Read Order: Santosh Devi Tyagi v. State of Haryana & Another 

Monika Rahar

Chandigarh, May 26, 2022: In a cheque dishonour case, the Punjab and Haryana High Court has held that while an Appellate Court has full power to review, re-appreciate and reconsider the evidence upon which the order of acquittal is founded, it is equally true that there is a double presumption in favour of the innocence of the accused.

Therefore, the Bench of Justice Jasjit Singh Bedi added that if two reasonable conclusions were possible on the basis of the evidence on record, the Appellate Court should not disturb the finding of acquittal recorded by the Trial Court, merely, because the Appellate Court could have arrived at a different conclusion than that of the Trial Court.

It was also held that its true that the source of funds lent may not have to be explained in all circumstances, but where an oral explanation is furnished by the complainant, which could have been backed up with documentary evidence then in the absence of bringing forth the said documentary evidence, the accused would be able to rebut the presumption of there being a legally enforceable debt for which the cheque had been issued. 

The applicant/appellant filed the present application for leave to appeal against the order of acquittal of the Trial Court whereby the accused-respondent was acquitted of the charges under Sections 138 and 142 of the Negotiable Instruments Act. The accused allegedly borrowed a sum of Rs. 8,50,000/- from the later (complainant) for domestic purposes and for paying off a bank loan, with a promise to return the same in two months. 

After two months, the accused issued a cheque for a sum of Rs.8,50,000/- in order to discharge her legal liability, but the same was dishonoured for insufficiency of funds. Therefore, the afore-said complaint for insufficiency of funds was lodged. 

The Trial Court, after considering the evidence placed before it, acquitted the accused. 

The counsel for the applicant/appellant contended that since the signatures of the accused on the cheque were admitted, a statutory presumption arose that the cheque was issued in the discharge of a legally enforceable debt and the accused was unable to rebut that presumption and therefore, the judgment of acquittal was liable to be set aside. It was also contended that the source of funds used to advance the loan to the accused by the complainant was not required to be proved. 

Further, the Counsel submitted that the defence of the accused that she handed over the cheque as a security to the brother of the complainant namely Mohan Lal in the absence of any other evidence was not enough to rebut the statutory presumption in favour of the appellant/complainant.

After considering these submissions, the Court reiterated (from the law laid down by the Supreme Court) that the presumption under the provisions of the NI Act being rebuttable, the onus is on the accused to raise a probable defence; the accused can either show that the consideration and debt did not exist or that under the particular circumstances of the case, such non-existence was so probable that a prudent person ought to suppose that no consideration and debt existed.

Further, it was restated that specific evidence in defence in this regard can be lead by the accused and he can also rely on the cross-examination of the complainant and his witnesses to rebut the said presumption and it is not necessary for him (accused) to come in the witness box to support his defence as the standard of proof for rebutting the presumption is that of preponderance of probabilities. 

Applying this to the present case, the Court noted that here, though the accused admitted the signatures on the cheque, the complainant/appellant failed to prove the existence of a legally enforceable debt. Also, the Court noted that the complainant was unable to place on record her bank statement to corroborate her plea that she withdrew the amount lent to the accused, from her account. Further, to prove her financial capacity, the complaint explained in her cross-examination that she procured the amount lent by selling her shares, but the Court was of the opinion that she did not have a D-MAT account and was not an income tax assessee. 

Thus, in this regard the Court opined that while, it is true that the source of funds used to advance a loan may not have to be explained in all circumstances, but where an oral explanation is furnished by the complainant, which could have been backed up with documentary evidence then in the absence of bringing forth the said documentary evidence, the accused would be able to rebut the presumption of there being a legally enforceable debt for which the cheque had been issued. 

Also, noticed was the fact that the existence of a friendly relationship between the parties was highly improbable since the families of both the parties were in litigation with each other and thus the lending of the money in question was also unlikely. 

Thus, the Court was of the opinion that the accused was able to rebut the presumption of existence of a legally enforceable debt from the evidence/cross-examination of the complainant herself. 

As regards the legal position in an appeal against acquittal and the scope of interference called for, the Court, after referring to a plethora of precedents, held that while an Appellate Court has full power to review, re-appreciate and reconsider the evidence upon which the order of acquittal is founded, it is equally true that there is a double presumption in favour of the innocence of the accused, firstly on account of the presumption of innocence available to an accused and secondly on account of the fact that the competent Court has acquitted the accused and therefore, if two reasonable conclusions were possible on the basis of the evidence on record, the Appellate Court should not disturb the finding of acquittal recorded by the Trial Court, merely, because the Appellate Court could have arrived at a different conclusion than that of the Trial Court.

However, the Bench added that where the judgment appealed against is totally perverse and the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant or inadmissible material, then the Appellate Court would be well within its powers to interfere with the said findings and set them aside.

Therefore, in light of the above, the Court opined that the respondent-accused was able to rebut the presumption that the cheque was issued in the discharge of a legally enforceable debt and the view taken by the Trial Court while acquitting the accused was a reasonable view based on the evidence on the record. Accordingly, the appeal was dismissed. 

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