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IN THE HIGH COURT OF KARNATAKA
J.M. Khazi, J.
Murtuja – Appellant
Versus
Zakeer – Respondent
Crl.A. No. 200123 of 2017
Decided On : 16-09-2021
Sec. 138 of Negotiable Instruments Act - Dismissal of complaint under Sec. 200 of Code of Criminal Procedure - Sec. 139 of N.I. Act - Sec. 139 presumption in favor of holder - Sec. 138 offense - presumption regarding the existence of a legally enforceable debt or liability - reverse onus clause - standard of proof for rebutting the presumption - preponderance of probabilities - accused successfully rebutting the presumption - shifting the onus on the complainant - failure of the complainant to discharge the onus - no perversity in the conclusions arrived at by the Trial Court
Fact of the Case:
The complainant, a businessman, extended a hand loan of Rs.5,10,000 to the accused, a Government teacher, who promised to repay it within six months. When the accused did not repay, he issued a cheque which was dishonored. The trial court dismissed the complaint, and the complainant filed an appeal.
Finding of the Court:
The court found that the accused successfully rebutted the presumption under Sec. 139 of N.I. Act, shifting the onus on the complainant to prove the financial capacity to advance the amount and the necessity of the accused to borrow it. The complainant failed to discharge the onus, and the court concluded that the offense under Sec. 138 of N.I. Act was not made out against the accused.
Issues: The issues revolved around the presumption in favor of the holder under Sec. 139 of N.I. Act, the standard of proof for rebutting the presumption, and the shifting of the onus on the complainant to prove the financial capacity and necessity of the accused.
Ratio Decidendi: The court emphasized the reverse onus clause under Sec. 139 of N.I. Act, the standard of proof for rebutting the presumption as 'preponderance of probabilities,' and the accused's successful rebuttal of the presumption, shifting the onus on the complainant.
Final Decision: The appeal filed by the complainant was dismissed.
JUDGMENT :
1. Being aggrieved by the dismissal of complaint filed under Sec. 200 of Code of Criminal Procedure (hereinafter referred to as 'Cr.P.C.' for short), 1973, for the offence punishable under Sec. 138 of Negotiable Instruments Act (hereinafter referred to as 'N.I.Act' for short), 1881, against the accused, complainant has filed this appeal under Sec. 378(4) of Cr.P.C.
2. After due service of notice, respondent has appeared through counsel.
3. For the sake of convenience, the parties are referred to their ranks before the Trial Court.
4. It is the case of the complainant that he is a business man whereas accused is a Government teacher. They are close friends since for the last few years. In the month of April-2014, accused approached complainant with a request to advance a sum of Rs.5,10,000.00 by way of hand loan to meet his urgent family necessity. Since complainant is having complete trust in the accused and to over come his difficulty, he extended hand loan of Rs.5,10,000.00 to the accused. Accused promise to repay the same within six months.
5. It is further case of the complainant that after six months when accused did not choose to repay the amount, on his repeated request and demand accused issued cheque No.686146 dtd. 9/12/2014 for Rs.5,10,000.00 drawn on State Bank of Hydrabad, Bijapur branch with a request to present the same for collection. When complainant presented the same, it was returned with endorsement "insufficient funds". Inspite of issue and service of legal notice dtd. 26/12/2014 calling upon the accused to pay the amount due under the cheque, accused has not complied with the said request and therefore the complaint.
6. After due service of summons, accused appeared through counsel and contested the case.
7. In support of his case, complainant has examined himself as PW1 and relied upon the Ex.P1 to P5. Through the cross examining of PW1, the accused has got marked one document as Ex.D1.
8. In his statement under Sec. 313 of Cr.PC accused has denied the incriminating evidence against him. He has not chosen to lead evidence on his behalf.
9. After hearing the arguments on both sides, the trial court dismissed the complaint on the ground that the complainant has failed to prove that he had advanced loan of Rs.5,10,000.00 to the accused. On the other hand, the accused has proved that the cheque in question was issued by way of security to the land transaction between the complainant and brother of the accused.
10. Being aggrieved by the impugned judgment and order of acquittal, the complainant has filed this appeal on the following grounds.
i) In view of presumption under Sec. 118 and 139 of N.I. Act, issue of cheque and dishonor of the same is sufficient to constitute the offence under Sec. 138 of N.I. Act. In the instance case, without any rebuttal evidence by the accused, the trial court has wrongly held that the accused has rebutted the presumption. Therefore, the findings of the trial court is liable to be set aside.
ii) The trial court misdirected itself by relying on the statement of the complainant in the cross examination, which is a statement relating to the year 2013 where as the cheque in question was issued on 19/12/2014. Therefore, the admission alone is not sufficient to rebut the presumption available in favour of the complainant.
iii) Since the accused has admitted the fact of issue of cheque and his signature, it is necessary to raise a initial presumption in favour of the complainant that the cheque in question was issued towards repayment of any debt or liability. Therefore, the findings of the trial court are perverse and not inconsonance with the provisions of the N.I.Act.
iv) The trial court has wrongly casted the burden on the complainant. It has failed to consider the evidence of complainant in its entirety. The trial court has wrongly casted the burden on complainant by relying upon Sec. 101 of Indian Evidence Act.
11. On the other hand, the learned counsel representing accused has supp
AI
The main legal point established in the judgment is the application of the reverse onus clause under Sec. 139 of N.I. Act, the standard of proof for rebutting the presumption, and the shifting of the....
The main legal point established in the judgment is that the presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the burden lies on the accused to raise a probable defe....
Presumption under Sections 118(a) and 139 of NI Act rebutted on preponderance of probabilities where cross-examination shows complainant's lack of financial capacity as housewife with unproven remitt....
The burden is on the complainant to prove financial capacity when questioned; a mere presumption does not suffice if evidence is lacking.
The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt or liability unless proven otherwise, and the accused's burden to raise a probable defense to rebut the....
Dishonour of cheque – Whereas prosecution must prove guilt of an accused beyond all reasonable doubt, standard of proof so as to prove a defence on part of accused is preponderance of probabilities.
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
The presumption under Section 139 of N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of i....
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the accused must raise a probable defense to contest the existence of a legally enforceable debt.
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