[Cheque Dishonour] Complainant Failed To Prove Cheque Was Issued Against Legally Enforceable Debt: Kerala High Court Acquits Accused

The Kerala High Court has held that a complainant under the Negotiable Instruments Act cannot rely on the presumption that the holder of a negotiable instrument has paid consideration for it when his claim is inconsistent.

It upheld the acquittal of the accused upon noting that the complainant in the present case had failed to prove that the cheque had been issued in lieu of legally enforceable debt when called upon to do so by the trial court, due to suspicious circumstances surrounding the consideration for the negotiable instrument.

“The accused could discharge her initial onus of proof showing that the existence of consideration was doubtful. The onus now shifted to the complainant, who is obliged to prove it as a matter of fact” observed Justice K Babu.

The appellant had filed a complaint alleging an offence under Section 138 of the Negotiable Instruments Act against the accused/respondent. The appellant submits that the accused had executed a cheque for Rs. 10,00,000/- which was dishonoured due to insufficient funds.

The counsel for the appellant submitted that the judgement of acquittal passed by the magistrate court is illegal and unsustainable in law, arguing that as the complainant had established the execution of the cheque, the presumption under Section 139 in favour of the holder is in her favour.

The court reasoned that the terms 'proved' and 'disproved' as provided in Section 3 of the Evidence Act allows for a presumption that a negotiable instrument is to be for consideration unless and until after considering the matter where they reasonably conclude that the consideration does not exist.

Accordingly, the court held that “the necessary conclusion is that for rebutting such a presumption, what is needed is to raise a probable defence. All the circumstances, including the evidence adduced on behalf of the complainant, could be relied upon”.

The court upheld the trial court's order and stated that that as the testimony provided by the complainant is inconsistent with the complainant's claim, unless the holder of the instrument removes such suspicions by tendering satisfactory explanations, no conviction is legally permissible by banking on statutory presumptions.

The court concluded that there now also exists a presumption of innocence in favour of the accused as the accused was acquitted by the trial court, quoting the decision in Chandrappa and ors. v. State of Karnataka.

Counsel for Petitioner: Advocates Mathai Eappen Vettath, TG Rajan, PK Raghavan and Jimmy G

Counsel for Respondent: Advocates Naveen Thomas, G Sudheer (PP)

Citation: 2024 LiveLaw (Ker) 177

Case Title: Rahiya v. Jasna and ors.

Case Number: Crl. A. No. 532 of 2022

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