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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether leave to appeal against the acquittal under Section 138 of the Negotiable Instruments Act, 1881 should be granted where the accused had raised a probable defence by showing prior stop-payment instructions and the complainant failed to prove the loan and his financial capacity.
Analysis: In proceedings under Sections 118 and 139 of the Negotiable Instruments Act, 1881, the holder of the cheque enjoys a statutory presumption of consideration and liability once the foundational facts are shown. That presumption is rebuttable, and the accused can discharge the initial burden by raising a probable defence on a preponderance of probabilities, including through circumstances appearing in the complainant's evidence and the defence evidence. Here, the bank witness and the bank records showed that stop-payment instructions had been issued before the cheque was presented, and the complainant failed to establish the alleged sources of the loan amount or his financial capacity to advance the sum.
Conclusion: The accused had successfully rebutted the statutory presumption, and the complainant failed to prove a legally enforceable debt or liability. The refusal to interfere with the acquittal was justified, and leave to appeal was rightly declined.
Ratio Decidendi: In a prosecution under Section 138 of the Negotiable Instruments Act, 1881, once the accused raises a probable defence on a preponderance of probabilities, the burden shifts back to the complainant to prove the underlying consideration and debt as a matter of fact; failure to do so defeats the claim.
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