Read Order: Gurbir Singh v. Raj Kaur

Monika Rahar

Chandigarh, April 8, 2022: While dealing with a cheque bounce case, the Punjab and Haryana High, after undertaking an indebt analysis of the concerned provisions, held that presumption enshrined under Section 139 of the Negotiable Instrument Act is not absolute and is rather a rebuttable presumption, and this presumption against the accused is discharged the moment an accused raises reasonable suspicion with respect to the due execution of the cheque. 

The Bench of Justice Vinod S. Bhardwaj also asserted, 

“It is not incumbent upon an accused to lead evidence and that even the act of subjecting the complainant to cross-examination on such aspects can be taken as sufficient grounds to shift the burden upon the complainant to establish that the debt in question was duly advanced to the drawer of the cheque.”

Also, it was held that a negative burden cannot be cast upon the respondent to prove his innocence and that on part of the complainant, apart from proving his financial capacity to advance the load in question, it is also to be proved that the amount in question was actually advanced

Essentially, the case of the complainant was that he lent a certain sum of money as a loan to the accused petitioner in front of two witnesses for carrying out repair work on her (accused) house. The complainant also claimed to have executed an agreement with the accused wherein the accused admitted to having borrowed the sum in question. 

When the cheque issued by the complaint was returned for ‘insufficient funds’, a complaint under the 138 NI Act was filed by the complainant. Before the Trial Court, the appellant appeared as CW-1 and did not lead any further evidence, while no evidence was led by the accused-respondent apart from the cross-examination of the appellant. Upon consideration, the Chief Judicial Magistrate, Tarn Taran (the Trial Court) held that the complainant failed to prove any legal debt or liability against the respondent and hence in absence of any legally enforceable debt, there was no occasion for the respondent to execute any instrument towards discharge of the same. Thus, the present appeal was filed against the impugned order of the Trial Court. 

The case of the appellant/complainant primarily was that there was no denial of the signature on the cheque and as such there was a presumption against the accused. It was further contended that the burden could not be shifted by the Court upon the appellant/complainant to establish that any amount was due once the signatures on the cheque (of the accused) were not in dispute. It was vehemently argued that the respondent was a signatory to the cheque and that the said cheque was dishonoured for want of ‘sufficient funds’. 

On the other hand, the accused-respondent’s case was that there was no transaction ever between the complainant and the accused and that the cheque in question was handed over by her to Priya Kapoor (on the alleged witnesses) towards a chit fund committee and the same was not in discharge of any liability. It was argued that the said cheque was misused by Priya Kapoor in connivance with the appellant.

After considering the rival submission, the Court, at the very outset, listed out the facts claimed by the complainant, which were that the amount in question was advanced in cash in the presence of two witnesses; and that there was an agreement in this regard executed between the parties. 

The Court then went on to analyse the legal governing the presumption under the NI Act. In this respect, the Court opined that the presumption enshrined under Section 139 of the Negotiable Instrument Act is not absolute and is rather a rebuttable presumption, and this presumption against the accused is discharged the moment an accused raises reasonable suspicion with respect to the due execution of the cheque. Further, the Court added that it is not incumbent upon an accused to lead evidence and that even the act of subjecting the complainant to cross-examination on such aspects can be taken as sufficient grounds to shift the burden upon the complainant to establish that the debt in question was duly advanced to the drawer of the cheque. 

Once such suspicion is created by an accused, the burden of proof would thereafter shift upon the complainant to prove that the cheque was executed in the discharge of a pre-existing liability/legally enforceable debt, added Justice Bhardwaj, while holding that the existence of a legally enforceable debt is a pre-requisite for issuance of a cheque. Additionally, the Court also opined that it is a settled proposition of law that presumption under Section 139 of the Negotiable Instruments Act is a presumption of law, as distinguished from a presumption of fact, such a presumption is a rebuttable presumption and the drawer of the cheque may dispel the same

“The rebuttal does not have to be conclusively established, but such evidence must be adduced in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the ‘prudent man’”, held the Court. 

Lastly, on the aspect of presumption, the Court opined that in order to rebut the statutory presumption, an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial; the accused may adduce direct evidence to prove that the instrument in question was not supported by consideration and that there was no debt or liability to be discharged by him. 

The Court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated, and at the same time, the Court added that bare denial of the passing of the consideration and existence of debt would not serve the purpose of the accused. Thus, the Court held that to disprove the presumption, an accused should bring on record such facts and circumstances, upon consideration of which, the Court may either believe that the consideration and debt did not exist or that their non-existence was so probable that a prudent man, would under the circumstances of the case, act upon the plea that they did not exist. 

In light of these aspects, the Court opined that the failure of the complainant to display his financial capacity to advance the amount alleged to have been lent would shift the burden on the complainant to prove his financial capacity to lend the money as well as the other circumstances to establish the existence of consideration for issuance of a cheque. 

Moving on, since the Court was dealing with an appeal against an order of acquittal, the Court considered the legal position governing the power of the High Court in an appeal against acquittal. 

Regarding this issue, the summarized that the powers of the High Court in dealing with criminal appeals are equally wide whether the appeals are against conviction or acquittal; in dealing with such appeals, the High Court bears in mind that the presumption of innocence is strengthened; that the interference of the High Court in an appeal against the order of acquittal would be justified only if there are “very substantial and compelling reasons to do so”.

Coming to the factual position of the case, the Court opined that it was incumbent upon the complainant to examine the said witness in support of his contention (issuance of cheque in the presence of two witnesses and execution of an agreement). The Court held that a negative burden cannot be cast upon the respondent to prove his innocence. 

Besides, the Court added that the complainant did not produce his books of accounts and relevant material to show that the amount in question was ever advanced to the respondent-accused, because the financial capacity of a person to pay would not necessarily mean that the amount in question had been advanced to an accused. 

The obligation is upon the complainant to establish, when a question is raised about the ability and the fact of having advanced a loan, that not only did the complainant have the financial capacity to advance the amount claimed to have been advanced but also that such an amount was actually advanced, asserted Justice Bhardwaj. 

In light of the aforesaid discussion, the Court came to the conclusion that the complainant failed to establish the same by any cogent and convincing evidence; all the material facts already stand examined by the Trial Court; it cannot be said that the finding so recorded by the Trial Court is perverse or suffers from legal infirmity or impropriety or that the conclusion is so drawn by the Trial Court is not tenable upon reading of such evidence. 

Hence, the appeal was dismissed. 

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