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2019 (1) TMI 514 - HC - Indian LawsDishonor of Cheque - insufficient funds - Presumptions as to negotiable instruments - Section 138 of Negotiable Instruments Act - Held that:- Chapter XVII containing Sections 138 to 142 was introduced in the Act by Act 66 of 1988 with the object of inculcating faith in the efficacy of banking operations and giving credibility to negotiable instruments in business transactions. These provisions were intended to discourage people from not honouring the commitments by way of payment through cheques. It is for this reason that the Courts should lean in favour of an interpretation which serves the object of the statue - In terms of Section 4 of the Evidence Act whenever it is provided by the Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved. The words “proved” and “disproved” have been defined in Section 3 of the Evidence Act. In Rangappa versus Sri Mohan, [2010 (5) TMI 391 - SUPREME COURT OF INDIA], Hon’ble three Judge Bench of the Hon’ble Supreme Court had occasion to examine the presumption under Section 139 of the Act and it was held that in the event the accused is able to raise a probable defence which creates doubt with regard to the existence of a debt or liability, the presumption may fail. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on record but also by reference to the circumstances upon which he relies. Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the prudent man. The standard of proof so far as the prosecution is concerned, is proof of guilt beyond all reasonable doubt, however, the one on the accused is only mere preponderance of probability. Therefore, once the accused/respondent No.1 has probabilized his defence by showing the consideration to be improbable or doubtful, then obviously, in the given facts and circumstances, the appellant was obliged to prove the existence of consideration as a matter of fact and upon his failure to prove the same, disentitled him to the grant of relief on the basis of negotiable instrument. Appeal dismissed - decided against appellant.
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