Interpretation of Section 139 of Negotiable Instruments Act, 1881 in cases involving allegations of Cheque Dishonour

Interpretation of Section 139 of Negotiable Instruments Act, 1881 in cases involving allegations of Cheque Dishonour 

Section 139 - "Standard of Proof" - Complainant alleged that Accused borrowed amount of Rs. 5 lacs from him and when complainant demanded his money back, accused issued cheque which got dishonoured - Accused argued that he had issued cheque towards debt or any other liability - Accused also argued that complainant had failed to establish that cheque was issued by accused - Accused argued that she had borrowed money from X and Y and cheque was issued towards liability towards X and Y and not towards complainant - Held, "it is a well settled principle that the standard of proof for rebutting the presumption under Section 139 of N.I.Act is that of the preponderance of probabilities and if the accused is able to raise a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution under Section 138 N.I.Act fails. The preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which he relies." - "It is a settled position of law that the accused can prove his defence by drawing inferences from the materials already on record including the complainant’s evidence, circumstances of the case and also by leading his own evidence. If the accused successfully creates doubts in the complainant’s claim about the existence of a legally enforceable debt, then the burden of proof shifts back to the complainant who is required to prove the guilt of the accused beyond reasonable doubt" - In this case, the defence canvassed by the accused that there was no transaction between her and the complainant and the complainant is only a name lender acting under the behest of one X and Y as contended by her assumes significance - Held, in view of such facts that complainant failed to establish that accused borrowed a sum of ₹5 lakhs from him and issued cheque to him in discharge of any debt or liability. Hence, the conviction and sentence against the accused for the offence under Section 138 N.I. Act is liable to be set aside. Rangappa v. Sri Mohan [2010] GCtR 1697 (SC) followed.  - Adline Pancy Vijayan v. Navas K.C. [2024] GCtR 3460 (Kerala)