R. Tamilarasa Vs T.P. Rameshkumar (Madras High Court)
Standard of proof for rebutting the presumption is that of preponderance of probabilities in Negotiable Instruments Act
Conclusion: The Hon’ble Madras High Court held that it is settled law that in the case under Section 138 of NI Act, Section 139 of NI Act provides that the Court shall presume that the holder of a cheque received the cheque of the nature referred into Section 138 of NI Act, for the discharge, in whole or in part or any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received.
Facts: In present facts, the criminal revision is directed as against the judgment passed in C.A.No.22 of 2018 dated 16.08.2018 on the file of the Fast Track Mahila Judge, Namakkal, thereby reversed the findings in S.T.C.No.22 of 2017 dated 13.02.2018 on the file of the Judicial Magistrate (Fast Track), Tiruchengode, thereby acquitted the petitioner for the offence under Section 138 of Negotiable Instruments Act. The petitioner is an accused in the complaint lodged by the respondent for the offence under Section 138 of Negotiable Instruments Act. According to the respondent, on 17.03.2015, the petitioner borrowed a sum of Rs.7 Lakhs for his urgent need and agreed to repay the same with interest at the rate of Rs.1.50 per month per hundred and he also executed a promissory note in favour of the respondent. The petitioner bad been paying the interest regularly to the respondent. When the respondent asked for principal payment, the petitioner issued a post dated cheque on 15.07.2016 in order to discharge the principal amount of Rs.7 lakhs and thereafter, the petitioner received back the promissory note which was already executed by him. When the said cheque was presented for collection and the same has been returned for the reason “Payment Stopped by the Drawer”. After causing statutory notice to the petitioner the respondent lodged a complaint.
The trial Court found the petitioner not guilty for the offence under Section 138 of NI Act and acquitted the petitioner. Aggrieved by the same the respondent preferred an appeal and the first Appellate Court reversed the findings of the trial Court and found the petitioner guilty for the offence under Section 138 of NI Act and sentenced him to undergo one year simple imprisonment and imposed fine of Rs.5,000/- in default to undergo three more months simple imprisonment along with compensation of Rs.1 lakh.
The Hon’ble High Court relied upon the judgment reported in 2022 SCC OnLine SC 302 in the case of Tedhi Singh Vs. Narayan Bass Mehant, in which the Hon’ble Supreme Court of India held that in the case under Section 138 of the NI Act, the complainant need not show in the first instance that he had capacity to lend loan, unless a case is set up in the reply notice to the statutory notice, that the complainant did not have the wherewithal, it cannot be expected the complainant to initially lead evidence to show that he had the financial capacity. However, the accused had the right to demonstrate that the complainant in a particular case did not have the capacity and therefore, the case of the accused is acceptable which he can do by producing independent materials, namely, by examining his witnesses and producing documents. It is also open to him to establish the very same aspect by pointing out the materials produced by the complainant himself. Further he must establish the case that the complainant has no source of income even in the statement given under Section 313 of Cr.P.C.
Further, it was observed that it is settled law that in the case under Section 138 of NI Act, Section 139 of NI Act provides that the Court shall presume that the holder of a cheque received the cheque of the nature referred into Section 138 of NI Act, for the discharge, in whole or in part or any debt or other liability. This presumption, however, is expressly made subject to the position being proved to the contrary. In other words, it is open to the accused to establish that there is no consideration received. It is in the context of this provision that the theory of probable defence has grown.
Therefore, it was observed that it is only an after thought that the petitioner raised so many grounds in the present petition without any substance. Further, the Hon’ble Supreme Court of India, had repeatedly held that once the execution of cheque is admitted, Section 139 of NI Act mandates a presumption that the cheque was for the discharge of any debt or other liability. Further, the said presumption is rebuttable in nature and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. In order to rebut the presumption, it is open for the accused to rely on evidence let by him or he can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. The petitioner herein failed to rebut the same by any oral or material evidence. Mere denial of issuance of cheque would not amount to probable defence and the standard of proof for rebutting the presumption is that of preponderance of probabilities.
Accordingly, the criminal revision was dismissed.
