Ker HC | Any acknowledgment voluntarily signed towards some payment, attracts presumption under S. 139 of NI Act; acquittal set aside

Kerala High Court: Instant appeal was contemplated against acquittal order of the accused under Section 138 of the Negotiable Instruments Act, 1881 by a Single Judge Bench of N. Anil Kumar, J.

The accused borrowed a certain amount from the complainant and also issued a cheque towards repayment in the name of the complainant. Subsequently, the cheque was dishonored and the reason cited was ‘insufficient funds’. Complainant advanced his argument on the basis of the notice which he served upon the accused earlier after the cheque was dishonored. It is further contended that the accused, however, did not reply to the notice nor did he pay the cheque amount to the complainant. The complainant filed a criminal complaint under Section 138 of the NI Act before the Court below.

The counsel for the complainant, K. Babu and Johnson Gomez submitted that on service of summons by the trial Court, the accused appeared and did not plead guilty. The accused cited that he had borrowed a sum of Rs 10,000 from the father of the complainant. He further contended that the said amount was returned. That apart, he contended that the cheque leaves which he gave as security were not returned when the amount was paid back. According to him, he had no account with the said bank of which the complainant had presented the unpaid cheque. It was the father of the complainant who introduced him in the said Bank for the purpose of opening an account there. In support of his contentions, he produced his passbook and the other relevant evidences. The trial Court on the basis of the evidence and on the testimony of the witnesses accepted the contention of the accused and acquitted him, therefore.

The Court observed that in order to determine the question whether offence punishable under Section 138 of the Act was made out against the accused, it was foremost necessary to examine the Penal provision of Section 138 of the Act and the presumptions to be raised as envisaged by the provisions of Sections 118 and 139 of the Act. It further stated that in the trial under Section 138, a presumption was to be made that every negotiable instrument was made or drawn for consideration and that it was executed for the discharge of debt or liability once the execution of negotiable instrument was either proved or admitted. When the complainant discharged the burden to prove that the cheque was executed by the accused, the rules of presumptions under Sections 118 and 139 were very much available to the complainant and the burden shifted on the accused. However, this presumption was rebuttable. Under the circumstances, it was the duty of the accused before the court by adducing that the cheque was not supported by consideration and that there was no debt or liability to be discharged as alleged.

An appeal was allowed and the judgment of the trial court was set aside the Court held that, “the trial court patently erred in holding that the burden was on the complainant to prove that he had advanced the loan and the blank cheque was given to him in repayment of the same, the finding of the trial court that the case of the complainant is not proved beyond reasonable doubt is perverse.”[Manesh Varghese v. Sainulabudeen, 2019 SCC OnLine Ker 2029, decided on 25-06-2019]

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