Presumption under Section 139 of the Negotiable Instrument Act is rebuttable by leading evidence

The Supreme Court in the case of APS Forex Services Pvt. Ltd. vs. Shakti International Fashion Linkers & Ors. (Criminal Appeal No. 271 Of 2020) on 14.02.2020 held that in absence of further evidence to rebut the presumption u/s 139 of NI Act, the defence of the accused that the cheques were issued as security is not believable.

Facts :
The Accused herein approached the Complainant for issuance of foreign exchange for sum of Rs. 19,01,320/- which was paid through VTM (Visa Travel Money Card) by the Complainant. Against which the accused paid Rs. 6,45,807/- only leaving a balance of Rs. 12,55,513/-. Accused issued four cheques in favour of Complainant, however all the cheques came to be dishonoured. Thereafter, accused issued another cheque of Rs. 9,55,574/- and the same cheque came to be dishonoured due to ‘Stop Payment’.
The accused before the Trial court had admitted that the cheque was issued by him but towards the security and the complainant misused the cheque to recover the dues of business. The Trial Court and High Court acquitted the accused.

Issue:
Whether the decision of Trial Court and High Court, acquitting the accused was right in accordance of presumption made u/s 139 of NI Act.

Ratio:
The Supreme Court has observed that once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence.
In the present case after considering the fact that the accused has admitted the issuance of the cheques and his signature on the cheque, there is a presumption u/s 139 of the N.I. Act that there exists a legally enforceable debt or liability and such presumption being rebuttable in nature, the accused was required to lead evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence.