The complainant must prove both the execution of the cheque and proper service of statutory notice under Section 138 to establish liability.

JUDGMENT :

Johnson John, J.

The acquittal of the accused for the offence under Section 138 of the Negotiable Instruments Act, 1881 (‘N.I Act’ for short) is challenged by the complainant in this appeal.

2. As per the complaint, the accused issued cheque dated 16.05.2005 for Rs.1,90,000/- to the complainant in discharge of a debt and when the complainant presented the cheque for collection, the same was dishonoured due to insufficiency of funds in the account of the accused. It is stated that in spite of issuance of statutory notice, the accused failed to pay the cheque amount to the complainant.

3. Before the trial court, PW1 examined and Exhibits P1 to P7 were marked from the side of the complainant, and no evidence adduced from the side of the accused.

4. After considering the oral and documentary evidence and hearing both sides, the trial court found that the complainant has not succeeded in proving the offence under Section 138 of the N.I Act against the accused and hence, the accused was acquitted.

5. Heard Sri. K.B. Arun Kumar, the learned counsel for the appellant, Sri. Mathews K. Philip, the learned counsel for the first respondent/accused and Smt. Haznamol N.S., the learned Public Prosecutor for the second respondent.

6. The learned counsel for the appellant argued that the accused has not disputed the signature in Exhibit P1 cheque and that the trial court ought to have found that the complainant is entitled for the benefit of the presumptions under Sections 139 and 118 of the N.I Act. But, the learned counsel for the accused/first respondent argued that the complainant has not disclosed the alleged date of execution and issuance of the cheque in the complaint or in his chief affidavit when examined as PW1.

7. It is also argued that the specific case of the accused is that he has not received the statutory notice and a perusal of the postal cover produced by the complainant would show that the notice was returned for the reason “addressee out of station, present address not known” and therefore, there is no compliance with Section 138 (b) of the N.I Act.

8. A perusal of the evidence of PW1 would show that he has not disclosed the date of execution and issuance of the cheque in the complaint or in his chief examination. Exhibit P1 cheque is dated 16.05.2005. In cross examination, PW1 admitted that himself and the accused were defendants in O.S. No. 135 of 2005 and that he was surety for a loan availed by the accused and when the court issued arrest warrant against him, he was compelled to pay the entire loan amount during 2007.

9. In another part of the cross examination, PW1 would say that he paid the amount in connection with this cheque to the accused on 15.12.2004. However, he admitted that the said fact is not stated in the complaint. In cross examination, PW1 also stated that he availed a house maintenance loan from HDFC Bank and out of the said loan amount, he advanced Rs.1,90,000/- to the accused.

10. It is well settled that the standard of proof which is required from the accused to rebut the statutory presumption under Sections 118 and 139 of the N.I Act is preponderance of probabilities and that the accused is not required to prove his case beyond reasonable doubt. The standard of proof, in order to rebut the statutory presumption can be inferred from the materials on record and circumstantial evidence.

11. In M.S.Narayana Menon v. State of Kerala  [(2006) 6 SCC 39), the Hon'ble Supreme Court considered the nature of the standard of proof for rebutting the presumption under Section 139 of the N.I Act and it was held that if some material is brought on record consistent with the innocence of the accused, which may