Section 139 of Negotiable Instruments Act, 1881 and Acquittal of Accused in Case of Cheque Dishonour

Section 139 of Negotiable Instruments Act, 1881 and Acquittal of Accused in Case of Cheque Dishonour

Section 139 - "Presumption in favour of holder" and its rebuttal - Legally Enforceable Debt - Absence of Legally Enforceable Debt - Burden and Discharge of Burden by Accused - A [accused] had challenged his conviction -  "A" issued a cheque on 9 March 2005 - Amount of cheque was for Rs. 5 lacs - Cheque was issued towards discharge of liability of Rs. 15 lacs - The liability arose out of amount borrowed in the year 2004 -  Cheque was returned for insufficiency of funds  - A denied there is a legally enforceable debt - In the notice of demand that was issued by C to accused A after the cheque had been returned for want of funds, the complainant stated that A had sought a 'financial accommodation' of Rs.15 Lakhs and paid a sum of Rs.20,000 (corrected thereafter in a corrigendum) - Trial Court convicted "A" - Sessions Court Acquitted "A" - High Court convicted "A" - Accused argued that he has discharged the burden which is cast by the provisions of Section 139 and established a defence on a preponderance of probabilities - Accused "A" also argued that there is an absence of a legally enforceable debt - Admittedly A and C are related and there was some civil litigation between the father of the complainant and the appellant - "C" admitted that, as a matter of fact, "C" himself received an amount of Rs.10 lakhs from A under a loan transaction but stated that he had repaid that amount to A - The entire amount, significantly, is alleged to have been paid over without obtaining a receipt or document evidencing the payment of the amount - C admitted that he had not mentioned anything about the accused having issued these two cheques in his complaint - C failed to establish the source of funds which he is alleged to have utilized for the disbursal of the loan of Rs.15 lakhs to "A"  - Held, "Section 139 of the Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received it, in discharge, in whole or in part, of a debt, or liability. The expression "unless the contrary is proved" indicates that the presumption under Section 139 of the Act is rebuttable. Terming this as an example of a “reverse onus clause”" - "The standard of proof for rebuttal of the presumption under Section 139 of the Act is guided by a preponderance of probabilities" - Whether the complainant had furnished a hand loan of Rs.15 lakhs to "A" as stated in the complaint or whether "C" had paid Rs.20 lakhs as mentioned in the legal notice dated 10 August 2004 or whether he had paid an amount of Rs.5 lakhs as suggested during the course of cross-examination was a matter of serious doubt - If "C" had paid Rs.15 lakhs to "A", the suggestion during the course of cross-examination of having paid an amount of Rs.5 lakhs casts serious doubt on the existence of a debt in the first place - Non-disclosure of the facts pertaining to the earlier two cheques, and the steps, if any, taken for recovery was again a material consideration which indicated that there was a doubt in regard to the transaction - Conviction of "A" was set aside - "A" held entitled to acquittal. - ANSS Rajashekhar v. Augustus Jeba Ananth [2019] GCtR 6475 (SC)