The main legal point established in the judgment is that the presumption under Section 139 of the Negotiable Instruments Act can be rebutted by the accused by pointing out contradictions/deficiencies in the evidence led by the prosecution, and it is not necessary for the accused to lead evidence in defense to rebut the presumption.

JUDGMENT

Anil Kshetarpal, J. - Leave to appeal has been sought against the judgment of acquittal passed by the learned trial Court in a complaint under Section 138 of the Negotiable Instruments Act.

2. This Court has heard learned counsel for the appellant and with his able assistance gone through the judgment passed by the trial Court.

3. Learned counsel has submitted that in view of presumption under Section 139 of the Negotiable Instruments Act, once signatures on the cheque are not disputed, therefore, it was for the respondent-accused to lead evidence and rebut the presumption available under Section 139 of the Negotiable Instruments Act. Hence, he submits that in absence of evidence, the Court committed an error in dismissing the complaint and acquitting the respondent.

4. Learned trial Court, on appreciation of evidence, has recorded following findings:-

1) Complainant has concocted false story of friendly loan, whereas in actual, present cheque was given as a blank security cheque to the complainant for grant of agency of biscuits and when the agency was not given, the complainant misused the security cheque.

2) Complainant has not disclosed the date, month and year of advancing friendly loan to the accused.

3) Complainant has not mentioned about the diary as stated by him in cross-examination either in the complaint or in his affidavit filed in lieu of examination-in-chief.

4) Complainant has admitted that he did not take signatures/thumb impressions of the accused in the said diary.

5. Learned counsel for the appellant, although made sincere attempt, however, failed to draw attention of the Court to any misreading or nonreading of substantive evidence.

6. No doubt, initial presumption is in favour of holder of the cheque in view of Section 139, however, the same is rebuttable. It is permissible for the accused to rebut the same on the basis of evidence led by the prosecution.

7. In the present case, the aforesaid presumption stands rebutted. Reference in this regard can be made to judgment passed by Hon'ble the Supreme Court dealing with rebuttable presumption and reverse onus under Section 139 of the Negotiable Instruments Act in the case of Rangappa Vs. Sri Mohan, (2010) 11 SCC 441 .

8. Paras 3, 26, 27 and 28 of the judgment passed by the Three Judge Bench in Ragappa's case (Supra) are extracted as under:-

"3. The legal question before us pertains to the proper interpretation of Section 139 of the Act which shifts the burden of proof on to the accused in respect of cheque bouncing cases. More specifically, we have been asked to clarify the manner in which this statutory presumption can be rebutted."

Xxx xxx xxx xxx

"26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant.

27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bou