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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Pushpendra Singh Bhati, J.
Yashpal Singh Bhati – Appellant
Versus
State Of Rajasthan & Ors. – Respondents
S.B. Criminal Leave to Appeal No. 66/2019
Decided On : 15-03-2022
Negotiable Instruments Act - Dishonored Cheque - Section 138 - 138 Negotiable Instruments Act - 138 Negotiable Instruments Act - 139 Negotiable Instruments Act - 118(a) Negotiable Instruments Act - 25.1. Once the execution of cheque is admitted Section 139 of the Act mandates a presumption that the cheque was for the discharge of any debt or other liability. 25.2. The presumption Under Section 139 is a rebuttable presumption and the onus is on the Accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the Accused to rely on evidence led by him or the Accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the Accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the Accused to come in the witness box to support his defence. - The proviso appended to the said section provides for compliance of legal requirements before a complaint petition can be acted upon by a court of law. Section 139 of the Act merely raises a presumption in regard to the second aspect of the matter. Existence of legally recoverable debt is not a matter of presumption under Section 139 of the Act. It merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. The courts below, as noticed hereinbefore, proceeded on the basis that Section 139 raises a presumption in regard to existence of a debt also. The courts below, in our opinion, committed a serious error in proceeding on the basis that for proving the defence the accused is required to step into the witness box and unless he does so he would not be discharging his burden. Such an approach on the part of the courts, we feel, is not correct. An accused for discharging the burden of proof placed upon him under a statute need not examine himself. He may discharge his burden on the basis of the materials already brought on records. An accused has a constitutional right to maintain silence. Standard of proof on the part of an accused and that of the prosecution in a criminal case is different. - When we examine the case of the Respondent-complainant as projected before the learned Chief Judicial Magistrate and the material evidence placed before the trial Court, we find that the trial Court had noted certain vital defects in the case of the Respondent-complainant. Such defects noted by the learned Chief Judicial Magistrate were as under: (a) .. (b) .. (c) In the course of cross-examination, the Respondent stated that the cheque was signed on the date when the payment was made, nevertheless he stated that he was not aware of the date when he paid the sum of Rs. 1,50,000/- (d) .. (e) .. (f) .. 9. ... It has to be stated that in order to draw the presumption under Section 118 read along with 139 of the Negotiable Instruments Act, the burden was heavily upon the complainant to have shown that he had required funds for having advanced the money to the accused; that the issuance of the cheque in support of the said payment advanced was true and that the accused was bound to make the payment as had been agreed while issuing the cheque in favour of the complainant.
Fact of the Case:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the respondent No. 2 when the cheque issued by the respondent No. 2 was dishonored by the bank citing insufficiency of funds in the account of the respondent No. 2.
Finding of the Court:
The court found that the accused was able to successfully establish a probable defence and that the complainant was unable to substantiate and prove the allegations made by him before the court.
Issues: The issues revolved around the dishonor of the cheque issued by the respondent No. 2 and the burden of proof placed upon the complainant to establish the existence of a legally enforceable debt or liability.
Ratio Decidendi: The court emphasized the presumption under Section 139 of the Negotiable Instruments Act, the burden of proof placed on the accused, and the necessity for the complainant to provide substantive evidence to establish the existence of liability of the cheque amount against the accused.
Final Decision: The court dismissed the leave to appeal, affirming the impugned judgment that acquitted the respondent No. 2 of the offence alleged against him.
Based on the provided legal document, the key points are as follows:
The judgment emphasizes that under the Negotiable Instruments Act, once the execution of a cheque is admitted, there is a presumption that the cheque was issued for the discharge of a debt or liability. However, this presumption is rebuttable, and the burden is on the accused to raise a probable defense by preponderance of probabilities [p_25.2][p_25.3].
The accused is not required to testify or enter the witness box to support their defense; they can discharge their evidentiary burden through materials already on record. The standard of proof for rebutting the presumption is lower than beyond a reasonable doubt, relying instead on preponderance of probabilities [p_25.4][p_25.5].
The court highlights that the presumption under Section 139 does not extend to the existence of a legally recoverable debt; it only presumes that the cheque was issued for the discharge of any debt or liability [p_25.1].
The burden of proof to establish the existence of a legally enforceable debt or liability lies with the complainant. The complainant must prove that the debt was subsisting at the time of the cheque's issuance and that the cheque was issued towards its discharge (!) (!) .
The evidence must establish that the cheque was "drawn" or "executed" by the accused, meaning the accused either created or signed the cheque. Mere possession or the presentation of the cheque is insufficient without proof of drawing or execution by the accused (!) (!) .
If the prosecution relies on circumstantial evidence to prove the drawing of the cheque, it must establish each circumstance convincingly, leading to the irrefutable conclusion that the accused drew the cheque (!) (!) .
The court underscores that the initial and fundamental step for the complainant is to prove that the cheque was issued in discharge of a legally enforceable debt. Failure to prove the act of drawing the cheque or the existence of a debt results in the acquittal of the accused (!) .
The judgment confirms that the accused has a constitutional right to remain silent and is not obliged to testify. The standard of proof and the approach to evidence differ between the prosecution and the defense (!) .
The court found that the respondent successfully established a probable defense, and the complainant failed to substantiate the allegations. The evidence indicated that the respondent did not in fact issue the cheque to the complainant for a debt, but that the cheque was obtained through other circumstances, including misuse or misappropriation (!) (!) .
The final decision dismisses the appeal, affirming that the lower court's judgment was well-founded based on the evidence and circumstances, and there is no legal infirmity warranting interference (!) (!) .
In summary, the case underscores the importance of the complainant's burden to prove the existence of a legally enforceable debt and the proper issuance of the cheque by the accused. It also clarifies that the accused's burden is limited to raising a probable defense and that the presumption of liability can be rebutted with sufficient evidence on record.
JUDGMENT
Pushpendra Singh Bhati, J. - In the wake of instant surge in COVID - 19 cases and spread of its highly infectious Omicron variant, abundant caution is being maintained, while hearing the matters in the Court, for the safety of all concerned.
2. This Criminal Leave to Appeal under Section 378 (4) Cr.P.C. has been preferred claiming the following reliefs:
"1. This leave to appeal may kindly be granted and the memo of leave may kindly be treated as memo of appeal.
2. The Judgment dated 28.11.2018 passed by the learned Special Metropolitan Magistrate, NI Act Cases, Pali, in Crl Original Case No. 1525/2017 may kindly be set aside and the respondent be convicted for the offence U/s 138 Negotiable Instruments Act as charged by allowing the complaint of the complainant as prayed."
3. The brief facts of the case as placed before this Court by the learned counsel for the appellant are that the appellant filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as 'the Act') against the respondent No. 2 before the learned Court below, when the cheque issued by the respondent No. 2, bearing cheque no. 657728, dated 10.2.2017 for a sum of Rs. 9,55,000/- was dishonored by the bank citing insufficiency of funds in the account of the respondent No. 2.
4. Learned counsel for the appellant submits that the learned court below has passed the impugned order on the basis of minor contradictions in the statement of the appellant viz. the complainant-appellant has not filed any documents for proof of income, date and year of transaction; whereas it is an admitted fact that the respondent No. 2 did not deny his signature over the cheque in question.
5. Learned counsel for the appellant further submits that the learned court below, while passing the impugned order did not consider that the respondent No. 2 has given a completely incorrect and different version as regards the factual matrix of the case. And that the complainant-appellant repeatedly stated that the accused respondent made part payments in repayment of his liability to him, and only, issued a cheque to him, towards the final payment to finally discharge himself of the liability towards the complainant-appellant, and that the same was not appreciated by the learned Court below.
6. Learned counsel for the appellant thus submits that the learned court below unfairly and incorrectly, vide judgment dated 28.11.2018, acquitted the respondent No. 2 of the offence alleged against him, by giving the respondent No. 2 the benefit of doubt.
7. Learned counsel for the appellant placed reliance on the following judgments.
7.1. T.P. Murugan (Dead) Thr. Lrs. v. Bojan, 2018 (Suppl.) Civil Court Cases 351 (S.C.), relevant portion of which reads as under:
"9. The appellants have proved their case by overwhelming evidence to establish that the two cheques were issued towards the discharge of an existing liability and legally enforceable debt. The respondent having admitted that the cheques and Pronote were signed by him, the presumption under S. 139 would operate. The respondent failed to rebut the presumption by adducing any cogent or credible evidence. Hence, his defence is rejected.
10. In view of the aforesaid facts and circumstances, the impugned order dated 27.09.2013 passed in Criminal Revision Petition Nos. 1657 and 1658 of 2008 is hereby set aside, and the order of Conviction and Fine passed by the Trial Court is restored.
11. The Appeals are allowed accordingly."
7.2. K.S. Ranganatha v. Vittal Shetty, 2022 (1) RCR (Criminal) 445, relevant portion of which reads as under:
"11. The position of law as noted above makes it crystal clear that when a cheque is drawn out and is relied upon by the drawee, it will raise a presumption that it is drawn towards a consideration which is a legally recoverable amount; such presumption of course, is rebuttable by proving to the contrary. The onus is on the Accused to raise a probable defence and the standard of proof for rebut
AI
The presumption under Section 139 of the NI Act mandates that a cheque is presumed to be issued for discharge of a debt unless the accused proves otherwise.
A presumption of debt exists under Sections 138 and 139 of the Negotiable Instruments Act, which the accused failed to rebut, affirming liability for dishonored cheques.
The presumption under Section 139 of the Negotiable Instruments Act is mandatory, placing the burden on the accused to rebut the existence of a legally enforceable debt.
The main legal point established in this judgment is that under Section 139 of the Negotiable Instruments Act, there is a presumption that a cheque is issued for the discharge of a debt or liability.....
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....
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 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....
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