Proof Of Cheque Execution Under NI Act Triggers Presumption Unless Rebutted: Kerala High Court

The Kerala High Court on Monday, 18 May, held that once a complainant proves the transaction and execution of a cheque in a prosecution under Section 138 of the Negotiable Instruments Act, the statutory presumptions under Sections 118 and 139 operate in the complainant's favour unless rebutted by the accused.

Justice A. Badharudeen set aside a Trial Court judgment acquitting Jayapal, the accused in a cheque dishonour case involving Rs. 3 lakh and convicted him under Section 138 of the NI Act. The Court observed:

“When the complainant offers himself as a witness and deposes about his case by eliciting the transaction and the mode of execution of the cheque by stating that the accused brought the cheque, written, signed and executed before him, the said version failed to be shaken during cross- examination, this evidence is the substantive evidence to be relied on by the courts to hold that the complainant discharged his initial burden.”

The complaint was filed before the Judicial First Class Magistrate Court, Neyyattinkara, alleging dishonour of a cheque issued Jayapal, in favour of the complainant, Wilfred Jose.

The cheque, dated 10 February 2004, was issued towards discharge of a liability and was dishonoured on presentation due to insufficiency of funds. Wilfred alleged that despite statutory notice, the accused failed to repay the amount.

During trial, Wilfred examined himself and produced the dishonoured cheque along with bank memos. No defence evidence was led by the accused. However, the Magistrate acquitted him in June 2007. Before the High Court, the complainant challenged the acquittal, arguing that the Trial Court adopted a hyper technical approach despite clear proof of the transaction and execution of the cheque.

The Court noted that once the complainant proves the foundational facts, the presumptions under Sections 118 and 139 of the NI Act stand in his favour unless rebutted. It noted:

“Once the learned Magistrate found that the accused himself wrote the cheque and signed the same, how the learned Magistrate could be justified in holding that the transaction involved was something otherwise and as not spoken by the complainant without support of any materials to enter into such a finding? When a Magistrate finds that the cheque was written and signed by the payer, the entries therein showing the issuance of the cheque in the name of the payee (complainant) also is well established.”

Holding that the Trial Court erred in rejecting credible evidence despite clear proof of execution, the High Court set aside the acquittal and sentenced him to imprisonment till the rising of the Court. It also imposed fine and compensation, with a default sentence of six months' imprisonment in case of non-payment.

Accordingly, the High Court allowed the appeal.

For Appellant: Advocates R.T Pradeep and V.Vijulal

For Respondents: Sr. Public Prosecutor, Renjit George