Summary
The Supreme Court upheld concurrent findings acquitting the drawer of a dishonoured cheque under Section 138 of the NI Act. The complainant contradicted himself on when and why the cheque was given, could not say when the loan was advanced, had not shown the loan in his income tax returns, and could not explain how a cheque the accused said he gave to a third person reached him. The Court held that the accused had rebutted the Section 139 presumption on a preponderance of probabilities and that no perversity justified interfering with the acquittal.
Issues
- Whether the accused rebutted the presumption under Section 139 of the NI Act, despite admitting his signature on the cheque.
- When the Supreme Court will interfere with concurrent findings of acquittal.
Provisions considered
- Section 138, Negotiable Instruments Act, 1881The Court set out the ingredients of the offence: a cheque issued towards a legally enforceable debt or liability, presented within validity, returned unpaid, a demand notice, and failure to pay within 15 days. A cheque originally given as security can also found a prosecution. (¶¶ 12, 13, 14, 15)
- Section 142(b), Negotiable Instruments Act, 1881Read with Section 138: the cause of action arises only on the drawer's failure to pay within 15 days of receiving notice, and the complaint must be filed within one month thereafter. (¶¶ 14, 16)
- Section 143, Negotiable Instruments Act, 1881Prescribes summary trial for Section 138 cases; the Court observed that courts should take a liberal approach to an accused's attendance and avoid non-bailable warrants at the first instance. (¶ 17)
- Sections 118 and 139, Negotiable Instruments Act, 1881Both raise rebuttable presumptions of consideration and of receipt of the cheque in discharge of a debt or liability. Once triggered, for example by an admitted signature, the onus shifts to the accused, who may rebut on a preponderance of probabilities, including by relying on the complainant's own material. (¶¶ 18, 19, 20, 21, 22, 25, 26, 28, 29)
- Section 140, Negotiable Instruments Act, 1881Bars the defence that the drawer had no reason to believe the cheque would be dishonoured, making mens rea immaterial in Section 138 prosecutions. (¶¶ 23, 24, 25)
- Article 21, Constitution of IndiaGiven the liberty principle, concurrent acquittals are ordinarily not disturbed unless there is blatant perversity or compelling reason. (¶ 31)
Held
- Section 139 is a reverse onus clause. Once the complainant prima facie establishes the case, as where the accused admits signing the cheque, the burden shifts to the accused, but only to rebut the presumption on a preponderance of probabilities, not beyond reasonable doubt. The accused may do so by direct evidence or by circumstances, and need not lead new evidence: he may rely on the complaint, the demand notice, the complainant's evidence at trial, his own reply notice and his Section 313 statement. (¶¶ 19, 20, 21, 22, 26)
- On the facts, the presumption did not avail the complainant, and the accused had rebutted it. The complainant contradicted himself between the complaint and his cross-examination on whether the cheque was given as security when the loan was advanced or later, when repayment was demanded. He could not show when the loan was given or his capacity to lend, had not reflected it in his income tax returns, and did not explain how a cheque allegedly given to a third person reached him. (¶¶ 27, 28, 29)
- Where an accused questions the complainant's financial capacity to advance the loan, the complainant must discharge that by cogent evidence; the High Court's finding to this effect was affirmed. (¶ 30)
- The double presumption of innocence that follows concurrent acquittals calls for extra caution. The Supreme Court will not ordinarily interfere where two views are possible, but will do so for perversity: ignoring relevant or relying on irrelevant material, findings against the weight of evidence or defying logic, a wrong approach to rebuttal of a legal presumption, a manifest error of law, or an acquittal resting on exaggerated benefit of doubt. (¶ 31)
- The concurrent findings here rested on a detailed appraisal of the evidence and disclosed no perversity, so no interference was warranted. (¶¶ 32, 33)
Result
Appeal dismissed; the High Court's judgment affirming the acquittal of the respondent under Section 138 of the NI Act upheld.