Presumption u/s 139 of Negotiable Instruments Act can’t be rebutted by mere denial.

The Supreme Court reiterated that mere denial of a debt or liability cannot shift the burden of proof from the accused in a case of dishonour of the cheque. The Court also made it clear that the Section 139 of the Negotiable Instruments Act, 1881, provides for drawing the presumption in favour of holder and a bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused.

The same was held in the matter titled as  in Kisan Rao v. Shankargouda SLP(CRL.)NO.10030 OF 2016) on July 02, 2018.

CHALLENGES

In the present case, the trial court as well as the Appellate Court have found that cheque contained the signatures of the accused and it was given to the appellant to present in the Bank.  The presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. In the reply to the notice which was given by the appellant the accused took the defence that the cheque was stolen by the appellant. The said defence was rejected by the trial court after considering the evidence on record with regard to which no contrary view has also been expressed by the High Court.

The  appeal had been filed against the judgment and order of the High Court. A Criminal Revision Petition filed by the respondent-accused was allowed by setting aside the order of conviction and sentence recorded against the accused under Section 138 of the Negotiable Instruments Act, 1881.

HELD

The Supreme Court set aside the judgment of the High Court which cleared the man punished for dishonour of cheque, by holding that he had been able to create doubt in the mind of the court with regard to the existence of liability.  Said so, the accused had led no direct evidence to shift his burden. The complainant led oral as well as documentary evidence to prove his case, no evidence was led by the accused to rebut the presumption regarding the existence of debt or liability of the accused. The bench  referred upon the case of Kumar Exports vs. Sharma Carpets 2009 (2) SCC 513, in which the provisions of the Negotiable Instruments Act as well the Evidence Act was discussed. It provides that while applying the definition of the word “proved” in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Negotiable Instrument Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was drawn for consideration and that it was executed for discharge of a liability once the execution of negotiable instrument is either proved or admitted. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. Firstly, the complainant has to discharge the burden to prove that the instrument note was executed by the accused. The rules of presumptions under Sections 118 and 139 of the Negotiable Instruments Act help him to shift the burden on the accused. The presumptions shall end only when the contrary is proved by the accused. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no liability. But a bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. To rebutte the presumptions, the accused should bring on record such facts and circumstances so probable that a prudent man would act upon it, under the circumstances of the case.

Bench also referred to the case of  State of Kerala vs. Puttumana Illath Jathavedan Namboodiri 1999 (2) SCC 452, the court said that the revisional jurisdiction of the High Court cannot be equated with the power of an Appellate Court nor can it be treated even as a second appellate jurisdiction. It would be appropriate for the High Court to re-appreciate the evidence when any glaring feature is brought to the notice of it, which would otherwise tantamount to gross miscarriage of justice.