The standard of proof for rebuttal in cases involving negotiable instruments is 'preponderance of probability' and not 'proved beyond reasonable doubt'. The accused must raise a probable defense, and the evidence plays a crucial role in supporting the defense.

TARLOK SINGH CHAUHAN, J.

1. The complainant is the appellant, who aggrieved by the dismissal of his complaint under Section 138 of the Negotiable Instruments Act (for short the ‘Act’), has filed the instant appeal.

2. Briefly stated the facts of the case, as set out in the complaint, are that on 15.6.2005, the respondent and her husband approached the appellant with an intention to purchase remaining share of Khasra No. 1601, situated in Village Sanghnai in presence of respectable persons of the village. The appellant agreed to sell the same and consideration was settled at Rs.35,000/ in between both the parties. At the relevant time, the respondent and her husband paid sale consideration of Rs.35,000/ by way of cheque No.167409 of Punjab National Bank, Gagret, District Una, H.P. making it post dated as on 10.11.2005. A written agreement was also entered into, which was duly signed by the respondent and her husband. It was also agreed that if the cheque is returned without payment, then respondent and her husband shall be liable to pay double of cheque amount. Consequently, the sale deed was executed on 17.8.2005. At the time of registration of sale deed, the appellant bonafidely stated that consideration amount had been received by him on the basis of aforesaid cheque of Rs.35,000/and consideration was shown as Rs.10,000/ on the request of respondent’s husband, who along with deed writer had pretended that consideration must have to be shown in the registered sale deed. Thereafter, the appellant requested many times to the respondent to pay cheque amount, but of no avail. On 31.12.2005, the appellant presented the cheque, but on 2.1.2006, the same was returned back unpaid with the remarks “insufficient funds”. Thereafter, on 20.1.2006, the appellant issued a legal notice to the respondent, yet the payment was not made constraining him to file complaint under Section 138 of the Act.

3. In support of his complaint, the appellant examined three witnesses, but the learned trial court after recording the evidence and evaluating the same dismissed the complaint vide judgment dated 14.12.2007 on the ground that the appellant had failed to prove his case beyond shadow of doubt.

4. It is vehemently argued by Mr. Tenzin Tashi Negi, learned vice counsel for the appellant, that the learned trial court has failed to take into consideration the presumption attached to the negotiable instrument as per Sections 118(a) and 139 of the Act and thereby reached at a wrong conclusion, whereas on the other hand, Mr. Sandeep K. Sharma, learned counsel for the respondent, would argue that no exception can be taken to the findings recorded by the learned trial court, more particularly, when the appellant has failed to prove his case.

5. I have heard the learned counsel for the parties and have also gone through the record of the case carefully.

6. In order to appreciate the rival contentions of the learned counsel for the parties, it would be necessary to examine Sections 118(a) and 139 of the Act and the same are reproduced as under:

“118. Presumptions as to negotiable instruments. Until the contrary is proved, the following presumptions shall be made:

(a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, endorsed, negotiated or transferred, was accepted, endorsed, negotiated or transferred for consideration;

139. Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.”

7. Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. These provisions were intended to discourage people fr