In a criminal trial, the onus to prove an offence lies upon the complainant/ prosecution. However, in cheque bounce cases, section 115 r/w section 139 of the Negotiable Instruments Act, 1881 (for brevity “the Act”) places the onus upon the accused to disprove the prima facie view taken by a court qua the transaction in question calls. Ergo, the law, prima facie, reflects that it is the accused who needs to disprove the alleged transaction, and the complainant doesn’t have the liability to prove the same beyond a reasonable doubt.
However, the courts have shaped the meaning, scope and interpretation of this provision in more than one obvious way. Thus, whether a complainant is required to prove the occurrence of a transaction in question has become a moot issue in cheque bounce cases.
On these lines, in this article, we shall refer the relevant provisions of the law, and various key judgments qua the liability of a complainant to prove a legal debt/transaction in question in order to understand the correct position of law.
A brief of cheque bounce cases
One of the cardinal principles of criminal law is that the burden of proof lies on the prosecution to prove the guilt of the accused. However, statutory provisions may create an exception to this basic principle.
Such divergent view from the aforesaid fundamental principle can be seen under sections 118(a) r/w section 139 of the Act. Before jumping to any conclusion, it will not be wise to proceed without referring to the aforesaid provisions of the Act.
Section 118(a) and section 139 of the Act are as follows: –
Section 118(a): –
Presumption as to negotiable instruments – Until the contrary is proved, the following presumptions shall be made: –
(a) Of consideration – that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
Section 139: –
The presumption in favour of holder –
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.
From the bare perusal of the aforesaid, it can easily be inferred that the court is bound to presume that the cheque in question is issued against a legally enforceable debt unless the same is disproved by the accused.
In such scenarios, the onus lies upon the accused to prove that the cheque(s) in question is not issued against the alleged legal transaction. As stated earlier, the said provision is different from one of the fundamental principles of a criminal trial where the complainant/ prosecution is required to prove the alleged offence.
Since the aforesaid provisions somehow enable a complainant to set the criminal trial in motion against an accused person without proving the offence of the accused beyond a reasonable doubt, thus the courts have often interpreted this provision in more than one obvious manner to avoid the misuse of this peculiar provision of law. A brief reference to some relevant case laws may allow us to comprehend the issue at hand with better clarity.
Relevant case laws
the Supreme Court in the case of ‘Rohitbhai Jivanlal Patel vs. State of Gujarat and Ors.’ (MANU/SC/0393/2019) held that the accused must prove that the alleged legal debt doesn’t exist. Furthermore, the accused doesn’t necessarily need to bring any evidence on record, he/ she can disprove the complaint from the evidence already placed on the record. The Apex Court, however, also noted that mere denial is not sufficient to meet the requirements of sections 118 and 139 of the Act.
The Apex court in the case titled K.N Beena vs. Muniyappan & Anr.[1] succinctly held that in complaint cases under section 138 of the Act, the ld. trial courts are bound to presume that the cheque is issued against the legal liability. The said presumption is indeed rebuttable. However, the accused is burdened with a liability to prove that the cheque has not been issued against the legal liability. Notably, the Supreme Court has taken an identical view in the case of “Hiten P. Dalal vs. Bratindranath Banerjee”[2].
Statement of an accused under section 313 of the CrPC
In addition to the aforesaid, it is submitted that the Apex court in the case titled “Sumeti Vij vs. M/s Paramount Tech Fab Industries”[3] held that the statement of the accused under section 313 of the CrPC is not a substantive piece of evidence to rebut the presumption, but only an opportunity to the accused to explain the case. thus, it implies that the statement of an accused under section 313 of the CrPC is not enough to rebut the presumption under section 139 of the Act.
ITR Filing/ Source of Income
A lot of times it is seen that a complainant doesn’t reflect the loan in question in his/ her ITR statements, and the said omission is often taken as a defence by the accused. Moreover, the accused often attack on the aspect that the complainant doesn’t have enough income to lend the alleged amount to the accused.
On these lines, the Delhi High Court in the case titled “Lekh Raj Sharma vs. Yash Raj Gupta[4]” held that not mentioning the transaction in the ITR records by the complainant doesn’t imply that the accused has shifted the burden of presumption under section 139 of the Act. Moreover, the High Court of Madhya Pradesh in the case of “Shrimati Ragini Gupta vs. Piyush Dutt Sharma[5]” observed that mere non filing of ITR does not prove that the complainant has no source of income.
Ergo, it can safely be gathered from the aforesaid judicial precedents that the accused must have some cogent evidence to rebut the presumption under section 139 of the Act or he can do so with the help of the evidence available on the record. However, an accused cannot walk away freely merely by denying the complainant’s case.
The other facet
It is observed that on various occasions the courts have taken a slightly different meaning of the provision as compared to the above for various reasons including the demands of peculiar facts of a given case. Thus, sans referring to those judicial precedents we may not be able to appreciate the details and the true mandate of the aforesaid legal provision.
Notably, the Supreme court in the case of “Rangappa vs. Mohan“[6] held that where an accused has raised a probable defence challenging the legal debt/ legal transaction itself then, in such cases, the complaint may not get succeeded. The scale of test is based upon the ‘preponderance of probabilities; and not on the principle of ‘beyond reasonable doubt’, despite the legal mandate of taking prima facie presumption against the accused person as per section 139 of the Act.
On these lines, the Kerala High Court in the case titled “R. Ramachandra Reddy vs. R. Malavathi”[7] held that an accused person does not need to prove his/ her case beyond a reasonable doubt, as the accused can prove his/ her defence on the basis of preponderance of probabilities. The court also noticed that merely because the accused has not replied to a legal notice, it cannot be treated as a ground to admit the case of the complainant.
The said principle is further clarified by the Andhra Pradesh High Court in the case of “Shaik Ayaz vs. Abdul Khader & Ors.”[8]. the relevant excerpt is provided herein below: –
“The Supreme Court has clarified in S. Kamala v. M.J. Vidyadharan MANU/SC/7124/2007: 2007 (5) SCC 264 that if the accused by a preponderance of evidence has discharged the burden contemplated by Section 139 of the Act, the burden would shift to the complainant to prove his case beyond a reasonable doubt without the help of Section 139 of the Act. Thus, it is primarily for the drawee to show that the cheque was issued in connection with a subsisting debt. The onus on the part of the drawer is in the nature of proof in a civil case, viz., establishing a fact by a preponderance of the evidence, whereas the complainant shall have to establish his case beyond a reasonable doubt.”
Furthermore, the Telangana High Court recently in the case of “Mohd. Mansoor Ali Nizami vs. Mohd. Ibrahim and Ors.[9]” held that the initial burden to prove the legal transaction and debt falls upon the complainant, and if the complainant fails to do so, then no presumption under section 139 of the Act against the accused can be drawn upon.
The Andhra Pradesh High Court in the case of “N. Narsamma vs. Chinna Mukkiranna and Ors.[10] :” clearly stated that the in case where an accused person denies the allegation that the cheque(s) in question was issued against a legal debt, then the complainant is bound to prove the existence of the debt/ liability in question. Further, if the complainant fails to discharge the aforesaid burden, then no presumption under section 139 of the Act can be drawn upon against the accused person.
It is submitted that section 118 and section 139 of the Act don’t provide a safe blanket to the complainant in the cases under section 138 of the Act. The complainant must prove the legal debt when the accused is able to shift the prima facie burden that lies upon him. Mere reliance upon section 139 of the Act is not in accordance with the mandate of the law.
The aforesaid submission can be seen in the cases where the Financial Capacity of the complainant is being raised/ asked for. A quick glance at such cases would clarify the aforesaid submission.
Financial capacity of the complainant
in the case of “Basalingappa vs. Mudibasappa”[11], the Apex Court observed that a complainant is bound to explain his financial capacity when the same is questioned by the accused.
Similar view is taken by the Apex court in the case titled “APX Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers & Ors.”[12]
CONCLUSION
A Perusal of the aforesaid judicial precedents may prima facie furnish two interpretations qua legal presumption under sections 119 and 139 of the Act. But the detailed and careful analysis of the aforesaid statutory provisions, and the judicial precedents demonstrate that in cheque bounce cases, the presumption, Firstly, qua the legal debt gets raised in favour of a complainant i.e., the courts shall presume that the cheque in question has been issued against a legally enforceable debt. Thereafter, it is to be seen that whether the accused person has raised a probable defence or a reasonable doubt qua the sanctity of the legal debt/ transaction in question, if the same is in affirmative, then the presumption goes in favour of the accused till the time the complainant proves the existence of the legal debt/ transaction in question, and if the complainant fails to do so, then the complaint under section 138 of the Act may not get succeeded.
Thus, in these cases, the presumption keeps on shifting from one side to the other provided the party fulfils the respective statutory mandate as discussed above. Lastly, it is submitted that this very principle has checked various frivolous cases, and also largely prohibits the accused persons to take shelter of legal technicalities to defeat the true complaint cases.
Notes:-
[1] [(2001) 8 SCC 458)]
[2] [(2001) 6 SCC 16]
[3] (Crl Appeal 292/2021)
[4] Manu/DE/1886/2015
[5] CRR 5263/ 2018; decided on 07.03.2019
[6] (MANU/SC/0376/2010)
[7] MANU/KA/0262/2022
[8] MANU/ AP/ 0758/ 2011
[9] MANU/TL/1240/2022
[10] MANU/AP/0970/2016
[11] MANU/SC/0502/2019
[12] (Crl Appeal 271/ 2020)
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Author: Advocate Lalit Ajmani, Based in New Delhi/ NCR, advocatelalitajmani@gmail.com | +91-96544 31469
Assisted by : Lakshay Chhabra – Law Student at Vivekananda Institute of Professional Studies, GGSIP University, New Delhi | chhabraindian789@gmail.com | +91-96541 87470
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