Cheque Dishonour | Accused Can Rebut Presumption Of Debt By Referring To Particular Circumstances Of Case: Kerala High Court

The appeal before Justice Bechu Kurian Thomas was preferred by the complainant in the case seeking to assail the acquittal of the accused in the case.

The complainant had alleged that the accused had borrowed Rs. 3 lakhs from him and in satisfaction of the same, the accused had drawn a cheque. When the same was presented for encashment, it was dishonoured for not having sufficient funds. He then sent a notice demanding payment of the amount and the accused replied to the same saying that the complainant misused the signed blank cheque given by him.

The accused was then proceeded against for the offence under Section 138 NI Act. Accused contended that he had not borrowed Rs. 3 lakhs and only Rs. 20,000/- was owed. He produced Exhibit D1 agreement, which showed that out of Rs. 1.84 lakhs owed, Rs. 20,000 was already repaid and only Rs. 1.64 lakhs was pending. In cross examination, the complainant had admitted that D1 reflected the transaction between him and the complainant.

After analysing the evidence before it, the Magistrate acquitted him as it felt that the accused's version was more probable. It held that the presumption under Section 139 regarding a valid debt does not arise from the facts of the case.

Analysing the various precedents laid down by the Supreme Court, including Basalingappa v. Mudibasappa [(2019) 5 SCC 418], Rajaram v. Maruthachalam, Sanjabij Tari v. Kishor S. Borcar and Rajesh Jain v. Ajay Singh, the Court observed:

“an analysis of the above decisions makes it discernible that while dealing with the presumption under section 139 of the Act, an accused has two options. The first option is by proving that the debt/liability does not exist - i.e; by leading defense evidence and conclusively establishing with certainty that the cheque was not issued in discharge of a debt/liability. The second option is to prove the non-existence of debt/liability by a preponderance of probabilities, referring to the particular circumstances of the case. In view of the above prepositions of law, an accused can rebut the presumption under section 139 of N.I Act by a preponderance of probabilities also. If neither of the above options are satisfied, the Court is bound to accept the case of the complainant on the basis of the presumptions, provided the other legal requirements under the statute are complied with.”

Applying this to the facts of the case before it, the Court came to the conclusion that the oral evidence of the complainant itself made the defence version more probable. It felt that it has to act under the belief that the alleged debt did not exist.

Thus, the Court dismissed the appeal after finding that the trial court rightly came to the conclusion that presumption under Section 139 does not arise.

Case No: Crl. A. No. 222 of 2015

Case Title: Jose v. Jose and Anr.

Citation: 2025 LiveLaw (Ker) 717

Counsel for the appellant: Sheejo Chacko

Counsel for the respondents: Sayed Mansoor Bafakhy Thangal, Sunil N. Shenoi, P. Viswanathan (Sr.), Ajith Viswanathan Sreeja V. – Public Prosecutor

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