Case Note & Summary
The appeal before the High Court of Bombay at Goa arose from a complaint under Section 138 of the Negotiable Instruments Act, 1881. The appellant, as original complainant, challenged the order of the Magistrate at Mapusa which dismissed her complaint and acquitted respondent no.1. The appellant alleged that her deceased husband had advanced a friendly loan of ₹7,00,000/- to respondent no.1 by issuing a demand draft in the presence of PW2. In discharge of this loan, respondent no.1 issued a cheque bearing No. 669919 drawn on South Indian Bank, Porvorim branch, in favour of the appellant. On presentation, the cheque was returned unpaid for insufficient funds. The appellant issued a legal notice demanding payment, which was received by respondent no.1, but no payment was made. Consequently, a complaint under Section 138 of the NI Act was filed before the Magistrate at Mapusa. The Magistrate, after trial, accepted that the cheque bore respondent no.1's signature but concluded that respondent no.1 had proved there was no loan transaction between him and the deceased husband of the complainant. Accordingly, the Magistrate dismissed the complaint and acquitted respondent no.1. The appellant then filed Criminal Appeal No.21 of 2017 before the High Court. The core legal issue was whether the Magistrate committed a patent error in accepting respondent no.1's evidence as rebuttal to the presumption under Section 139 of the NI Act. The appellant argued that once the signature on the cheque and its dishonour were established, the statutory presumption under Section 139 arose, requiring respondent no.1 to rebut it. The appellant contended that respondent no.1 failed to reply to the legal notice, did not take a specific defence at the initial stage, and did not examine himself despite indicating willingness under Section 313 of the Criminal Procedure Code. The appellant further argued that during cross-examination, a suggestion was put to the complainant about cash repayment of ₹7,00,000/- to the deceased husband, which amounted to an admission of the loan and created a burden on respondent no.1 to prove repayment. The appellant relied on Rangappa v. Sri Mohan and Bir Singh v. Mukesh Kumar. Respondent no.1 countered that in an appeal against acquittal, the High Court's scope is limited to correcting perverse or irrational findings. He submitted that an accused is not required to examine himself to rebut the presumption under Section 139; the onus is to show preponderance of probability, which can be demonstrated from the complainant's own evidence and cross-examination. Respondent no.1 argued that cross-examination of PW1 and PW2 along with documents showed sufficient inconsistencies to rebut the presumption. He relied on Geeta Devi v. State of U.P and Kumar Exports v. Sharma Carpets. The High Court considered the principles governing appeals against acquittal as laid down in Chandrappa & Ors v. State of Karnataka, noting that an appellate court has full power to review, reappreciate, and reconsider the evidence, but interference is warranted only if findings are perverse or based on inadmissible material. The Court also examined the nature of the presumption under Section 139 of the NI Act and the burden on the accused. The provided text, however, stops at paragraph 15 and does not include the final operative order of the High Court. Therefore, the final decision is not available in the supplied judgment extract.
Headnote
A) Criminal Procedure - Appeal Against Acquittal - Scope of Appellate Court's Powers - Code of Criminal Procedure, 1973, Section 178 - The appeal was filed against acquittal under Section 138 of the Negotiable Instruments Act, 1881. The High Court considered the parameters for reversing an acquittal, relying on Geeta Devi v. State of U.P and Chandrappa & Ors v. State of Karnataka. Held that an appellate court has full power to review, reappreciate and reconsider evidence but interference requires findings to be perverse, irrational, or based on inadmissible material (Paras 13-15). B) Negotiable Instruments - Dishonour of Cheque - Presumption Under Section 139 - Negotiable Instruments Act, 1881, Sections 138 and 139 - Once the signature on the cheque and its dishonour are proved, a statutory presumption arises that the cheque was issued for a legally enforceable debt. The appellant argued the presumption was not rebutted while the respondent claimed it stood rebutted through complainant's evidence. Held that the presumption is rebuttable and can be rebutted by preponderance of probability without the accused stepping into the witness box (Paras 7-12). C) Evidence - Rebuttal of Presumption - Burden of Proof - Negotiable Instruments Act, 1881, Section 139 - The burden shifts to the accused to rebut the presumption under Section 139 by showing inconsistencies or improbabilities in the complainant's case. A suggestion in cross-examination regarding cash repayment can amount to an admission of the loan, but the fact of repayment must be proved by the accused. Held that absence of reply to legal notice or non-examination of the accused does not automatically mean the presumption remains unrebutted (Paras 7-11). D) Negotiable Instruments - Legally Enforceable Debt - Friendly Loan Transaction - Negotiable Instruments Act, 1881, Section 138 - The complainant alleged a friendly loan of ₹7,00,000/- advanced by her deceased husband through a demand draft. The respondent suggested cash repayment but did not lead evidence. Held that the existence of a legally enforceable debt depends on the entire evidence, and a mere suggestion of repayment may be treated as an admission of liability (Paras 6-8).
Issue of Consideration
Whether the learned Magistrate committed patent error in accepting the so-called evidence of the respondent as rebuttal evidence, to rebut presumption under Section 139 of the Negotiable Instruments Act, 1881?
Law Points
- Once signature on cheque and dishonour are proved
- presumption under Section 139 NI Act arises
- presumption is rebuttable by preponderance of probability
- accused need not examine himself to rebut presumption
- accused can rebut from complainant's own evidence
- appellate court against acquittal requires findings to be perverse or irrational
- suggestion in cross-examination suggesting repayment can amount to admission of loan
