Back
SUPREME COURT OF INDIA
B.V. NAGARATHNA, AUGUSTINE GEORGE MASIH, JJ.
Sri Dattatraya – Appellant
Versus
Sharanappa – Respondent
Criminal Appeal No. 3257 of 2024, SLP (Criminal) No. 13179 of 2023
Decided On : 07-08-2024
Negotiable Instruments Act, 1881 – Section 138 read with Sections 118 and 139 – Criminal Procedure Code, 1973 – Section 378 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 419] – Dishonour of cheque – Appeal against acquittal – Liability of defence in cases under Section 138 of NI Act 1881 is not that of proving its case beyond reasonable doubt – Accused may establish non-existence of a debt or liability either through conclusive evidence that concerned cheque was not issued towards presumed debt or liability, or through adduction of circumstantial evidence vide standard of preponderance of probabilities – There existed contradiction in complaint moved by Appellant as against his cross-examination relatable to time of presentation of cheque by Respondent as per statements of Appellant – There was no financial capacity or acknowledgement in his Income Tax Returns by Appellant to the effect of having advanced a loan to Respondent – Respondent has been able to shift weight of scales of justice in his favour through preponderance of probabilities – Appellant was not able to plead even a valid existence of a legally recoverable debt as very issuance of cheque is dubious based on fallacies and contradictions in evidence adduced by parties – Where two views are possible, then this Court would not ordinarily interfere and reverse concurrent findings of acquittal – Judgment of acquittal affirmed. (Paras 20, 21, 27, 28, 29, 31 and 34)
Facts of the case:
Instant appeal is moved against the impugned Judgment dated 03.03.2023 in Criminal Appeal No. 200139 of 2019 by High Court of Karnataka at Kalaburagi whereby Single Judge affirmed acquittal of the Respondent in Complaint Case moved for offence punishable under Section 138 of Negotiable Instruments Act, 1881.
Findings of Court:
Instant appeal is dismissed and the findings of High Court in the impugned judgment dated 03.03.2023 are affirmed.
Result : Appeal dismissed.
Certainly. Based on the provided legal document, the key points are as follows:
In cases under Section 138 of the Negotiable Instruments Act, 1881, the liability of the defense is not to prove its case beyond reasonable doubt. Instead, the accused can establish the non-existence of a debt or liability either by conclusively showing that the cheque was not issued towards the presumed debt or liability, or through circumstantial evidence based on the preponderance of probabilities (!) (!) .
The presumption under Section 139 of the Negotiable Instruments Act, 1881, shifts the burden onto the accused to rebut the presumption that the cheque was issued for the discharge of a debt or liability. This presumption is rebuttable and does not require proof beyond reasonable doubt; the standard is one of preponderance of probabilities (!) (!) .
The accused can rebut the presumption by leading evidence that the cheque was not issued for a consideration or liability, or by casting doubt on the existence of the debt or liability. The rebuttal does not need to be conclusive but must make the court reasonably believe that the defence exists or is probable (!) (!) .
The issuance of a cheque and its signature being admitted can trigger a presumption under Section 139. However, if the complainant fails to prove the existence of a legally enforceable debt or liability, or if contradictions and doubts arise regarding the circumstances of issuance, the presumption can be rebutted (!) (!) .
The burden of proving the existence of a valid debt or liability lies with the complainant. If the complainant fails to establish this, or if there are contradictions or doubts about the transaction, the accused's rebuttal is deemed successful, leading to the likelihood of acquittal (!) (!) .
The court's primary role is to examine whether the evidence and circumstances create reasonable doubt about the liability. If the evidence casts doubt or creates a shadow of doubt on the case of the complainant, the accused's rebuttal is considered sufficient to rebut the presumption (!) .
The legal principles emphasize that in appeal or review, the courts generally do not interfere with concurrent findings of fact unless there is a clear perversity, failure of justice, or a fundamental error. The findings should be supported by evidence and should not be based on irrelevant or inadmissible material (!) (!) .
The court must exercise caution in challenging findings of acquittal, especially when they are well-reasoned and supported by evidence. Interference is warranted only if the findings are perverse, irrational, or if there has been a significant miscarriage of justice (!) (!) .
In the specific case discussed, contradictions in the evidence, lack of proof of the loan transaction, and doubts about the issuance of the cheque led to the conclusion that the accused successfully rebutted the presumption of liability. Consequently, the appeal against acquittal was dismissed, and the original findings were affirmed (!) (!) .
Overall, the decision underscores the importance of establishing a legally enforceable debt, the proper issuance of the cheque, and the sufficiency of evidence to rebut statutory presumptions in cases under Section 138 of the NI Act (!) (!) .
Please let me know if you need further analysis or clarification on any specific aspect.
JUDGMENT :
AUGUSTINE GEORGE MASIH, J.
1. Leave granted.
2. The instant appeal was originally preferred as a petition before this Court, which is moved against the impugned Judgment dated 03.03.2023 in Criminal Appeal No. 200139 of 2019 by the High Court of Karnataka at Kalaburagi whereby the learned Single Judge affirmed the acquittal of the Respondent in Complaint Case No. 468 of 2014 moved for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as “NI Act 1881”).
3. The factual backdrop giving rise to the present challenge is that the Appellant is the original complainant who claims to know the sole Respondent for the last six years and that he had borrowed INR 2,00,000/- (Rupees Two Lakhs only) from the Appellant on account of family necessities and accommodation. Against the said loan the Respondent issued a cheque bearing No. 015639 which was drawn on the Bank of India, as a guarantee against repayment. He was to repay the said loan amount within a period of six months thereof. An agreement to this effect was also signed between the parties.
4. However, since the Respondent failed to repay the loan despite repeated requests, the Appellant presented the concerned cheque for encashment on 22.10.2013, but nevertheless, as per the Bank Memo dated 24.10.2013, the cheque was dishonoured on account of “insufficient funds.”
5. Aggrieved from the said dishonour of cheque, a Demand Notice dated 31.10.2013 was sent by the Appellant to the Respondent, whereby, the Counsel on behalf of the Appellant alleged that the Respondent had intentionally cheated him and had not made any efforts to discharge his liability. Accordingly, the Respondent was said to have committed offences punishable under Section 138 of the NI Act 1881 and Section 420 of the Indian Penal Code, 1860 (hereinafter referred to as “IPC 1860”).
6. Thereupon, the Respondent moved a Reply Notice dated 11.11.2013 whereby he claimed that the accusations made by the Appellant are false and bereft of pertinent details of the loan transaction, inter-alia, the date and time of advancement of the said debt, which as claimed, was never advanced.
7. Unsatisfied with the response of the Respondent through the said Reply Notice, Appellant moved a Private Complaint No. 991 of 2013 under Section 200 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “CrPC 1973”). The said complaint came to be registered as CC/468/2014 before Judicial Magistrate First Class at Gulbarga. As part of the proceedings before the Trial Court, the Appellant examined himself as PW-01, while the Respondent examined himself as DW-01. However, the latter did not mark any documents from his side. It was the Respondent’s plea that the concerned cheque was issued in favour of one Mr. Mallikarjun in the year 2012 for security purposes, however, he did not return the same to the Respondent, and instead had left the village. While dealing with the said contention, the Trial Court observed that the Respondent had failed to explain as to how the cheque landed in the hands of the Appellant, and for what purpose was the cheque issued to Mr. Mallikarjun.
8. It was also revealed as part of the statement during cross-examination of the Appellant that the cheque was originally, not given to the Appellant as security cheque. Instead, the same was allegedly given to the Appellant after the Respondent had thereby failed to repay his liability as existing against the Appellant after a period of six months. The Court further observed that the Agreement marked by the Appellant to assist his case does not include signature of the Respondent as against the terms of the agreement, but a signature is made by the Respondent on the stamp paper itself, and the same is not sustainable in the eyes of law. The Court also went on to scrutinize the Income Tax Returns of the Appellant, from where it was revealed that the Appellant failed to declare the alleged loan transaction as part
The issuance of a cheque carries a presumption of consideration, which is rebuttable by the accused. Failure to prove the non-existence of a debt results in liability under Section 138 of the NI Act.
(1) Dishonour of cheque – Proceedings under Section 138 of N.I. Act are quasi-criminal in nature and principles which apply to acquittal in other criminal cases are not applicable in cases instituted....
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 in the judgment is the rebuttable nature of the presumption in favor of the holder of a cheque under Sections 118 and 139 of the N.I. Act, emphasizing the burden of p....
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.
The presumption under Section 139 of the Negotiable Instruments Act is mandatory, placing the burden on the accused to rebut the existence of a legally enforceable debt.
Presumption under Section 139 of the Negotiable Instruments Act requires the accused to present credible evidence to rebut the holder's claim of legal liability regarding the cheque issued.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
