TMI Blog2018 (7) TMI 2229X X X X Extracts X X X X X X X X Extracts X X X X ..... used demonstrating the real facts of the matter either by direct evidence or by showing that the evidence and material placed on record by the complainant himself was not believable and that it stood discredited, the presumption would cease to operate against the accused. In the present case, it was not disputed that the signatures on the cheques were that of the respondent. It was argued that the cross-examination of the appellant demonstrated that he had failed to support his case of having advanced cash hand loan to the respondent. It was further contended that the cross-examination also demonstrated that the cheques were issued for some other transaction and not for repayment of hand loan as claimed by the appellant - the appellant failed to produce any material in support of his claim that he had indeed advanced cash hand loan of ₹ 2 lakhs to the respondent. This was a foundational fact in the present case because according to the appellant the cheques in question had been issued by the respondent in order to repay the said loan amount. The appellant failed to discharge the initial burden to show that he had required funds for advancing money to the respondent. A p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such circumstances was justified in acquitting the respondent in the present case. 4. The facts in the present case are in a narrow compass. The appellant (original complainant) and the respondent (original accused) are related to each other having cordial relations. It was the case of the appellant that the respondent had approached him for a hand loan of ₹ 2 lakhs and that the appellant had given him cash amount of ₹ 2 lakhs. According to the appellant, in order to repay the said loan, the respondent had issued two cheques, but when they were presented for encashment, they were returned by the Bank with the remarks funds insufficient . 5. The appellant issued notice to the respondent in respect of the dishonour of the cheques, but the respondent failed to respond to the same and, therefore, the appellant was constrained to file complaint under the provisions of the said Act before the trial Court. 6. In the trial Court, the appellant led oral and documentary evidence while the respondent failed to lead any evidence in support of his stand. Therefore, when the complaint came up for consideration before the trial Court, it was only the complaint of the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the presumption under the said Act would not be triggered. It was further submitted that even if presumption was to operate against the respondent, he was entitled to rebut the same on the basis of material brought on record by way of cross-examination of the appellant. It was submitted that in order to rebut the presumption, it was not necessary for the respondent to enter the witness box and that he could very well rebut the presumption by discrediting the appellant in cross-examination. Both parties placed reliance on various judgments pertaining to the said question. 10. Before referring to the evidence and material on record in the present case, in order to examine whether the appellant was justified in contending that presumption operated against the respondent, which remained unrebutted, it would be necessary to refer to few precedents which would help in answering the said question. 11. In the case of M.S. Narayana Menon vs. State of Kerala - (2006) 6 Supreme Court Cases 39, the Hon'ble Supreme Court has referred to the presumption under Sections 118 and 139 of the said Act and it has been held that the presumption is rebuttable. In that context, the Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect evidence as the existence of negative evidence is neither possible nor contemplated and even if led, is to be seen with a doubt. This Court, therefore, clearly opined that it is not necessary for the defendant to disprove the existence of consideration by way of direct evidence. 32. The standard of proof evidently is preponderance of probabilities. Inference of preponderance of probabilities can be drawn not only from the materials on records but also by reference to the circumstances upon which he relies. 33. Presumption drawn under a statute has only an evidentiary value. Presumptions are raised in terms of the Evidence Act. Presumption drawn in respect of one fact may be an evidence even for the purpose of drawing presumption under another. 12. In the case of Kumar Exports vs. Sharma Carpets - (2009) 2 Supreme Court Cases 513, in the context of presumption against the accused under the said Act, the Hon'ble Supreme Court has held as follows:- 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue. 13. Thereafter, a three Judge Bench of the Hon'ble Supreme Court in the case of Rangappa vs. Sri Mohan - (2010) 11 Supreme Court Cases 441, in the context of Section 139 of the said Act, has held as follows:- 27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edited, the presumption would cease to operate against the accused. 16. David Kaiser way back in the year 1955 in an article titled Presumptions of Law and Fact published in Marquette Law Review quoted majority opinion of the Missouri Court in the case of Machowik vs. Kansas City-196 Mo. 550 (1906), which reads as follows:- Presumptions are the bats of the law, flitting in the twilight, but disappearing in the sunshine of actual facts . 17. As per the law laid down by the Hon'ble Supreme Court the presumption under Sections 118 and 139 of the said Act is rebuttable. The accused can throw the sunshine of actual facts and rebut the presumption that may arise. This can be done either by adducing direct evidence or on the basis of material placed on record by the complainant, including discrediting the complainant in cross-examination, thereby raising a probable defence. 18. Applying the said position of law to the facts of the present case, it is found that the respondent (accused) failed to reply to the statutory notice sent by the appellant (complainant), he failed to file any reply or submissions in response to the complaint filed before the trial Court and he di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heques towards security till the time accounts with the said Anand Rathi were settled, but he denied the same. The appellant also denied the suggestion that he was doing transactions with Anand Rathi through the respondent. 22. A perusal of the aforesaid statements made in cross-examination by the appellant shows that he has completely failed to prove the foundational fact of having advanced loan to the respondent. Therefore, his claim that the cheques in question were issued by the respondent for repayment of the loan could not be accepted. The failure on the part of the appellant to produce his account statement and absence of entry in accounts maintained by him regarding loan advanced to the respondent, does show that there was no material to support the basic facts on which the entire case of the appellant was based. Apart from this, suggestions given in the cross-examination and statements made in response thereto by the appellant, show that there were other transactions in respect of which there was exchange of moneys by the appellant. Applying the position of law as it emerges from the above quoted precedents to the facts of the present case, it becomes clear that suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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