the complainant in favour of the complainant. Since the accused has admitted his signatures on both the cheques, at the most, presumption can be drawn under Section 139 of the N.I. Act that the cheques were issued towards the discharge of legal liability. But the presumption under Section 139 of the N.I. Act is a rebuttable presumption. Accused can rebut the presumption by leading evidence or from the evidence placed on record by the complainant. The accused need not prove his case beyond reasonable doubt. The burden to be discharged by an accused is that of a plaintiff or defendant in a civil suit i.e. preponderance of probability. Further it has to be stated that the presumption under Section 139 of the N.I. Act is presumption as to legally recoverable debt. But there is no presumption as to the existence of debt or liability. Therefore, the existence of debt and liability of the accused towards the complainant is to be established by the complainant by cogent and convincing evidence. It is in this background, the evidence placed on record by the parties will have to be appreciated.

5. The case of the complainant that he advanced a hand loan of Rs. 6.00 lakhs to the accused in the month of January 2006. Admittedly, there is no documentary evidence for having advanced such a huge amount as hand loan to the accused. No specific date on which the amount was advanced as hand loan is not forthco