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IN THE HIGH COURT OF JUDICATURE AT MADRAS
RMT. TEEKAA RAMAN, J.
Vytla Veeranna Chowdary – Appellant
Versus
Mattaparthi Venkateswara Rao – Respondent
CRL.A. No. 243 of 2016
Decided On : 30-06-2023
Negotiable Instruments Act - Private Complaint - Section 138 - 139 - 200 - 374 - 378 - [138, 139, 200, 374, 378] - The court discussed the statutory presumption under Section 139 of the Negotiable Instruments Act and the burden of proof on the accused to prove his probable defense. It emphasized the shifting nature of the burden of proof and the privilege of the accused to not testify. The court also considered the financial capacity of the complainant and the accused, ultimately confirming the judgment of acquittal.
Fact of the Case:
The appellant filed a complaint under Section 138 of the Negotiable Instruments Act against the accused for issuing a cheque that was returned unpaid. The trial court acquitted the accused based on the complainant's lack of proof of financial capacity to lend the amount.
Finding of the Court:
The court found that the accused admitted the signature and the cheque, triggering the presumption under Section 139 of the Negotiable Instruments Act. It also considered the financial capacity of the parties and confirmed the judgment of acquittal.
Issues: The issues revolved around the burden of proof, statutory presumption under Section 139, and the financial capacity of the complainant and the accused.
Ratio Decidendi: The burden of proof shifts based on the existence of a probable defense or preponderance of probabilities. The accused has the privilege to not testify, and the complainant must prove the offense beyond doubt. The financial capacity of the parties is crucial in cases involving lending and borrowing.
Final Decision: The criminal appeal was dismissed, and the judgment of acquittal was confirmed.
Certainly. Based on the provided legal document, here are the key points summarized:
The case involves a criminal appeal against an acquittal in a complaint under Section 138 of the Negotiable Instruments Act, where the complainant alleged issuance of a dishonored cheque by the accused (!) .
The core issue revolves around the presumption of liability under Section 139 of the Negotiable Instruments Act, which shifts the burden of proof to the accused once the signature and cheque are admitted (!) .
The accused claimed that he did not borrow any amount from the complainant and that the cheque was misused, asserting that he stood as a guarantor for a third party who had borrowed the money (!) (!) .
The accused's defense was that he was not involved in the loan transaction and that the cheque was obtained under false pretenses, with the complainant having no financial capacity to lend such a large sum (!) (!) (!) .
The trial court examined the financial capacity of the complainant, noting that his income and assets suggested he lacked the means to lend Rs.3,00,000, and thus, the presumption of liability was not conclusively established (!) (!) .
The court highlighted that the burden of proof is dynamic, shifting based on the existence of probable defenses or preponderance of probabilities, and that the accused is not obliged to testify to establish his defense (!) (!) .
The court emphasized that the accused's admissions, particularly regarding his financial status and the lack of a direct contractual relationship, supported the conclusion that the complainant lacked the capacity to lend the amount (!) (!) .
The appellate court confirmed the trial court's findings, agreeing that the evidence demonstrated the complainant's inability to substantiate his claim of financial capacity, leading to the dismissal of the appeal and the affirmation of the acquittal (!) .
Overall, the judgment underscores the importance of establishing financial capacity in cases involving lending and borrowing, and clarifies the shifting nature of the burden of proof under the relevant statutory provisions [judgement_subject][judgement_act_referred].
Please let me know if you need a more detailed analysis or specific legal advice related to this case.
JUDGMENT
(Prayer: Criminal Appeal is filed under Section 374 of Criminal Procedure Code, praying to call for the records in STC No.370 of 2013 dated 09.12.2015 of the learned Judicial Magistrate Court, Yanam and set aside the order of acquittal.)
1. This appeal is against the order of aquittal. This case arises under private complaint initiated otherwise than on police report.
2. The unsuccessful complainant is the appellant herein, who filed a complaint under Section 200 of Cr.P.C for the alleged offence under Section 138 of Negotiable Instruments Act, by the accused.
3. The brief facts of the case is that the accused had borrowed a sum of Rs.3,00,000/- from the complainant on 09.09.2011 and has issued the cheque dated 27.02.2013 bearing No.026521 drawn on Indian bank, Yanam for Rs.2,60,000/-. The cheque when presented for collection was returned for want of sufficient funds. Therefore, the complainant has issued a notice on 13.03.2013, calling upon the accused to pay the cheque amount within 15 days. As the accused did not pay the cheque amount as demanded, the present complaint has been filed against him for an offence under Section 138 of the Negotiable Instruments Act. After observing the formalities the case is taken on file.
4. (a) The case of the complainant both in the complaint as well as in the witness box as PW1 is that the accused approached him to advance a sum of Rs.3,00,000/- to meet his family expenses. He has agreed to repay the amount with interest at the rate of 24% per annum. Therefore, the complainant has advanced a sum of Rs.3,00,000/- as loan on 09.09.2011. The Accused has executed a Promissory Note-Ex.P1, agreeing to repay the principal amount of Rs.3,00,000/- together with interest at the rate of 24% per annum. After repeated demands, the accused has issued Ex.P2 the cheque bearing No.026521 dated 27.02.2013, drawn on Indian Bank, Yanam for Rs.2,60,000/- as part payment of the above debt. The complainant presented the cheque through Andhra Bank, Yanam. It was returned unpaid for want of sufficient funds. The Return Memo of Indian Bank is Ex.P3. It was given to the complainant by his banker Andhra Bank, Yanam on 13.03.2013 along with Ex.P4 another Memo.
(b) Thereafter the complainant has issued Ex.P5 Statutory Notice on 13.03.2013, demanding the accused to pay the cheque amount with the stipulated period. Having received the notice under Ex.P6, the Acknowledgment Card, the accused without repaying the amount has issued a Reply Notice under Ex.P7. Therefore, the complainant alleges that the accused has committed an offence punishable under Section 138 of the Negotiable Instruments Act.
5. The accused has not adduced any oral or documentary evidence. The trial Court has held that the complainant has not proved the financial capacity to lend Rs.3 Lakhs and accordingly, acquitted the accused and hence, the appeal.
6. The learned counsel for the appellant/complainant could contend that the trial Court has not considered the statutory presumption for which the appellant/complainant is entitled to and wrongly cast the burden upon the appellant to prove the case.
7. Heard the learned counsel for the respondent/accused.
8. After perusing Ex.P1-Promissory note, Ex.P2-Cheque, Ex.P3- Return Memo of Indian Bank, Yanam, Ex.P4-Return Memo of Andhra Bank, Yanam, Ex.P5 and Ex.P6 - Statutory notice and acknowledgement respectively and Ex.P7-Reply notice, I find that the cheque and the signature in the cheque is admitted by the accused.
9. In the reply statement, the accused has categorically stated as follows:
“..... he did not borrowed any amount from your client at any time. One Singavarapu Gangabhavani W/o. Satyanarayana R/o. Pydikondala Street, Yanam, approached your client for money and then your client insisted Singavarapu Gangabhavani to bring one Government Employee as a surety with empty cheque. Then the said Singavarapu Gangabhavani asked my client to stand as a surety to her, as my clien
The shifting burden of proof, statutory presumption under Section 139 of the Negotiable Instruments Act, and the consideration of financial capacity in cases of lending and borrowing.
The presumption of consideration under Sections 118 and 139 of the Negotiable Instruments Act applies unless disproven by the accused, and the burden cannot shift excessively onto the complainant.
The burden of proving the case beyond reasonable doubt lies on the complainant, and the accused has the right to establish a probable defense based on the complainant's lack of financial capacity.
The accused can raise a probable defense challenging the complainant's financial capacity, shifting the burden to the complainant to prove the case beyond reasonable doubt.
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable; the burden shifts to the complainant to prove existence of debt when the accused raises a probable defense challengi....
The burden is on the complainant to prove financial capacity when questioned; a mere presumption does not suffice if evidence is lacking.
The presumption of consideration for a cheque does not negate the complainant's burden to prove the existence of a legally recoverable debt, which can be rebutted by the accused.
Presumption under Sections 118(a) and 139 of NI Act rebutted on preponderance of probabilities where cross-examination shows complainant's lack of financial capacity as housewife with unproven remitt....
The burden of proof in Section 138 NI Act cases shifts to the complainant when the accused challenges their financial capacity, emphasizing that presumption of innocence protects the acquitted party.
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