Presumption mandated by Section 139 of the Act includes a presumption that there exists a legally enforceable debt or liability and that is a rebuttable presumption.
High Court vides its impugned judgment set aside the judgment of acquittal of the trial court and remanded the case for retrial in a complaint alleging dishonor of cheque under Section 138 of the Negotiable Instruments Act, 1881 (Act).
The trial court had held that the complainant had no source of income to lend the amount relevant to the accused and he failed to prove that there was legally recoverable debt payable to him. High Court framed two legal issues namely, whether an action under Section 138 is the complainant required to establish his financial capacity to lend money; and secondly whether presumption under Section 139 of the Act would not accrue to the benefit of the complainant unless the accused rebuts that presumption?
High Court answered the first issue in the negative and second in the affirmative and further held that the orders of acquittal recorded by the trial court suffered from legal infirmity as the prosecution has been undone only on the ground that complainant had not proved his capacity to lend money and hence those orders are liable to be set aside. Accordingly order directing acquittal was set aside and matters were remanded for retrial.
It was observed that the presumption mandated by Section 139 of the Act includes a presumption that there exists a legally enforceable debt or liability and that is a rebuttable presumption. It is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. High Court had disposed bunch appeals where the factual matrix and the evidences adduced were different and while doing so only the two legal issues were answered and no merits of respective cases were considered. The trial court had taken into account the testimonies and considering entire oral and documentary evidence came to the conclusion that the complainant had no source of income to lend a sum of money in question and thus failed to prove that there was legally recoverable debt payable by the accused to him.
[K. Subramani vs. K. Damodara Naidu]