Despite Dishonour of Cheque, Accused Acquitted of Offence under S.138 of Negotiable Instruments Act, 1881

Despite Dishonour of Cheque, Accused Acquitted of Offence under S.138 of Negotiable Instruments Act, 1881

In another useful judgment, the accused was acquitted of offence under S.138 of NI Act. It was held that the restriction on the power of Appellate Court in a petition seeking leave to appeal against order of acquittal in regard to other offence does not apply with same vigor in the offence under NI Act which entails presumption against the accused.

It is well settled that once the execution of the cheque is admitted, the presumption under Section 118 of the NI Act that the cheque in question was drawn for consideration and the presumption under Section 139 of the NI Act that the holder of the cheque/ respondent received the cheque in discharge of a legally enforceable debt or liability are raised against the accused.

Presumption under Section 139 of the NI Act is not absolute, and may be controverted by the accused. In doing so, the accused only ought to raise a probable defence on a preponderance of probabilities to show that there existed no debt in the manner so pleaded by the complainant in his complaint/ demand notice or the evidence. Once the accused successfully raises a probable defence to the satisfaction of the Court, his burden is discharged, and the presumption ‘disappears.’ The burden then shifts upon the complainant, who then has to prove the existence of such debt as a matter of fact.

On a perusal of the record, it was seen that right from the time of the framing of the notice, the statement under Section 313 of the Code of Criminal Procedure, 1973 and during the course of the trial, the accused denied issuing the subject cheque and his signatures on the cheque. In order to buttress his claim, accused also preferred an application before the learned MM to send the subject cheque for expert opinion to verify the signature of the respondent. The application was allowed subject to the specimen signature of the respondent as well as the photographs of the subject cheque be taken by the handwriting expert before the Court. On a juxtaposition of the signature appearing on the subject cheque, and the specimen signatures, the handwriting expert opined that the subject cheque was not signed by the respondent.

In the present case, as rightly noted by the learned MM, the respondent was able to controvert the presumptions raised against him. The FSL report substantiated the contention of the respondent that he was not a signatory to the subject cheque. Further, the accused was even able to raise a probable defence on a preponderance of probabilities that there existed no debt/liability in the manner so pleaded by the petitioner-complainant. The respondent, in his defence, asseverated that the cheque was not issued by him, and that he did not know how the said cheque came into the possession of the petitioner.

Once the respondent was able to raise a probable defence by either leading direct or circumstantial evidence to show that there existed no debt/liability in the manner as pleaded in the complaint/ demand notice/ affidavit evidence, the presumption raised against him disappeared. It was then for the petitioner to prove as a matter of fact that there in fact existed a debt/liability.

The acquittal of the accused here was not premised on the debt being time barred per se or not but the fact that the petitioner had failed to prove that there existed any debt/liability on date or the mode, manner or the purpose of the advancement of the loan. The respondent having already dislodged his burden, it was on the Complainant to show the existence of the debt, that too, as a matter of fact. For this reason, the petitioner having failed to lead any evidence to show the existence of the debt/liability, his contention that the learned MM erred in observing that the debt was time barred or that the presumption under Section 139 of the NI Act was in his favour, do not bolster the case of the Complainant.

For further details refer Manoj Kumar Panchal v. Mahender Kumar Panchal [2025] GCtR 1694 (Delhi).