Read Time: 08 minutes

Synopsis

The Supreme Court has said in a cheque dishonour case, the burden of proof shifts on the accused after the complainant proved the basic fact on issuance of the instrument with oral, documentary or other circumstantial evidence.

"As soon as the complainant discharges the burden to prove that the instrument, say a cheque, was issued by the accused for discharge of debt, the presumptive device under Section 139 of the Negotiable Instruments Act helps shifting the burden on the accused," a bench of Justices Aravind Kumar and S V N Bhatti said.

The court said the effect of the presumption, in that sense, is to transfer the evidential burden on the accused of proving that the cheque was not received by the Bank towards the discharge of any liability. Until this evidential burden is discharged by the accused, the presumed fact will have to be taken to be true, without expecting the complainant to do anything further, it pointed out.

The court further said the nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact.

However, in order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested, it said.

"In other words, the accused is left with two options. The first option-of proving that the debt/liability does not exist-is to lead defence evidence and conclusively establish with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities by referring to the particular circumstances of the case," the bench said.

The apex court explained how presumptions worked in the Negotiable Instruments Act while reversing concurrent acquittal of respondent-accused Ajay Singh for a sum borrowed from complainant Rajesh Jain in 2014.

It allowed the complaint filed under Section 138 of Negotiable Instruments Act and convicted the respondent accused with fine of twice the amount of the cheque namely Rs 13,90,408, failing which he should undergo simple imprisonment for one year.

The complainant has lent Rs 6 lakh to the accused in 2014 and further more sums thereafter. He failed to repay the amount, used avoidance tactics, changed his mobile number and shifted his residence. However, when traced in 2017, he issued post dated cheque of over Rs 6 lakh which got dishonoured due to insufficient funds.

In his 313 statements, the court noted the accused admitted of having taken a loan of Rs 20 lakh and having repaid some interest. He claimed his signed blank cheque has been misused.

"The case of the complainant has been consistent throughout as can be noticed from a perusal of the complainant, demand notice and affidavit evidence. In fact, the signature on the cheque having not been disputed, and the presumption under Section 118 and 139 having taken effect, the complainant's case stood satisfied every ingredient necessary for sustaining a conviction under Section 138," the bench said. 

The court rejected that the case set up by the accused as "thoroughly riddled with contradictions", saying, on the face of the record, there is not the slightest of credibility perceivable in the defense set up by the accused.

"The case of the defense was limited only to the issue as to whether the cheque had been issued in discharge of a debt/liability. The accused having miserably failed to discharge his evidential burden, that fact will have to be taken to be proved by force of the presumption, without requiring anything more from the complainant," the bench said.

Case Title: Rajesh Jain Vs Ajay Singh