2019 (4) TMI 882 - HC - Indian Laws

Conviction upheld under Section 138 NI Act; importance of rebutting presumptions

Dinesh Chopra Versus Ranjan Chopra

The Court upheld the conviction under Section 138 of the Negotiable Instruments Act, emphasizing the importance of rebutting presumptions under Sections ... Dishonor of Cheque - insufficiency of funds - repayment of borrowed amount - section 138 of NI Act - burden of prove - Held that:- It was for the accused to have brought on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its non-existence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. It has repeatedly been held by the Hon’ble Supreme Court in RANGAPPA VERSUS SRI MOHAN [2010 (5) TMI 391 - SUPREME COURT OF INDIA] that though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfill the requirements of rebuttal as envisaged under Sections 118 and 139 of the Act. The only defence put-forth by the accused was that the cheque was handed over in the year 2010 as a security cheque, when loan was taken from the complainant. The borrowed money was returned before 2012, but the complainant misused the security cheque. Therefore, in such circumstances, it cannot be said that the accused has discharged the onus by bringing on record such facts and circumstances as to show the preponderance of probabilities tilting in his favour, any doubt on the complainant’s case that he had returned the money. This assumes importance because the petitioner had not denied the issuance of cheque. Revision petition dismissed. Issues:1. Conviction under Section 138 of the Negotiable Instruments Act.2. Rebuttal of presumptions under Sections 118 and 139 of the Act.3. Burden of proof on accused to show non-existence of consideration and debt.4. Defense of handing over the cheque as security and misuse by the complainant.Analysis:1. The judgment pertains to a Criminal Revision against a conviction under Section 138 of the Negotiable Instruments Act, where the accused was sentenced to simple imprisonment and ordered to pay compensation to the complainant. The accused borrowed money and issued a cheque, which was dishonored, leading to legal proceedings.2. The Court discussed Sections 118 and 139 of the Act, emphasizing the presumption in favor of the holder of a cheque, unless the contrary is proved. Referring to the case law, the Court highlighted the rebuttable nature of the presumption and the standard of proof required from the accused to contest the existence of consideration and debt.3. The judgment cited the accused's burden to show either the non-existence of consideration and debt or circumstances making their non-existence probable. Mere denial by the accused was deemed insufficient, requiring the accused to present facts and circumstances to shift the burden of proof to the complainant.4. The accused's defense that the cheque was a security and was misused by the complainant was considered. However, the Court found the complainant's evidence more compelling, indicating that the accused failed to discharge the burden of proof. The Court upheld the lower courts' judgments, dismissing the revision petition.In conclusion, the judgment upholds the conviction under Section 138 of the Negotiable Instruments Act, emphasizing the importance of rebutting presumptions under Sections 118 and 139. The accused's failure to provide sufficient evidence to contest the existence of consideration and debt led to the dismissal of the revision petition.