By Harpreet Kaur Advocate
CASE TITLE: Vijay v. Laxman
CITATION: 2013(3) SCC 86
BENCH: J. T.S. Thakur & J. Gyan Sudha Misra
FACTS
The accused had borrowed a sum of L 1,15,000/- from the complainant for repayment whereof the accused is said to have issued a cheque for an equal amount payable on the Vikramaditya Nagrik Sahkari Bank Ltd. Fazalapura, Ujjain. The cheque when presented to the bank was dishonoured for “’insufficient funds”. The accused having failed to make any payment despite statutory notice being served upon him was tried for the offence punishable under the provision mentioned above. Both the courts, Trial Court and High Court have found the accused guilty and sentenced him to undergo imprisonment for a period of one year besides payment of L 1,20,000/- towards fine.
In the defence accused said that he is a Milk Vendor who supplied milk to the father of the complainant who runs a dairy farm. The accused claimed that according to the prevailing practice he received an advance towards the supply of milk for a period of one year and furnished security by way of a cheque for a sum of L 1,15,000/-. When the annual accounts between the accused-respondent and the dairy owner-father of the complainant was settled, the accused demanded the return of the cheque to him. The dairy owner, however, avoided return of cheque promising to do so some other day. Since the cheque was not returned to the accused despite demand even on a subsequent occasion, an altercation took place between the two leading to the registration of a first information report against the father of the complainant with the jurisdictional police. On the very following day after the said altercation, the cheque which the respondent was demanding back from the father of the complainant was presented for encashment to the bank by the complainant followed by a notice demanding payment of the amount and eventually a complaint under Section 138 against the accused. The accused, thus, admitted the handing over of the cheque in favour of the complainant but denied that the same was towards repayment of any loan.
OBSERVATIONS OF SUPREME COURT
The Supreme Court observed that “In the first place the story of the complainant that he advanced a loan to the respondent-accused is unsupported by any material leave alone any documentary evidence that any such loan transaction had ever taken place. So much so, the complaint does not even indicate the date on which the loan was demanded and advanced. It is blissfully silent about these aspects thereby making the entire story suspect. We are not unmindful of the fact that there is a presumption that the issue of a cheque is for consideration.
Sections 118 and 139 of the Negotiable Instruments Act make that abundantly clear. That presumption is, however, rebuttable in nature. What is most important is that the standard of proof required for rebutting any such presumption is not as high as that required of the prosecution. So long as the accused can make his version reasonably probable, the burden of rebutting the presumption would stand discharged. Whether or not it is so in a given case depends upon the facts and circumstances of that case. It is trite that the courts can take into consideration the circumstances appearing in the evidence to determine whether the presumption should be held to be sufficiently rebutted. The legal position regarding the standard of proof required for rebutting a presumption is fairly well settled by a long line of decisions of this Court.”
In the case of M.S. Narayana Menon v. State of Kerala, 2006(3) R.C.R.(Criminal) 504, while dealing with a case under Section 138 of the Negotiable Instruments Act, 1881, Supreme Court held that “the presumptions under Sections 118(a) and 139 of the Act are rebuttable and the standard of proof required for such rebuttal is preponderance of probabilities and not proof beyond reasonable doubt.”
Also, in Hiten P. Dalal v. Bratindranath Banerjee, 2001(3) R.C.R. (Criminal) 460 Supreme Court compared evidentiary presumptions in favour of the prosecution with the presumption of innocence in the following terms :
“22… Presumptions are rules of evidence and do not conflict with the presumption of innocence, because by the latter all that is meant is that the prosecution is obliged to prove the case against the accused beyond reasonable doubt. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless the accused adduces evidence showing the reasonable possibility of the non-existence of the presumed fact.
- In other words, provided the facts required to form the basis of a presumption of law exists, no discretion is left with the Court but to draw the statutory conclusion, but this does not preclude the person against whom the presumption is drawn from rebutting it and proving the contrary.”
The Negotiable Instruments Act incorporates two presumptions in this regard: one containing in Section 118 of the Act and other in Section 139. Section 118 (a) reads as under :-
- 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 of the Act reads as under :-
- 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.
Supreme Court in the case of P. Venugopal v. Madan P. Sarathi, 2009(1) R.C.R.(Criminal) 243 has held that “under Sections 139, 118 (a) and 138 of the N.I. Act existence of debt or other liabilities has to be proved in the first instance by the complainant but thereafter the burden of proving to the contrary shifts to the accused. Thus, the plea that the instrument/cheque had been obtained from its lawful owner or from any person in lawful custody thereof by means of an offence or fraud or had been obtained from the maker or acceptor thereof by means of an offence or fraud or for unlawful consideration, the burden of disproving that the holder is a holder in due course lies upon him.”
DECISION
Supreme Court held that “In the totality of the above circumstances, the High Court was perfectly justified in its conclusion that the prosecution had failed to make out a case against the accused and in acquitting him of the charges. With these observations in elucidation of the conclusion drawn by my worthy colleague, I agree that the appeal fails and be dismissed.”
Picture Courtesy: http://www.pathlegal.in/Landmark-Judgment-:–Section-139-of-the-N.I.-Act–blog-1110969