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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Vinod S. Bhardwaj, J.
Prem Singh Rohila – Appellant
Versus
State of Haryana and Another – Respondents
CRR-849-2021 (O&M)
Decided On : 02-03-2022
Presumption of Debt - Negotiable Instruments Act - Section 138 - 139 - 118 - 357(3) - The court examined the presumption under Section 139 of the Negotiable Instruments Act, 1881, which mandates a presumption that the holder of a cheque received the cheque for the discharge of any debt or other liability. The court emphasized that the presumption is rebuttable and the burden lies on the accused to raise a probable defense. The standard of proof for rebutting the presumption is that of preponderance of probabilities. The court also highlighted that the accused is not required to disprove the existence of consideration by way of direct evidence and may rely on materials submitted by the complainant to raise a probable defense. The judgment further emphasized that the failure of the complainant to display financial capacity to advance the alleged amount would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish the existence of consideration for the issuance of the cheque. The court concluded that the judgment of conviction suffered perversity and was thus set aside, and the accused was acquitted.
Fact of the Case:
The petitioner was convicted for offenses under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to undergo imprisonment for a period of six months. The petitioner had issued a cheque for a sum of Rs.1,35,000, which was presented by the complainant but was dishonored by the banker of the accused. The complainant issued a legal notice, and the accused denied the allegations. The trial court recorded a finding of conviction against the petitioner, which was upheld by the lower appellate court. The petitioner appealed the decision, arguing that the complainant failed to establish the existence of a legally enforceable debt and that the lower courts failed to consider the evidence led by the petitioner.
Finding of the Court:
The court found that the lower courts had failed to consider the evidence led by the petitioner and had relied solely on the presumption under Section 139 of the Negotiable Instruments Act. The court emphasized that the burden lies on the complainant to prove the existence of a legally enforceable debt and that the failure to display financial capacity to advance the alleged amount would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish the existence of consideration for the issuance of the cheque. The court concluded that the judgment of conviction suffered perversity and was thus set aside, and the accused was acquitted.
Issues: The issues in the case revolved around the presumption under Section 139 of the Negotiable Instruments Act and the burden of proof on the complainant to establish the existence of a legally enforceable debt and the financial capacity to advance the alleged amount.
Ratio Decidendi: The court emphasized that the presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the burden lies on the accused to raise a probable defense. The court also highlighted that the failure of the complainant to display financial capacity to advance the alleged amount would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish the existence of consideration for the issuance of the cheque. The court concluded that the judgment of conviction suffered perversity and was thus set aside, and the accused was acquitted.
Final Decision: The judgment of conviction dated 04.03.2021 passed by the Additional Sessions Judge, Panipat, as well as the judgment of conviction dated 17.12.2019 and order of sentence dated 19.12.2019 passed by Judicial Magistrate 1st Class, Panipat, were set aside, and the petitioner was acquitted.
JUDGMENT :
Vinod S. Bhardwaj. J.
This case has been taken up through video conferencing via Webex facility in the light of pandemic Covid-19 situation and as per instructions.
2. The instant revision petition raises a challenge to the impugned judgment dated 04.03.2021 passed in CRA No.63 of 2020 by Additional Sessions Judge, Panipat as well as the judgment of conviction dated 17.12.2019 and order of sentence dated 19.12.2019 passed in criminal complaint case bearing CIS No. NACT-2255 of 2018 under Section 138 of the Negotiable Instruments Act by the Court of Judicial Magistrate 1st Class, Panipat.
3. By virtue of the impugned judgment, the petitioner had been convicted for offences under Section 138 of the Negotiable Instruments Act, 1881 and had been sentenced to undergo imprisonment for a period of six months. Besides, the convict/petitioner had also been ordered to pay an amount of Rs.2,02,500/- as compensation to the complainant under Section 357(3) CrPC, for his suffering due to dis-honour of the cheque for an amount of Rs.1,35,000/- as well as towards loss of interest on the amount and expenses incurred in pursuing the proceedings.
4. Brief conspectus of facts culled out from the judgment of conviction passed by the Judicial Magistrate 1st Class, Panipat, shows that the petitioner (accused) is alleged to have issued a cheque bearing No.584258 dated 25.03.2018 for a sum of Rs.1,35,000/- drawn on Canara Bank, Branch Office Assandh Road, Panipat towards discharge of his liabilities. The aforesaid cheque (Ex.C-1) was presented by the complainant through his banker, however, the same was dis-honoured by the banker of the accused upon its presentation with remarks 'funds insufficient' vide return memos dated 29.03.2018, 11.04.2018 and 04.05.2018 (Exs. C-2 to C-4). Aggrieved thereof, the respondent-complainant issued a mandatory legal notice in terms of Section 138 of the Negotiable Instruments Act dated 10.05.2018 (Ex. C-5) and the postal receipt thereof was exhibited as Ex.C-6. The accused-petitioner is alleged to have not responded to the said legal notice and also did not tender the claimed amount resulting in institution of the complaint in question. Notice of accusation was served upon the petitioner on 12.04.2019, to which he pleaded not guilty and claimed trial. After considering the submissions of the respective parties, trial Court recorded a finding of conviction against the petitioner. The appeal filed by the petitioner against the judgment of conviction and order of sentence was dismissed by the Additional Sessions Judge, Panipat.
Hence, the revision petition.
5. Learned counsel for the petitioner has argued that the Courts below have failed to appreciate the evidence and have consequently convicted the petitioner, even though the petitioner had dispelled the statutory presumption under Section 139 of the Negotiable Instruments Act, 1881. Learned counsel contended that the complainant has miserably failed to establish that the cheque in question had ever been handed over by the petitioner to the complainant in discharge of any legally enforceable debt and by ignoring the total absence of evidence in this regard, the Courts below have relied solely on the presumption against the petitioner notwithstanding that the presumption was rebuttable and that upon existence of reasonable suspicion, the burden would shift and it would fall upon the complainant to prove that the issuance of instrument was in discharge of a legally enforceable debt. In support of his aforesaid argument, learned counsel has placed reliance upon the complaint instituted by the respondent-complainant wherein, the following averment is made in para No.2.
The main legal point established in the judgment is that the presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the burden lies on the accused to raise a probable defe....
The presumption under Section 139 of the NI Act that a cheque is issued for discharge of a debt or liability unless proven otherwise, and the accused's burden to raise a probable defense to rebut the....
Dishonour of cheque – Whereas prosecution must prove guilt of an accused beyond all reasonable doubt, standard of proof so as to prove a defence on part of accused is preponderance of probabilities.
Presumption under NI Act s.139 rebuttable on preponderance of probabilities by probable defence; mere denial insufficient. Complainant need not prove financial capacity unless challenged in demand no....
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
The presumption under Section 139 of the NI Act mandates that a cheque is presumed to be issued for discharge of a debt unless the accused proves otherwise.
The main legal point established is that the failure to rebut the presumption under Section 139 of the Negotiable Instruments Act can lead to conviction under Section 138 of the Act.
The presumption in favor of the complainant under the N.I. Act is rebuttable, and the standard of proof required to prove a defense in a criminal case is preponderance of probabilities.
The issuance of a cheque creates a presumption of liability under Sections 138 and 139 of the Negotiable Instruments Act, which shifts the burden to the accused to prove otherwise.
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