Case Note & Summary
The revision petition was filed by Smt. Gouri, the accused, challenging her conviction under Section 138 of the Negotiable Instruments Act, 1881. The complainant, Devan Housing Finance Corporation Ltd. (DHFL), alleged that the accused issued a cheque for Rs. 1,00,000 towards repayment of a loan, which was dishonoured due to insufficient funds. The trial court convicted the accused, and the appellate court confirmed the conviction. The accused contended that the cheque was given as security for a loan taken by her husband and not towards any existing debt. The High Court examined the evidence and found that the complainant failed to prove the existence of a legally enforceable debt. The accused successfully rebutted the presumption under Section 139 by showing that the cheque was given as security. The High Court held that the courts below erred in convicting the accused and set aside the conviction, acquitting the accused.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - The complainant must prove the existence of a legally enforceable debt or liability. The presumption under Section 139 is rebuttable and the accused can discharge the burden by raising a probable defence. In this case, the accused successfully rebutted the presumption by showing that the cheque was given as security and not towards any existing debt. The courts below erred in convicting the accused without properly appreciating the evidence. (Paras 10-15) B) Negotiable Instruments Act - Rebuttal of Presumption - Section 139 - Standard of Proof - The accused need not prove the defence beyond reasonable doubt; it is sufficient if the accused raises a probable defence. The trial court and appellate court failed to consider the defence evidence and the circumstances that the cheque was given as security. The High Court set aside the conviction and acquitted the accused. (Paras 16-20)
Issue of Consideration
Whether the conviction of the accused under Section 138 of the Negotiable Instruments Act, 1881 is sustainable when the complainant failed to prove the existence of a legally enforceable debt or liability and the accused successfully rebutted the presumption under Section 139 of the Act.
Final Decision
The High Court allowed the revision petition, set aside the judgment and order of conviction dated 10.12.2013 in Criminal Appeal No.29/2013 and the judgment dated 16.04.2013 in Criminal Case No.431/2012, and acquitted the petitioner/accused of the offence under Section 138 of the Negotiable Instruments Act, 1881.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act is rebuttable
- burden shifts to accused to prove absence of legally enforceable debt
- standard of proof is preponderance of probabilities
- complainant must prove existence of legally enforceable debt
- accused can rebut presumption by raising probable defence
