The main legal point established in the judgment is the rebuttable nature of presumptions under Sections 118 and 139 of the Negotiable Instruments Act, emphasizing the standard of proof required for rebuttal and the accused's ability to raise a probable defense to contest the existence of a legally enforceable debt or liability.

JUDGMENT :

TARLOK SINGH CHAUHAN, J.

1. The appellant is the complainant and aggrieved by the judgment of acquittal passed by the learned Sessions Judge, Hamirpur on 28.4.2018 in Criminal Appeal No. 37 of 2016, has filed the instant appeal.

2. Notably, the only ground for setting-aside the conviction and sentence as imposed by the learned trial Court in a complaint filed under Section 138 of the Negotiable Instruments Act, 1881 (for short ‘Act’) and ordering the acquittal of the respondent/accused, is contained in para-10, the relevant portion whereof reads as under:

"10.......Existence of legally recoverable debt is not a matter of presumption under Section 139 and thus the complainant has failed to establish that he had given the money to the tune of Rs. 3,40,000/- to the accused/appellant and the appellant was under liability to discharge any debt or any other liability. Since there is no pleading in the complaint as well as in the evidence that the complainant has sought the recovery of his exchequer amount along with interest and litigation expenses and he does not want any conviction of the accused."

3. Apparently, the learned Sessions Judge has not at all considered and borne in mind the presumptions as to Negotiable Instrument as envisaged under Sections 118(a) and 139 of the Act, which reads 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."

4. Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act No. 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.

5. In M.S. Narayana Menon alias Mani vs. 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" and "disproved" to principle behind Section 118(a) of the Act, the Court shall presume a negotiable instrument to be for consideration unless and until after considering the matter before it, it either believes that the consideration does not exist or considers the nonexistence of the consideration so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that the consideration does not exist. For rebutting such presumption, what is needed is to raise a probable defence. Even for the said purpose, the evidence adduced on behalf of the complainant could be relied upon.

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32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on reco