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Synopsis

The Supreme Court has said that to rebut the presumption under Section 139 of the Negotiable Instruments Act, 1881, it is open to the accused to not only rely on the evidence led by him but he can also rely on the materials submitted by the complainant, in order to raise a probable defence. 

A bench of Justices Hrishikesh Roy and Sanjay Karol found no reason to entertain an appeal filed by one S Murugan against the Madras High Court's order of October 27, 2022 affirming the judgment of acquittal in a cheque dishonour case and dismissing the petition by the complainant.

The primary basis for the view taken by the two courts below was the failure of the complainant to prove his financial capacity to advance the loan amount. 

The trial court had noted that the complainant in order to show his financial capacity had indicated that he had borrowed Rs 8,00,000 from his mother in order to advance Rs 8,00,000 loan to the accused. 

It was however significant that the mother herself from whom the complainant claimed to have borrowed the sum, was not produced as a witness in the proceeding. That apart, the sale transaction of May 31, 2013 which was made the basis for money coming into the hand of the complainant’s mother, was canceled subsequently on May 13, 2015 and as such there was no concluded transaction that would justify any money in the hand of complainant’s mother, the bench said.

It was further noted by the court that the complainant had filed another case under Section 138 of the Negotiable Instruments Act, 1881 against the one Uthaman but the said case was dismissed primarily on the ground that the complainant failed to produce his income document.

"It is well settled that to rebut the presumption under Section 139 of Negotiable Instruments Act, 1881, it is open to the accused to not only rely on the evidence led by him but he can also rely on the materials submitted by the complainant, in order to raise a probable defence," the bench said.

The respondent’s counsel relied on the ratio in 'Basalingappa vs Mudibasappa' (2019) to contend that the complainant failed to discharge his burden. 

The top court in that case had said, "To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference or preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.”

After hearing the counsel, the bench thus ordered, "We have also perused the basis on which the High Court has affirmed the judgment of acquittal favouring the accused in the proceeding under Section 138 of the NI Act. In the absence of any infirmity, we see no reason to entertain the appeal."

Case Title: S Murugan Vs M K Karunagaran