Case Note & Summary
The appellant, Sunanda Rithe, filed a criminal appeal against the acquittal of the respondent, Madhav Rajurkar, by the Chief Judicial Magistrate in Summary Criminal Case No.610/2012 for the offence under Section 138 of the Negotiable Instruments Act, 1881. The appellant alleged that she had advanced a loan of Rs.2,50,000 to the respondent, her brother, on 29.01.2011, evidenced by a document titled 'Usanwar Paoti' (Exh.28). The respondent issued a cheque dated 31.12.2011 for the same amount, which was dishonoured upon presentation. Despite a legal notice dated 25.01.2012, the respondent replied on 09.02.2012 denying the debt and claiming that the cheque was given as a nominal document to help the appellant show her creditors. The trial court acquitted the respondent, holding that the appellant failed to prove the existence of a legally enforceable debt. The High Court reversed this decision, emphasizing that the trial court had failed to apply the presumptions under Sections 118(a) and 139 of the NI Act, which presume consideration and that the cheque was issued for a debt or liability. The court noted that the document Exh.28 clearly recorded the loan and the cheque was issued for repayment. The respondent's defence was not supported by credible evidence and did not rebut the presumption on a preponderance of probabilities. The High Court convicted the respondent under Section 138 of the NI Act, sentencing him to simple imprisonment for three months and directing him to pay compensation of Rs.3,00,000 to the appellant, with default sentence of one month.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption of Consideration - Sections 118(a) and 139, Negotiable Instruments Act, 1881 - The trial court acquitted the accused despite the complainant proving the execution of a document (Exh.28) and the dishonour of the cheque. The High Court held that the trial court failed to apply the mandatory presumptions under Sections 118 and 139, which shift the burden onto the accused to rebut the presumption of a legally enforceable debt. The accused's defence that the cheque was given as a nominal document was not proved on a preponderance of probabilities. (Paras 1-10) B) Evidence Act - Rebuttal of Presumption - Standard of Proof - Section 4, Evidence Act, 1872 - The High Court clarified that the accused must rebut the presumption under Section 139 of the NI Act by raising a probable defence, not by proving beyond reasonable doubt. The accused's reply notice and oral evidence were insufficient to rebut the presumption, as the document Exh.28 clearly recorded the loan and the cheque was issued for repayment. (Paras 8-10) C) Criminal Procedure Code - Appeal Against Acquittal - Powers of Appellate Court - Section 378, Code of Criminal Procedure, 1973 - The High Court, exercising its appellate jurisdiction, found that the trial court's judgment was perverse and not based on proper appreciation of evidence. The acquittal was set aside and the accused was convicted under Section 138 of the NI Act, with a sentence of simple imprisonment for three months and compensation of Rs.3,00,000. (Paras 11-12)
Issue of Consideration
Whether the trial court erred in acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881, by failing to properly apply the presumptions under Sections 118 and 139 of the said Act, and whether the appellant-complainant had proved the existence of a legally enforceable debt or liability.
Final Decision
The appeal is allowed. The judgment and order dated 07.08.2017 passed by the Chief Judicial Magistrate in Summary Criminal Case No.610/2012 is set aside. The respondent is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to suffer simple imprisonment for three months and to pay compensation of Rs.3,00,000 to the appellant, in default to suffer simple imprisonment for one month.
Law Points
- Presumption of consideration under Section 118(a) and Section 139 of Negotiable Instruments Act
- 1881
- Burden of proof on accused to rebut presumption
- Standard of proof for rebuttal is preponderance of probabilities
- Document titled 'Usanwar Paoti' can be considered as evidence of loan transaction
