Once presumption under section 139 Negotiable Instrument Act is drawn, Complainant need not prove the source of fund till the accused discharges his burden.
The Supreme Court of India through Justice Mr. Abhay Manohar Sapre and Justice Mr. Dinesh Maheshwari in Rohitbhai Jeevanlal Patel versus State of Gujarat and Anr. Criminal Appeal No.508 of 2019 decided on 15.03.2019 held that once presumption is drawn under Section 139 NI Act, the court should not go into the question of the fund of the complaint.
Challenge
The facts behind this case is that the Complaint-Respondent advanced loan of RS. 22,50,000/- to the Accused- Appellant in presence of one Mr. Jagdishbhai. The Accused-Appellant gave 7 cheques of Rs. 3 Lacs each to the Complainant and also promised to re-pay the same on a stamp paper and signed the same. However, the cheques got bounced on presentation to the bank. Thereafter, the Complainant filed a complaint case under Section 138 NI Act. The Complainant put the seven cheques, stamp paper, bank returning memo with the intimation letters, demand notices and replies of the Accused-Appellant. The trial court based on these documents took cognizance of the case and presumption under section 139 NI Act was drawn. The Accused, though admitted his signatures on the cheques and the stamp paper, questioned the source of fund used by the Complainant for advancing the loan and further alleged that the stamp paper was not containing the signature of the Complainant but of Mr. Jagdishbhai and was neither noterised nor registered so it was not having any evidentiary value.
The Ld. Trial Court acquitted the Accused-Appellant, interalia, holding that the Complainant had no funds to lend the loan and the stamp paper also does not contain his signature. The High Court of Gujarat reversed the order of the Trial court and held the accused guilty. The Accused-Appellant filed the present petition to challenge the order of the High Court.
Before the Supreme Court, the Accused-Appellant argued that the Complainant was not having sufficient funds to give loan to him. Moreover, the stamp paper was not having the signature of the Complainant-Respondent. He further relied upon the principles laid down in Arulvelu and Anr. Versus State represented by Public Prosecutor & Anr. (2009)10 SCC 206, that in matters wherein the Trial Court held the accused acquitted, the High court should reverse the order only when there is clear perversity in the order of the trial court order. The Complainant-Respondent argued that once the statutory presumption under Section 139 is drawn, the court should not question the fund of the complainant and the accused should rebut the probability. The Complainant-Respondent further argued that the Accused-Appellant put forward vague and baseless defence and in fact, his acknowledgment as to his signature on the cheques and the stamp paper supports the case of the Complainant-Respondent.
Held
The Hon’ble Court while upholding the order of the High Court held that once the Complainant satisfies his burden of proof by providing the documentary evidence, the statutory presumption under Section 139 is drawn and then the onus shifts to the accused to rebut the presumption by either proving that there was no consideration at all or the non-existence of the consideration was so probable that a prudent person would, under the circumstances of the case, act upon the plea that he consideration did not exist. The Court further held that once the presumption under Section 139 is drawn, the court should not question the fund of the Complainant till the accused discharges his burden otherwise it will defeat the purpose of the act.
The court further observed that the principles held in Arulvelu(Supra) cannot be applied with same rigour to Section 138 cases especially when the presumption is drawn as to the receipt of cheque for discharge, wholly or in part, of any debt or liability.
The Court, going into the facts of the case, held that the accused had not produced any documentary prove his averments. The court further held that as far as the averment of the accused with respect to the registration of notarisation of the stamp paper is concerned, it was not required as it was just an acknowledgement and not a contract especially.