Case Note & Summary
The Supreme Court considered an appeal by the accused against the High Court of Karnataka's judgment convicting him under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused borrowed Rs.6,00,000 as a hand loan and issued a cheque dated 27.02.2012, which was dishonoured due to insufficient funds. The trial court acquitted the accused, finding that the accused had raised a probable defence by questioning the complainant's financial capacity and pointing to inconsistencies in the complainant's evidence, including the fact that the complainant had filed other cases under Section 138 and had been a witness to a transaction where the accused received Rs.15 lakhs. The High Court reversed the acquittal, holding that the trial court's judgment was perverse. The Supreme Court examined the legal principles regarding the presumption under Section 139 of the Act, which presumes that a cheque was issued for discharge of a debt or liability unless the contrary is proved. The Court noted that the accused can rebut this presumption by raising a probable defence that creates doubt, and the burden on the accused is not as heavy as on the prosecution. The Court found that the trial court had properly considered the evidence, including the complainant's failure to prove his financial capacity and the existence of other litigation, and had concluded that the transaction was doubtful. The Supreme Court held that the High Court erred in interfering with the acquittal without finding the trial court's findings to be perverse. The appeal was allowed, and the High Court's judgment was set aside, restoring the trial court's acquittal.
Headnote
A) Negotiable Instruments Act - Presumption under Section 139 - Rebuttal of Presumption - The accused can rebut the presumption by raising a probable defence that creates doubt about the existence of a legally enforceable debt or liability; the burden on the accused is not as heavy as on the prosecution. (Paras 8-10) B) Negotiable Instruments Act - Financial Capacity of Complainant - Relevance - The complainant's financial capacity to lend the amount is a relevant factor in assessing whether the cheque was issued for a debt or liability; lack of evidence of financial capacity can raise doubt. (Paras 7, 17) C) Criminal Procedure Code - Appeal against Acquittal - Section 378(4) - The High Court's interference with an acquittal is justified only if the trial court's findings are perverse or unreasonable; mere possibility of a different view is insufficient. (Paras 2.5, 3)
Issue of Consideration
Whether the accused successfully rebutted the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for discharge of a debt or liability, and whether the High Court erred in reversing the trial court's acquittal.
Final Decision
The Supreme Court allowed the appeal, set aside the High Court's judgment dated 04.07.2018, and restored the trial court's judgment of acquittal dated 20.02.2015.
Law Points
- Presumption under Section 139
- Rebuttal of presumption
- Probable defence
- Financial capacity of complainant
