The standard of proof required for rebutting presumptions under the Negotiable Instruments Act and the importance of establishing the holder in due course and proving relevant connections.

JUDGMENT

Tarlok Singh Chauhan, J. (Oral) - 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 are that the appellant was running the business in the name and style of Ankit Hire Purchase Pvt. Ltd., at Ghurmarwin, District Bilaspur, of which, the petitioner was Managing Director at one point of time. It was alleged that the appellant and respondent were well known to each other and were having good terms. On 12.12.2012, the respondent visited the business premises of the appellant and requested for a sum of Rs. 5,00,000/- for his personal requirement. The appellant withdrew the amount from his account in Dadhol Agriculture Co-operative Society, Padyalg and gave the amount to the respondent, who in lieu thereof issued two cheques bearing number 654832 dated 19.12.2012 amounting to Rs. 3,00,000/- and another cheque dated 27.12.2012 amounting to Rs. 2,00,000/-, which on presentation by the appellant were returned back unpaid with the remarks "insufficient funds". Thereafter, 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 1.3.2018 on the ground that the appellant had failed to prove his case beyond shadow of doubt.

4. It is vehemently argued by Mr. Umesh Kanwar, learned 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. Maan Singh, 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 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.

8. In M.S. Narayana Menon alias Mani v. 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 Eviden