Standard Of Proof For Accused To Rebut Presumption U/S 139 NI Act Is That Of 'Preponderance Of Probabilities': Jharkhand High Court

The observation came from Justice Deepak Roshan:

"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. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is now a settled position that when an accused has to rebut the presumption under section 139, 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 doubt about the existence of a legally enforceable debt or liability, the prosecution fails."

The observation was made while adjudicating upon a revision application, directed against the judgment of Principal Sessions Judge whereby the judgment of conviction of the Petitioner under Section 138 of NI Act was affirmed.

Counsel for opposite party submitted that a friendly loan of Rs.7,20,000/- was taken by the accused/petitioner with assurance that he will return the money within two years and he also issued a cheque, which was dishonoured.

The Petitioner submitted that a serious doubt is casted on the claim of the complainant that the cheque was issued in discharge of outstanding debt and liability as the complainant, though in the complaint petition claimed to have advanced loan to the petitioner through account payee cheques and cash, but in his deposition he admitted that not a single farthing was paid through account-payee cheque.Further, it was contended that the complainant has no document regarding payments claimed to have been made to the petitioner through cash.

After hearing both the sides and perusing documents on record, the court noted that Section 139 of Negotiable Instruments Act clearly states that it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.

Court relied on the Apex Court judgment in T. Vasanthakumar V. Vijaykumari wherein it was held that since the cheque as well as the signature has been accepted by the accused-respondent, the presumption under Section 139 would operate. Thus, the burden was on the accused to disprove the cheque or the existence of any legally recoverable debt or liability.

Court noted that the petitioner admitted that cheque in question belongs to him and they bear his signature. When the drawer has admitted the issuance of cheque as well as the signature present therein, the presumption envisaged under Section 118 read with Section 139 of NI Act would operate in favour of the complainant. The said provisions lays down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and there under the court shall presume that the instrument was endorsed for consideration. Further, in absence of contrary evidence on behalf of the petitioner, the presumption under section 118 and 139 of the NI Act, goes in favour of the complainant.

At the end the court observed that the factual findings goes to show that all the requirements to establish a case under Section 138 of the N.I. Act has been fulfilled by the complainant.

"At the cost of repetition, the original cheque was placed before the trial court and the same was exhibited. The cheque as well as the signature has been accepted by the petitioner. Thus, the presumption under Section 139 would operate and the wrong number of the cheque in the complaint and/or in the legal notice would not make any difference and has to be taken as typographical error."

In view of the above, the court was of view that no interference in trial order is required.

"However, so far as compensation amount and sentence is concerned, the learned Appellate Court has sustained the compensation amount of Rs.9 lakhs and sentenced the petitioner to undergo S.I. for a period of 1 year."

Accordingly the petition was disposed of.