The presumption in favor of the cheque holder established under the Negotiable Instruments Act can be rebutted by the accused through a probable defense, and the prosecution must prove the existence of a lawful debt.

Headnote:(A) Negotiable Instruments Act - Sections 138 and 139 - Criminal Procedure Code - Section 200 - Appeal against acquittal - Complainant alleged dishonour of cheques related to land sale transaction - Acquittal upheld due to insufficient evidence to prove debt and liability - Court emphasized that reversing burden of proof rests upon accused, who must show probable defence without high standard of proof - Relevant admissions by complainant weakens case. (Paras 10, 14, 36)

(B) Presumption - Sections 118 and 139 of the Negotiable Instruments Act create presumptions in favour of the holder of a cheque, which can be rebutted by the accused through a probable defence. (Paras 15, 16)

Facts of the case:
The complainant sold a portion of land to the accused and later issued cheques for transaction settlement, which were dishonoured due to insufficient funds. The complainant initiated a legal complaint based on the dishonoured cheques after sending a legal notice. (Paras 4, 5, 12)

Findings of Court:
The acquittal was upheld as the complainant did not establish the accused's liability for the dishonoured cheques nor provide adequate proof of the debt owed, leading to an absence of enforceable liability. (Paras 36)

Issues: Whether the judgment of acquittal should be overturned given the evidence and circumstances established in the original trial. (Paras 8)

Ratio Decidendi: The court concluded that the presumption in favour of the cheque holder can be rebutted by the accused through evidence or cross-examination. The burden shifts to the complainant once the accused establishes a probable defence. (Paras 16, 36)

Result: Criminal Appeal dismissed, confirming the acquittal of the accused.

JUDGMENT :

K. Murali Shankar, J.

The Criminal Appeal is directed against the judgment made in C.C.No.420 of 2014, dated 17.05.2022, on the file of the Court of the Judicial Magistrate, Tiruchendur, in acquitting the respondent/accused under Section 138 of the Negotiable Instruments Act.

2. The appellant, who is the complainant, filed a complaint under Section 200 Cr.P.C., against the respondent/accused for the offence under Section 138 r/w 142 of the Negotiable Instruments Act.

3. For the sake of convenience and brevity, the parties will hereinafter be referred as per their status/ranking in the trial Court.

4. The case of the complainant is that the complainant sold a portion of his land in Melacheval, Tirunelveli District to the accused for Rs.23,00,000/- and at that time, the accused agreed to purchase the remaining lands of the complainant and requested the complainant to execute a power of attorney deed in favour of the accused's friend Kandasamy and further agreed to sell the lands and pay the sale price within a year. Both the complainant and the accused entered into an agreement in that regard and accordingly the complainant executed a power of attorney deed in favour of the accused's friend Kandasamy. Though the accused and the power agent Kandasamy have sold the land, the accused has not chosen to pay any amount to the complainant, despite repeated requests. The complainant made a complaint before the police station at Chennai and they requested him to approach the jurisdictional Tiruchendur police and accordingly, the complainant lodged a complaint. At the enquiry before the Tiruchendur Police, the accused agreed to settle the entire amount through cheques. Accepting the same, the complainant received the cheques dated 10.03.2014 and 10.04.2014. The complainant sent a cheque dated 10.03.2014 for collection and the same was honoured. Thereafter, he sent the cheque dated 10.04.2014 for collection and the same was returned for want of sufficient funds in the bank account of the accused. When the dishonour was informed to the accused, he requested that he will issue three cheques for Rs.5,00,000/- each and accordingly issued three cheques for Rs.5,00,000/- each dated 10.06.2014, 10.07.2014 and 10.08.2014 drawn on Tamil Nadu Mercantile Bank. The complainant sent the cheque dated 10.06.2014 for collection, but the same was returned as funds insufficient. Thereafter the complainant sent the other cheques for collection, but the same were dishonoured, as funds insufficient vide banker's memo dated 25.09.2014. Hence, the complainant sent a legal notice dated 04.10.2014 to the accused demanding to pay the amount covered by the cheque. The accused having received the legal notice sent a reply notice dated 29.10.2014 with false and untenable allegations. Since the accused has not paid the amount within the stipulated period, the complainant was constrained to file the above complaint for the offence under Section 138 r/w 142 of the Negotiable Instruments Act.

5. The learned Judicial Magistrate, upon receiving the complaint, recorded the sworn statement of the complainant and on perusing the records, upon satisfied that there existed a prima facie case, took the case on file in C.C.No. 420 of 2014 for the offence under Section 138 of the Negotiable Instruments Act and ordered for issuance of summons to the accused. After appearance of the accused, copies of the records were furnished to him under Section 207 Cr.P.C., on free of costs. When the accused was questioned about the offence alleged against him, he denied the commission of offence and pleaded not guilty.

6. During trial, the complainant examined himself as P.W.1 and exhibited 11 documents as Exs.P.1 to P.11. The accused examined two witnesses Thriu.Raguraman and Thiru.Kandasami as D.W.1 and D.W.2 respectively and exhibited 3 documents as D.1 to D.3

7. The learned Judicial Magistrate, upon considering the evidence both oral and documentary and on hearing the arguments of both si