SC: Mere denial doesn’t fulfil requirements of rebuttal u/s 118 & 139, NI Act

On 15th March, 2019, The Hon’ble Supreme Court, in the matter of Rohitbhai Jivanlal Patel v. State Of Gujarat & Anr. pronounced that when a presumption u/s 118 & 139 of the Negotiable Instruments Act, is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds are not of relevant consideration while examining if the accused has been able to rebut the presumption or not.

The Hon’ble Supreme Court observed that:

Ordinarily, the Appellate Court will not be upsetting the judgment of acquittal, if the view taken by Trial Court is one of the possible views of matter and unless the Appellate Court arrives at a clear finding that the judgment of the Trial Court is perverse, i.e., not supported by evidence on record or contrary to what is regarded as normal or reasonable; or is wholly unsustainable in law. Such general restrictions are essentially to remind the Appellate Court that an accused is presumed to be innocent unless proved guilty beyond reasonable doubt and a judgment of acquittal further strengthens such presumption in favour of the accused. However, such restrictions need to be visualised in the context of the particular matter before the Appellate Court and the nature of inquiry therein. The same rule with same rigour cannot be applied in a matter relating to the offence under Section 138 of the Negotiable Instruments Act, particularly where a presumption is drawn that the holder has received the cheque for the discharge, wholly or in part, of any debt or liability. (Para 11.1)

The accused is entitled to bring on record the relevant material to rebut a presumption that the holder has received the cheque for the discharge, wholly or in part, of any debt or liabilityand to show that preponderance of probabilities are in favour of his defence. But while examining if the accused has brought about a probable defence so as to rebut the presumption, the Appellate Court is certainly entitled to examine the evidence on record in order to find if preponderance indeed leans in favour of the accused.  (Para 11.1)

Though there may not be sufficient negative evidence which could be brought on record by the accused to discharge his burden, yet mere denial would not fulfil the requirements of rebuttal as envisaged under Section 118 and 139 of the Negotiable Instruments Act. (Para 16)

When a presumption u/s 118 & 139 of the Negotiable Instruments Act, is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds are not of relevant consideration while examining if the accused has been able to rebut the presumption or not. (Para 19)

Copy of judgement: Judgement-15th March, 2019

-Tushar Kaushik

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