The standard of proof required for rebuttal of the presumptions under Sections 118(a) and 139 of the Negotiable Instruments Act is 'preponderance of probability' and not 'proved beyond reasonable doubt'. The accused may adduce evidence to rebut the presumption, but mere denial regarding the existence of debt shall not serve any purpose.

TARLOK SINGH CHAUHAN, J.

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

2. Briefly stated, the case of the complainant was that the accused/respondent used to have business transaction with the complainant and taking advantage of such business transactions had purchased diesel worth Rs.4,55,000/- on credit and assured the complainant that the same shall be paid within few days. When the respondent was asked to settle the account, she handed over a cheque Ext.C-1 dated 27.12.2012 for the aforesaid amount on an account maintained by her with Punjab National Bank, which on presentation was received back dishonoured with the remarks ‘funds insufficient’. The petitioner thereafter issued notice to the respondent which was duly served upon her, yet she failed to make the payment, constraining the petitioner to file a complaint under Section 138 of the Act.

3. The complainant/petitioner in support of his contention, examined two witnesses. Thereafter, the statement of the respondent under Section 313 Cr.P.C. was recorded. However, the respondent did not choose to lead any evidence and on the basis of the evidence on record, the learned trial Court proceeded to acquit the respondent/accused.

4. Aggrieved by the order of acquittal, the petitioner/ complainant has filed this appeal mainly on the ground that the learned Court below while acquitting the accused has failed to take into consideration the presumption attached to the Negotiable Instrument under Sections 118(a) and 139 of the Act.

I have heard the learned counsel for the parties and have also gone through the material placed on record.

5. 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;

1 [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.]

6. 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 from not honouring the commitments by way of payment through cheques. It is for this reason that the Courts should lean in favour of an interpretation which serves the object of the statue.

7. In M.S. Narayana Menon alias Mani versus State of Kerala and another, (2006) 6 SCC 39, the Hon’ble Supreme Court while dealing with a case under Section 138 of the Act held that the presumption under Sections 118(a) and 139 were rebuttable and the standard of proof required for such rebuttal was “preponderance of probability” and not proof “proved beyond reasonable doubt” and it was held as under:-

“29. In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words ‘proved’ and ‘disproved’ have been defined in Section 3 of the Evidence Act (the interpretation clause)....

30. Applying the said definitions of ‘proved’ or ‘disproved’ to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for considerat