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IN THE HIGH COURT OF KERALA AT ERNAKULAM
K. BABU, J.
Rahiya, W/o Shri.Ismail – Appellant
Versus
Jasna, W/o Shri Najeeb – Respondent
Crl.A No. 532 of 2022
Decided on : 13-03-2024
Negotiable Instruments Act - Cheque dishonour - Section 138 - 139 - 118(a) - 3 - Evidence Act - Hiten P. Balal v. Bratindranath Banerjee - Bharat Barrel & Drum Mfg. Co. v. Amin Chand Payrelal - Harbhajan Singh v. State of Punjab - V. D. Jhingan v. State of Uttar Pradesh - M.S.Narayana Menon v. State of Kerala - Chandrappa and others v. State of Karnataka
Fact of the Case:
The complainant filed a complaint alleging offence punishable under Section 138 of the Negotiable Instruments Act. The accused executed a cheque for Rs.10,00,000 drawn on the Federal Bank Ltd., which was dishonoured due to insufficient funds. The complainant proved the execution of the cheque and relied on statutory presumptions under the Negotiable Instruments Act.
Finding of the Court:
The trial Court acquitted the accused, and the appeal was made challenging the judgment. The court analyzed the evidence and legal provisions related to the presumption of consideration under the Negotiable Instruments Act and held that the reasoning recorded by the trial Court for acquitting the accused was possible and plausible, and no interference was required.
Issues: The issues revolved around the execution of the cheque, presumption of consideration, burden of proof, and the sufficiency of evidence to establish the existence of consideration for the cheque.
Ratio Decidendi: The court emphasized the statutory presumptions under the Negotiable Instruments Act, the burden of proof on the accused to rebut the presumption of consideration, and the standard of proof required to discharge the onus of proof. The court also highlighted the principles related to appellate review of acquittal orders.
Final Decision: The appeal lacked merit and was dismissed.
Key Points: - The complainant proved the execution of the cheque and that the cheque was drawn from the accused’s account; presumption of consideration applies under sections 118(a) and 139; burden shifts to the accused to rebut the presumption (!) - The court may consider whether the accused successfully rebutted the presumption by raising a probable defence; the standard is what a prudent person would consider reasonably probable, not necessarily conclusive (!) (!) - On appeal, the court may re-appreciate the evidence and may overturn an acquittal if two reasonable conclusions are possible; however, double presumption of innocence in favor of the accused applies, and interference requires solid reasoning; if two reasonable conclusions are possible, the appellate court should not disturb the acquittal (!) (!) (!) (!) - The trial court’s conclusion that the complainant failed to prove the existence of consideration cannot be set aside if the evidence supports that conclusion; suspicion surrounding the transaction can justify acquittal if not satisfactorily explained (!) (!) - The complainant’s evidence included the alleged loan arrangement, mortgage of property, and the cheque’s issuance; inconsistencies in documentary evidence (Ext.P6) and testimony can impact credibility and the application of presumptions (!) (!) (!) (!)
JUDGMENT :
The challenge in this appeal is to the judgment dated 23.3.2022 in C.C.No.393/2017 passed by the Judicial First Class Magistrate-I, Aluva. The appellant is the compl ainant. Respondent No.1 is the accused.
2. The parties will be referred to hereinafter according to their position in the trial Court. The complainant filed a complaint alleging offence punishable under Section 138 of the Negotiable Instruments Act. The accused executed a cheque for Rs.10,00,000/-(Rupees ten lakhs only) drawn on the Federal Bank Ltd., Panangad Branch, in favour of the complainant. The cheque was dishonoured due to insufficient funds. The complainant caused to issue a lawyer’s notice, which the accused received but failed to pay the amount covered by the cheque.
3. The complainant has examined herself as PW1. A witness was examined as PW2. The complainant proved Exts.P1 to P7. The Court below acquitted the accused at the close of the trial.
4. Heard the learned counsel appearing for the complainant and the learned counsel appearing for the accused.
5. The learned counsel for the complainant submitted that the judgment of acquittal passed by the Court below is illegal and unsustainable in law. The learned counsel, relying on Uttam Ram v. Devinder Singh Hudan and Another [2019 (5) KHC 179 : (2019) 10 SCC 287] and Jacob K.M. v. State of Kerala and Another (2020 (1) KHC 291), submitted that as the complainant established execution of Ext.P1 cheque, the mandatory presumption as provided under Section 139 of the Negotiable Instruments Act has been drawn in her favour.
6. The learned counsel relied on Jacob K.M. (supra) to contend that in a case where the accused did not send a reply to the statutory notice, the absence of details regarding the original transaction does not affect the credibility of the testimony of the complainant.
7. The learned counsel for the accused submitted that the complainant failed to prove the execution of the cheque. It is further submitted that even if it is assumed that a presumption has been drawn, the accused could successfully rebut it.
8. The complainant is the sister-in-law of the accused. She gave evidence that the accused requested a loan of Rs.10,00,000/-from her. The complainant went to Keezhmadu Service Co-operative Bank, Aluva Mahilalayam Branch, pledged 5 cents of land and a house therein, obtained Rs.10,00,000/-and handed it over to the accused without discussing it with the other members of her family. PW1 stated that the accused had agreed to return the amount on the 31st day after the borrowal. After 30 days, the accused came to the complainant’s house and gave Ext.P1 cheque.
9. In the complaint, the complainant has not pleaded the dates she lent the money, and the accused executed the cheque. While giving evidence, the complainant stated that the accused executed the cheque on 3.1.2017.
10. Ext.P1 cheque is drawn from the account of the accused. The evidence of PW2 corroborates the oral evidence of PW1 to establish that the cheque was drawn from the account maintained by the accused. Therefore, the complainant could prove the issuance of Ext.P1 cheque by the accused. A negotiable instrument, including the cheque, carries presumption in consideration in terms of Section 118(a) and under Section 139 of the Negotiable Instruments Act. A dishonour of cheque carries a statutory presumption of consideration. The holder of the cheque, in due course, is only required to prove that the cheque was issued by the accused and that when the same was presented, it was not honoured. Since there is a statutory presumption of consideration, the burden is on the accused to rebut the presumption that the cheque was issued not for any debt or other liability (Vide: Uttam Ram v. Devinder Singh Hudan and Another [2019 (5) KHC 179 : (2019) 10 SCC 287].
11. Therefore, the necessary conclusion is that the complainant has established the execution of Ext.P1 cheque by the accused.
12. Now, the question that arises for consideration is w
The presumption of consideration under the Negotiable Instruments Act can be rebutted by the accused through a preponderance of probabilities, shifting the burden back to the complainant to prove the....
The presumption of consideration under Section 139 of the Negotiable Instruments Act shifts the burden to the accused to prove the non-existence of a debt, which was not established in this case.
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 main legal point established in the judgment is the significance of the accused raising a probable defense to rebut the presumption under Section 139 of the N.I. Act, and the requirement for the ....
Point of Law : Fact that details in the cheque have been filled up not by drawer, but by some other person would be immaterial - Presumption which arises on the signing of the cheque cannot be rebutt....
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....
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 Sections 118(a) and 139 of the Negotiable Instruments Act can be rebutted by the accused, leading to acquittal if the complainant fails to prove a legally enforceable debt.
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