2010 Supreme(SC) 428

2010 (4) Supreme 169
SUPREME COURT OF INDIA
CJI, K.G. Balakrishnan, P. Sathasivam and J.M. Panchal, JJ.
Rangappa — Appellant
versus
Sri Mohan — Respondent
Criminal Appeal No. 1020 of 2010
[Arising out of SLP (Crl.) No. 407 of 2006]
Decided on : 7-05-2010

IMPORTANT POINTS
1. When an accused has to rebut the presumption under Section 139 of NI Act, the standard of proof for doing so is that of ‘preponderance of probabilities’.
Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail.
2. Presumption mandated by Section 139 of NI Act does indeed include the existence of a legally enforceable debt or liability.

Headnote:Negotiable Instruments Act,1881- Sections 138,139- Complaint alleging dishonour of cheque filed by respondent-complainant against appellant accused-Appellant-accused raised a defence that cheque in question was a blank cheque bearing his signature which had been lost and that it had come into the hands of complainant who had then tried to misuse it- The accused’s case was that there was no legally enforceable debt or liability between parties since he had not asked for a hand loan as alleged by complainant-Trial judge found in favour of accused by taking note of some discrepancies in complainant’s version and acquitted appellant- On appeal High Court reversed trial court’s decision and recorded a finding of conviction against appellant-Appeal- When an accused has to rebut presumption under Section 139, standard of proof for doing so is that of ‘preponderance of probabilities’-Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail-Instantly accused did not raise a probable defence-Defence of loss of a blank cheque was taken up belatedly and accused had mentioned a different date in the ‘stop payment’ instructions to his bank-Furthermore, instructions to ‘stop payment’ had not even mentioned that cheque had been lost-A perusal of trial record also showed that accused appeared to be aware of fact that cheque was with complainant- The very fact that accused had failed to reply to statutory notice under Section 138 of the Act led to the inference that there was merit in complainant’s version- Apart from not raising a probable defence, appellant-accused was not able to contest the existence of a legally enforceable debt or liability-The fact that accused had made regular payments to complainant in relation to construction of his house did not preclude possibility of complainant having spent his own money for the same purpose- There was a slight discrepancy in complainant’s version, in so far as it was not clear whether accused had asked for a hand loan to meet the construction-related expenses or whether complainant had incurred said expenditure over a period of time- Either way, complaint disclosed the prima facie existence of a legally enforceable debt or liability since complainant had maintained that his money was used for the construction-expenses- Since accused did admit that signature on the cheque was his, statutory presumption was raised and the same had not been rebutted even with regard to the materials submitted by complainant-No reason to interfere with order of High Court- Appeal disposed off. (Paras 14 to 16)

       Facts of the Case :

       AComplaint alleging dishonor of cheque was filed by respondent-complainant against appellant accused herein in the instant case. Appellant-accused raised a defence that cheque in question was a blank cheque bearing his signature which had been lost and that it had come into the hands of complainant who had then tried to misuse it. The accused’s case was that there was no legally enforceable debt or liability between parties since he had not asked for a hand loan as alleged by complainant.Trial judge found in favour of accused by taking note of some discrepancies in complainant’s version and acquitted appellant. On appeal High Court reversed trial court’s decision and recorded a finding of conviction against appellant.

       2.Present appeal has been filed against said order of High Court.

       Findings of the Court :

       Instantly accused did not raise a probable defence. Defence of loss of a blank cheque was taken up belatedly and accused had mentioned a different date in the ‘stop payment’ instructions to his bank .Furthermore, instructions to ‘stop payment’ had not even mentioned that cheque had been lost. A perusal of trial record also showed that accused appeared to be aware of fact that cheque was with complainant. The very fact that accused had failed to reply to statutory notice under Section 138 of the Act led to the inference that there was merit in complainant’s version. Apart from not raising a probable defence, appellant-accused was not able to contest the existence of a legally enforceable debt or liability.The fact that accused had made regular payments to complainant in relation to construction of his house did not preclude possibility of complainant having spent his own money for the same purpose. There was a slight discrepancy in complainant’s version, in so far as it was not clear whether accused had asked for a hand loan to meet the construction-related expenses or whether complainant had incurred said expenditure over a period of time. Either way, complaint disclosed the prima facie existence of a legally enforceable debt or liability since complainant had maintained that his money was used for the construction-expenses. Since accused did admit that signature on the cheque was his, statutory presumption was raised and the same had not been rebutted even with regard to the materials submitted by complainant. No reason was found to interfere with order of High Court. Appeal was disposed of