2026 (1) TMI 709 - HC - Indian Laws

Statutory presumption u/ss118 and 139 (NI Act) for a cheque rebutted; complainant failed to prove debt, acquittal affirmed

Whether the statutory presumption under Ss.118 and 139 NI Act was rebutted: court found trial evidence, notably the complainant's admission, sufficiently ... Dishonour of Cheque - acquittal of accused - rebuttal of presumption available under Sections 118 and 139 of the NI Act - onus of burden to prove - burden shifted to complainant to prove the disputed cheque - HELD THAT:- Considering the entire evidence available on record and more particularly, the admission of P.W.1 in his evidence before the trial Court, the learned trial Judge has rightly held that the accused have successfully rebutted the presumption drawn in favour of the complainant under Sections 118 and 139 of the NI Act and as such, the burden gets shifted to the complainant to prove that the disputed cheque was issued for discharging the lawful amount due by the accused to him. As already pointed out, the complainant has not produced any other evidence to show that Ex.P.1 cheque was issued for discharging the legally enforceable debt or liability. Hence, this Court has no hesitation in holding that the complainant miserably failed to prove the liability of the accused and the issuance of the cheque in dispute therefor. Consequently, this Court concludes that the judgment of acquittal passed by the learned Judicial Magistrate is perfectly legal and the same cannot be found fault with and that therefore, the Criminal Appeal, which is devoid of merits, is liable to be dismissed. Appeal dismissed. Issues: (i) Whether the impugned judgment of acquittal in S.T.C.No.128 of 2016 dated 26.02.2019 (acquitting the accused for offence under Section 138 of the Negotiable Instruments Act) is liable to be set aside.Analysis: The Court considered the statutory presumptions in Sections 118 and 139 of the Negotiable Instruments Act and the established principle that once a cheque and signature are proved, a presumption arises that it was issued for discharge of debt or liability. The Court reviewed rival factual narratives and the evidence led by both sides, including admissions by the complainant and documents relating to transactions between the parties. The Court applied the law that the accused may rebut the statutory presumption by adducing evidence establishing a probable defence on the preponderance of probabilities; if the accused does so, the burden shifts back to the complainant to prove existence of the debt or liability. On the conspectus of evidence, the Court found that the accused had raised a probable defence (including contested prior transactions, explanations about a blank cheque, and documentary/material inconsistencies in the complainant's account) sufficient to rebut the presumption and shift the burden. The complainant thereafter failed to prove that the cheque was issued for discharge of a legally enforceable debt or liability.Conclusion: The appeal is dismissed and the acquittal of the accused under Section 138 of the Negotiable Instruments Act is confirmed; outcome is in favour of the Respondent.