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Synopsis

The Supreme Court has upheld concurrent acquittal of a man in a cheque dishonour case, saying that in a matter where the concern of financial capacity of the creditor is raised on behalf of an accused, it is to be discharged by the complainant through leading cogent evidence. 

A bench of Justices BV Nagarathna and Augustine George Masih asserted that the liability of the defence in cases under Section 138 is not that of proving its case beyond reasonable doubt. 

"Since a presumption only enables the holder to show a prima facie case, it can only survive before a court of law subject to contrary not having been proved to the effect that a cheque or negotiable instrument was not issued for a consideration or for discharge of any existing or future debt or liability," the bench said.

The court dismissed an appeal filed by complainant Sri Dattatraya against accused Sharanappa against the Karnataka High Court's judgment which rejected his plea against acquittal in the case related to dishonour of cheque to the sum of Rs two lakh.

"Since the accused has been able to cast a shadow of doubt on the case presented by the appellant, he has therefore successfully rebutted the presumption stipulated by Section 139 of the NI Act 1881," the bench said.

In the case, the respondent has been able to shift the weight of the scales of justice in his favour through the preponderance of probabilities, it pointed out.

The court also said while acknowledging the test of proportionality and having laid the interpretation of Section 139 of the NI Act 1881 hereof, this court has held that an accused cannot be obligated to rebut the said presumption through an unduly high standard of proof. 

It noted the offence envisaged under Section 138 as a regulatory offence for largely being in the nature of a civil wrong with its impact confined to private parties within commercial transactions.

The court also recorded that the NI Act 1881 enlists three essential conditions that ought to be fulfilled before the said provision of law can be invoked. Firstly, the cheque ought to have been presented within the period of its validity. Secondly, a demand of payment ought to have been made by the presenter of the cheque to the issuer, and lastly, the drawer ought to have had failed to pay the amount within a period of 15 days of the receipt of the demand. 

In the instant case, the court said, while the appellant claimed the cheque to have been issued at the time of advancing of the loan as a security, however, as per his statement during the cross examination it was revealed that the same was presented when an alleged demand for repayment of alleged loan amount was raised before the respondent, after a period of six months of advancement.

Furthermore, it pointed out, there was no financial capacity or acknowledgement in his Income Tax Returns by the appellant to the effect of having advanced a loan to the respondent. 

Even further, the court noted, the appellant has not been able to showcase as to when the said loan was advanced in favour of the respondent nor has he been able to explain as to how a cheque issued by the respondent allegedly in favour of Mallikarjun landed in the hands of the instant holder, that is, the appellant.

In its judgment, the bench also highlighted principles underlining the exercise of power to adjudicate a challenge against acquittal bolstered by concurrent findings as per the judicial pronouncements:

(i) Criminal jurisprudence emphasises on the fundamental essence of liberty and presumption of innocence unless proven guilty. This presumption gets emboldened by virtue of concurrent findings of acquittal. Therefore, this court must be extra cautious while dealing with a challenge against acquittal as the said presumption gets reinforced by.virtue of a well-reasoned favourable outcome. Consequently, the onus on the prosecution side becomes more burdensome pursuant to the said double presumption.

(ii) In case of concurrent findings of acquittal, this court would ordinarily not interfere with such view considering the principle of liberty enshrined in Article 21 of the Constitution, unless perversity is blatantly forthcoming and there are compelling reasons.

(iii) Where two views are possible, then this court would not ordinarily interfere and reverse the concurrent findings of acquittal. However, where the situation is such that the only conclusion which could be arrived at from a comprehensive appraisal of evidence, shows that there has been a grave miscarriage of justice, then, notwithstanding such concurrent view, this court would not restrict itself to adopt an oppugnant view. 

(iv) To adjudge whether the concurrent findings of acquittal are ‘perverse’ it is to be seen whether there has been failure of justice. 

(v) In situations of concurrent findings favoring accused, interference is required where the trial court adopted an incorrect approach in framing of an issue of fact and the appellate court whilst affirming the view of the trial court, lacked in appreciating the evidence produced by the accused in rebutting a legal presumption.

(vi) Furthermore, such interference is necessitated to safeguard interests of justice when the acquittal is based on some irrelevant grounds or fallacies in reappreciation of any fundamental evidentiary material or a manifest error of law or in cases of non adherence to the principles of natural justice or the decision is manifestly unjust or where an acquittal which is fundamentally based on an exaggerated adherence to the principle of granting benefit of doubt to the accused, is liable to be set aside.