2021 (11) TMI 453 - HC - Indian Laws

Acquittal Upheld in Check Bounce Case: Burden of Proof, Defense Theory Emphasized

The High Court upheld the acquittal of the respondent under Section 138 of the Negotiable Instruments Act. The court found that the appellant failed to ... Dishonor of Cheque - appellant failed to produce any relevant document like Bank statement or loan sanction letter to prove that the cheque was issued against the loan taken by the respondent - preponderance of probability - section 138 of NI Act - HELD THAT:- A bare perusal of the impugned judgment clearly reveals that the learned trial court has given the cogent reasoning for acquitting the accused-respondent. It has been concluded by the learned court below that the appellant has failed to prove that the cheque in question was issued by the respondent against the loan sanctioned to him and therefore, if the cheque was dishonoured for want of sufficient funds, the same does not constitute an offence under Section 138 of the Act - it would be hazardous to convict the respondent only on the basis of the presumption under section 139 of the Act in the absence of any material, and which material ordinarily would be expected to be in the complainant's possession and control, to show that loan was in fact disbursed to the accused. The standard of the proof that is required to probabilise the suggestive case of the accused in a case filed under Section 138 of Negotiable Instruments Act is that the presumption under Section 139 of Negotiable Instruments is as that of statutory presumption, however, the same is rebuttable. The standard of proof that required to shift the burden on the shoulders of the accused is based on the principles of 'preponderance of probability' and not on the principle as being examined in the criminal case to prove the guilt of the accused 'beyond reasonable doubt'. It is well settled that the proceedings under Section 138 of Negotiable Instruments Act are quasi-criminal in nature. The principles that will apply to acquittal in other criminal cases are not applicable in cases instituted under the Act. The test of proportionality should guide the construction and interpretation of 'reverse onus clauses' and the respondent/accused cannot be expected to discharge an unduly high standard of proof. Since the proceedings under Section 138 of the Negotiable Instruments Act are quasi-criminal in nature, it is sufficient enough for the accused to prove the 'suggestive case or defence theory' up to the 'level of preponderance of probability'. While the presumption is indeed triggered, the presumption is rebuttable. The burden on the accused is to make out a probable defence. The accused need not step into the witness box or adduce direct evidence. It would suffice if the accused is in a position to create a reasonable doubt that the version of the complainant is false. In the factual matrix, the accused has more than succeeded in rebutting the presumption. Appeal dismissed. Issues:Acquittal under Section 138 of Negotiable Instruments Act based on lack of proof of loan transaction and cheque issuance.Analysis:The case involved an appeal against the acquittal of the respondent under Section 138 of the Negotiable Instruments Act. The appellant alleged that the respondent had taken a loan and issued a cheque that bounced due to insufficient funds. The trial court acquitted the respondent as the appellant failed to prove that the cheque was issued against the loan. The appellant argued that the respondent did not discharge the burden of proving why the cheque was given. However, the court found that the appellant failed to produce relevant documents like bank statements or loan sanction letters to establish the transaction.The court emphasized that the burden of proof in cases under Section 138 is based on the preponderance of probability, not beyond reasonable doubt. It highlighted that the statutory presumption under Section 139 is rebuttable, and the accused need to present a probable defense to shift the burden. The court cited previous judgments to support this principle and clarified that the accused can rely on circumstantial evidence or presumptions of fact to rebut the statutory presumptions.Furthermore, the court noted that the proceedings under Section 138 are quasi-criminal and require a proportionate approach. The accused need not meet an unduly high standard of proof and must only establish a suggestive defense theory up to the level of preponderance of probability. In this case, the court found that the respondent successfully rebutted the presumption, and the appellant failed to provide sufficient evidence to prove the loan transaction and cheque issuance.Considering the reasoning provided by the trial court for the acquittal, the High Court dismissed the appeal, finding no illegality or perversity in the judgment. The court affirmed that the appellant did not meet the required standard of proof to convict the respondent under Section 138, emphasizing the rebuttable nature of statutory presumptions and the need for a probable defense to shift the burden of proof.