S.138 NI Act | Complainant Discharges Initial Burden Through Credible Testimony Unless Discredited In Cross-Examination: Kerala High Court

The Kerala High Court has reiterated that in cheque bouncing prosecutions, the initial burden rests upon the complainant to prove the transaction and once this burden is discharged, the complainant can avail the presumptions in its favour laid down in Section 139 NI Act. As per Section 139, it shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.This testimony, the court said, should not be disbelieved unless discredited in cross-examination or if the complainant's evidence is found to be unacceptable. Justice A. Badharudeen delivered the judgment while allowing a criminal appeal filed against the acquittal of an accused in a cheque dishonour case involving ₹3 lakh."Now it is necessary to address how the complainant in a prosecution alleging commission of offence punishable under Section 138 of the NI Act would be able to discharge his initial burden in the matter of transaction and execution of cheque alleged to be dishonoured, so as to avail the presumptions under Sections 139 and 118 of the NI Act.When the complainant offers himself as a witness and deposes about his case by eliciting the transaction and the mode of execution of the cheque by stating that the accused brought the cheque, written, signed and executed before him, the said version failed to be shaken during cross-examination, this evidence is the substantive evidence to be relied on by the courts to hold that the complainant discharged his initial burden".The court said that this substantive evidence should not be disbelieved by the court unless by cross-examination or otherwise the complainant's evidence is found to be unacceptable for which reasons to be recorded in writing."As already noted, it is well settled law that in a prosecution alleging commission of offence punishable under Section 138 of the NI Act, the initial duty is caste upon the complainant to prove the transaction that led to execution of the cheque and once the initial burden is discharged satisfactorily, then the presumptions under Sections 118 and of the NI Act would be available to the complainant, unless and otherwise the accused is able to rebut the presumptions by relying on the evidence already on records or by adducing independent evidence," the court said. The complainant alleged that the accused borrowed ₹3 lakh and issued a cheque dated February 10, 2004 towards repayment. The cheque was dishonoured due to insufficient funds. Statutory notice was issued, but payment was not made, which led to prosecution under Section 138 of the NI Act.The Judicial First Class Magistrate Court, Neyyattinkara, had acquitted the accused in 2007, holding that the complainant failed to satisfactorily prove the transaction underlying the cheque. The complainant thus challenged the acquittal before the High Court in the present criminal appeal. The Court examined whether the trial magistrate was justified in holding that the complainant failed to establish the underlying transaction despite accepting that the accused had written and signed the cheque.The accused had contended that the cheque reached the complainant through a third person, but no evidence was adduced to substantiate the defence. Even the alleged intermediary was not examined as a witness.The Court examined the evidence and noted that the complainant has filed an affidavit in lieu of Chief Examination stating that the cheque was written and brought by the accused and executed the same in the presence of the complainant. The Court further noted that the complainant has consistently deposed the same during the cross- examination as well. The Court observed that such testimony constituted substantive evidence capable of satisfying the complainant's initial burden.The High Court noted that the Magistrate had accepted that the accused himself wrote and signed the cheque, yet simultaneously concluded that the underlying transaction was “something otherwise” than what the complainant alleged.“In the instant case, on scanning the evidence of PW1, the stand taken by the learned Magistrate is found to be unacceptable, rather not digestible to prudence. Once the learned Magistrate found that the accused himself wrote the cheque and signed the same, how the learned Magistrate could be justified in holding that the transaction involved was something otherwise and as not spoken by the complainant without support of any materials to enter into such a finding?.” the Court said.The Court thus set aside the acquittal, and convicted the accused under Section 138 of the NI Act and sentenced him to imprisonment for one day along with a fine of ₹4.5 lakh. Of this, ₹4.25 lakh was directed to be paid to the complainant as compensation.Case Title: Wilfred Jose v Jayapal and Ors. Case No: Crl.A 1964/ 2008Citation: 2026 LiveLaw (Ker) 274Counsel for Appellant: R.T....

S.138 NI Act | Complainant Discharges Initial Burden Through Credible Testimony Unless Discredited In Cross-Examination: Kerala High Court

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S.138 NI Act | Complainant Discharges Initial Burden Through Credible Testimony Unless Discredited In Cross-Examination: Kerala High Court

Anamika MJ

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