(Prayer: Criminal Appeal filed under Section 378(3) Cr.P.C, to call for the records and set aside the judgment and acquittal order passed in C.C.No.420 of 2014, on the file of the Judicial Magistrate Court, Tiruchendur, dated 17.05.2022 and convict the respondent.)
1. The Criminal Appeal is directed against the judgment made in C.C.No.420 of 2014, dated 17.05.2022, on the file of the Court of the Judicial Magistrate, Tiruchendur, in acquitting the respondent/accused under Section 138 of the Negotiable Instruments Act.
2. The appellant, who is the complainant, filed a complaint under Section 200 Cr.P.C., against the respondent/accused for the offence under Section 138 r/w 142 of the Negotiable Instruments Act.
3. For the sake of convenience and brevity, the parties will hereinafter be referred as per their status/ranking in the trial Court.
4. The case of the complainant is that the complainant sold a portion of his land in Melacheval, Tirunelveli District to the accused for Rs.23,00,000/- and at that time, the accused agreed to purchase the remaining lands of the complainant and requested the complainant to execute a power of attorney deed in favour of the accused's friend Kandasamy and further agreed to sell the lands and pay the sale price within a year. Both the complainant and the accused entered into an agreement in that regard and accordingly the complainant executed a power of attorney deed in favour of the accused's friend Kandasamy. Though the accused and the power agent Kandasamy have sold the land, the accused has not chosen to pay any amount to the complainant, despite repeated requests. The complainant made a complaint before the police station at Chennai and they requested him to approach the jurisdictional Tiruchendur police and accordingly, the complainant lodged a complaint. At the enquiry before the Tiruchendur Police, the accused agreed to settle the entire amount through cheques. Accepting the same, the complainant received the cheques dated 10.03.2014 and 10.04.2014. The complainant sent a cheque dated 10.03.2014 for collection and the same was honoured. Thereafter, he sent the cheque dated 10.04.2014 for collection and the same was returned for want of sufficient funds in the bank account of the accused. When the dishonour was informed to the accused, he requested that he will issue three cheques for Rs.5,00,000/- each and accordingly issued three cheques for Rs.5,00,000/- each dated 10.06.2014, 10.07.2014 and 10.08.2014 drawn on Tamil Nadu Mercantile Bank. The complainant sent the cheque dated 10.06.2014 for collection, but the same was returned as funds insufficient. Thereafter the complainant sent the other cheques for collection, but the same were dishonoured, as funds insufficient vide banker's memo dated 25.09.2014. Hence, the complainant sent a legal notice dated 04.10.2014 to the accused demanding to pay the amount covered by the cheque. The accused having received the legal notice sent a reply notice dated 29.10.2014 with false and untenable allegations. Since the accused has not paid the amount within the stipulated period, the complainant was constrained to file the above complaint for the offence under Section 138 r/w 142 of the Negotiable Instruments Act.
5. The learned Judicial Magistrate, upon receiving the complaint, recorded the sworn statement of the complainant and on perusing the records, upon satisfied that there existed a prima facie case, took the case on file in C.C.No. 420 of 2014 for the offence under Section 138 of the Negotiable Instruments Act and ordered for issuance of summons to the accused. After appearance of the accused, copies of the records were furnished to him under Section 207 Cr.P.C., on free of costs. When the accused was questioned about the offence alleged against him, he denied the commission of offence and pleaded not guilty.
6. During trial, the complainant examined himself as P.W.1 and exhibited 11 documents as Exs.P.1 to P.11. The accused examined two witnesses Thriu.Raguraman and Thiru.Kandasami as D.W.1 and D.W.2 respectively and exhibited 3 documents as D.1 to D.3
7. The learned Judicial Magistrate, upon considering the evidence both oral and documentary and on hearing the arguments of both sides, passed the impugned judgment dated 17.05.2022 holding that the complainant failed to prove the offence under Section 138 of the Negotiable Instruments Act as against the accused beyond reasonable doubt, acquitted him under Section 255(1) Cr.P.C. Aggrieved by the impugned judgment of acquittal, the complainant has preferred the present appeal.
8. Whether the impugned judgment of acquittal passed in C.C.No.420 of 2014, on the file of the Judicial Magistrate, Tiruchendur liable to be set aside? is the point for consideration.
9. It is evident from the records that there was no representation for the respondent for two hearings and hence, this Court adjourned the matter to 23.10.2025 finally. When the matter was taken up on 23.10.2025, since there was no representation for the respondent, despite listed finally, heard the argumens of the learned Counsel for the appellant and posted on 31.10.2025 for respondent's side arguments as last chance. On 31.10.2025, there was no representation for the respondent. Hence, this Court reserved the case for judgment, giving an opportunity to the respondnet to file written submission if any within three days, but no written submission was filed.
10. Before entering into further discussion, it is necessary to refer Sections 118 (a) and 139 of the Negotiable Instruments Act, which deal with the statutory presumption:
“118. ...
(a) of consideration; that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration;
139.Presumption in favour of holder. It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability.”
11. It is the specific case of the complainant that the accused after purchasing the portion of land at Melacheval, Tirunelveli District from the complainant, agreed to purchase the remaining land and requested the complainant to execute a power of attorney deed in favour of his friend Kandasamy and accordingly, the complainant and the first accused entered into an agreement, that the complainant executed a power of attorney deed dated 22.09.2011 under Ex.P.9 in favour of the accused's friend Kandasamy (D.W.2) in respect of the remaining land of the complainant, that though the accused along with D.W.2 – power of attorney sold the lands, the accused has not paid any amount to the complainant despite severeal requests, that the complainant lodged a complaint before the Tiruchendur police and at the enquiry before the police, the accused agreed to settle the entire amount and in pursuance of the same, he issued two cheques dated 10.03.2014 and 10.04.2014, that though the first cheque dated 10.03.2014 was honoured, the second cheque when presented for collection was returned as funds insufficient, that the complainant approached the accused and informed about the dishonour of the second cheque, that the accused, admitting that there was still Rs.20,00,000/- due by the accused, issued three cheques dated 10.06.2014, 10.07.2014 and 10.08.2014 under Exs.P.3, P.4 and P.4 for Rs.5,00,000/- each drawn on Tamil Nadu Mercandile Bank, Kayamozhi branch, that the complainant presented Ex.P.1 cheque for collection, but the same was returned as funds insufficient vide banker's memo dated 08.09.2014 under Ex.P.2, that the complainant presented the other two cheques – Exs.P.3 and P.4 for collection and the said cheques were also returned dishonoured for want of sufficient funds in the bank of the accused, vide banker's memo dated 25.09.2014 under Exs.P.7 and P.8, that the complainant sent a legal notice dated 04.10.2014 under Ex.P.5 directing the accused to apy the amount covered by the cheque, that the accused having received the notice, sent reply notice dated 29.10.2014 under Ex.P.6 with false and untenable allegations and that since the accused failed to pay the amount within the stipulated time, the complainant was forced to file the above complaint.
12. The defence of the accused, as evident from Ex.P.6 reply notice, cross examination of P.W.1 and the evidence of D.W.1 and D.W.2 is that the accused purchased some lands belonging to the complainant and subsequently the accused never had any land transaction with the complainant, that the accused has no connection whatever with D.W.2 – Kandasamy, that the complainant executed the power of attorney under Ex.P.9 to his trusted friend D.W.2 – Kandasamy and not at the instance of the accused, that the accused has no connection whatever with Ex.P.9 Power of Attorney and the subsequent sale of the land referred therein, that subsequent to the sale transaction between the complainant and the accused, there was no amount due by the accused to the complainant, that the complainant with the help of the police, threatened and received the cheques by force and as such, they said cheques are not supported any valid consideration, that the complainant by misusing the cheques received by force with the help of police, filed the above case and that therefore, the accused is not liable for any claim.
13. As rightly contended by the learned Counsel for the complainant, it is evident from the reply notice and the evidence adduced by the accused that the accused has specifically admitted that Exs.P.1, P.3 and P.4 cheques were belonging to him and also the signatures found therein. But according to the accused the said cheques along with other cheques were taken by the complainant forcibly with the help of police authorities. It is pertinent to mention that the complainant as P.W.1 gave evidence reiterating the complaint contentions and deposed about the liability of the accused, issuance of the cheques therefor, dishonour of the cheques, issuance of statutory notice and the failure of the accused to pay the amount within the stipulated time. On considering the evidence of P.W.1 and also the admission of the accused with regard to Exs.P.1, P.3 and P.4 cheques and the signatures found therein, this Court has no other option but to draw a presumption under Sections 139 and 118 of the Negotiable Instruments Act.
14. No doubt, the presumptions available under Section 118 and 139 of the Negotiable Instruments Act are always rebuttable in nature. It is settled law that the accused in order to rebut the presumption drawn in favour of the complainant under Section 118 and 139 of Negotiable Instruments Act, is not required to adduce any evidence and he can very well prove his probable defence through evidence adduced by the complainant and that the standard of proof required is of preponderance of probabilities.
15. At this juncture it is necessary to refer the following passages in the judgment of the Hon'ble Supreme Court in Rangappa Vs. Sri Mohan reported in (2011)11 SCC 441:
“27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the accused/defendant cannot be expected to discharge an unduly high standard of proof.
28. In the absence of compelling justifications, reverse onus clauses usually impose an evidentiary burden and not a persuasive burden. Keeping this in view, it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is that of `preponderance of probabilities. Therefore, if the accused is able to raise a probable defence which creates doubts about the existence of a legally enforceable debt or liability, the prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own.
16. The Hon'ble Supreme Court in Tedhi Singh Vs. Narayan Dass Mahant reported in (2022)6 SCC 738, has observed that the accused is not expected to discharge an unduly high standard of proof and the principle has developed that all which the accused needs to establish is a probable defence and as to whether a probable defence has been established is a matter to be decided on the facts of each case on the conspectus of evidence and circumstances that exist and the relevant portion is extracted hereunder:
“It is also open to him to establish the very same aspect by pointing to the materials produced by the complainant himself. He can further, more importantly, achieve this result through the cross examination of the witnesses of the complainant. Ultimately, it becomes the duty of the Courts to consider carefully and appreciate the totality of the evidence and then come to a conclusion whether in the given case, the accused has shown that the case of the complainant is in peril for the reason that the accused has established a probable defence.”
17. It is also necessary to refer a decision of the Hon'ble Supreme Court in Rajesh Jain Vs. Ajay Singh reported in (2023)10 SCC 148 wherein the Hon'ble Apex Court has dealt with the standard of proof required for the accused to rebut the presumption and the relevant paragraphs are extracted hereunder:
“39. The standard of proof to discharge this evidential burden is not as heavy as that usually seen in situations where the prosecution is required to prove the guilt of an accused. The accused is not expected to prove the nonexistence of the presumed fact beyond reasonable doubt. The accused must meet the standard of ‘preponderance of probabilities’, similar to a defendant in a civil proceeding. [Rangappa vs. Mohan (AIR 2010 SC 1898)]
40. In order to rebut the presumption and prove to the contrary, it is open to the accused to raise a probable defence wherein the existence of a legally enforceable debt or liability can be contested. The words ‘until the contrary is proved’ occurring in Section 139 do not mean that accused must necessarily prove the negative that the instrument is not issued in discharge of any debt/liability but the accused has the option to ask the Court to consider the non-existence of debt/liability so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that debt/liability did not exist. [Basalingappa Vs. Mudibasappa (AIR 2019 SC 1983) See also Kumar Exports Vs. Sharma Carpets (2009) 2 SCC 513
41. In other words, the accused is left with two options. The first option-of proving that the debt/liability does not exist-is to lead defence evidence and conclusively establish 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 by referring to the particular circumstances of the case. The preponderance of probability in favour of the accused's case may be even fifty-one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint, the case in the legal/demand notice, complainant's case at the trial, as also the plea of the accused in the reply notice, his 313 statement or at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was ‘no debt/liability’. [Kumar Exports and Sharma Carpets, (2009) 2 SCC 513]
42. The nature of evidence required to shift the evidential burden need not necessarily be direct evidence i.e., oral or documentary evidence or admissions made by the opposite party; it may comprise circumstantial evidence or presumption of law or fact.
43. The accused may adduce direct evidence to prove that the instrument was not issued in discharge of a debt/liability and, if he adduces acceptable evidence, the burden again shifts to the complainant. At the same time, the accused may also rely upon circumstantial evidence and, if the circumstances so relied upon are compelling the burden may likewise shift to the complainant. It is open for him to also rely upon presumptions of fact, for instance those mentioned in Section 114 and other sections of the Evidence Act. .....
44. Therefore, in fine, it can be said that once the accused adduces evidence to the satisfaction of the Court that on a preponderance of probabilities there exists no debt/liability in the manner pleaded in the complaint or the demand notice or the affidavit-evidence, the burden shifts to the complainant and the presumption 'disappears' and does not haunt the accused any longer. The onus having now shifted to the complainant, he will be obliged to prove the existence of a debt/liability as a matter of fact and his failure to prove would result in dismissal of his complaint case. Thereafter, the presumption under Section 139 does not again come to the complainant's rescue. Once both parties have adduced evidence, the Court has to consider the same and the burden of proof loses all its importance. [Basalingappa vs. Mudibasappa, AIR 2019 SC 1983; See also, Rangappa vs. Sri Mohan (2010) 11 SCC 441]”
18. The complainant in his complaint as well as in his chief examination evidence has stated that the accused purchased some portion of the land in Melacheval, Tirunelveli District from the complainant for Rs.23,00,000/- and at that time, the accused agreed to purchase the remaining lands and requested the complainant to execute a power of attorney in favour of D.W.2 – Kandasamy and agreed that they would sell the land and pay the amount to the complainant within a year, but in Ex.P.5 legal notice, the complainant took a stand that the accused agreed to purchase the lands of the complainant at Melacheval and paid only a part of the sale consideration of Rs.23,00,000/- and agreed to pay the balance sale price within one year from the date of purchase and the complainant has further stated that the accused after taking a sale in respect of some portion of the land, demanded the complainant to execute a power of attorney in favour of his friend one Kandasamy and accordingly the same was executed.
19. It is pertinent to mention that though the complainant has stated that the accused agreed to purchase the entire lands, he has not furnished the sale price fixed for the entire lands and after the payment of Rs.23,00,000/- what was the balance due by the accused to the complainant payable within a year. As already pointed out, in the complaint as well as in the evidence, the complainant has admitted that after executing a sale deed in favour of the accused in respect of some portion of the land, both of them entered into agreement wherein the accused undertook to sell the land and pay the amount within a year. But the complainant has neither produced the said agreement nor furnished the particulars of the same.
20. The learned trial Judge referred the averments in the counter affidavit under Ex.D.1 filed by the complainant before this Court in Crl.O.P.(MD)o.1458 of 2015, filed by the accused, wherein the complainant stated that he gave an undertaking written statement before the Tiruchendur police that he is ready to receive the cheques issued by the accused in his favour and hand over the agreement dated 22.09.2011. The learned trial Judge referred the above admission made by the complainant, has rightly drawn an adverse inference against the complainant under Section 114(g) of Indian Evidence Act for non-production of the agreement, which is a vital document to prove the privity of contract between the complainant and the accused. Moreover, the complainant neither in his notice nor in the complaint nor in the evidence, has mentioned the amount fixed as sale price in the agreement dated 22.09.2011 which was agreed to be paid by the accused to the complainant.
21. The complainant as well as the accused claimed that D.W.2 – Kandasamy was not their friend and was introduced to them by the other. According to the complainant, the accused introduced D.W.2 Kandasamy and requested him to execute power of attorney in favour of his friend D.W.2. But according to the defence, he never introduced D.W.2 nor requested the complainant to execute power of attorney in favour of D.W.2 and it was the complainant, who executed the power of attorney in favour of his trusted friend D.W.2.
22. P.W.1 in his cross-examination would say,
Bur in subsequent cross examination, he would say
23. On seeing the sale deed bearing Document No.1637/2011, P.W.1 would admit that he purchased the property from Seldon and in that document D.W.2 – Kandasamy subscribed his signature as attesting witnesses. P.W.1 would again say
24. When P.W.1 was again cross-examined on 13.07.2018, he would say
25. But the complainant, when the trial was in part heard stage, produced the copies of power of attorney deed dated 22.09.2011, executed by the complainant in favour of D.W.2 under Ex.P.9. But admittedly, Ex.P.9 does not refer anything about the accused. The complainant has also produced the copy of the sale deed, dated 03.05.2013 executed by D.W.2 as power agent of the complainant. As already pointed out, according to the complainant, the property referred in Ex.P.9 power deed was sold by the accused and D.W.2 Kandasamy.
26. But P.W.1 in his evidence would say
During subsequent cross-examination, he would say
27. P.W.1 in subsequent cross-examination would admit that himself and the accused were friends even before the execution of Power of Attorney deed. He would say
28. But as already pointed out, the complainant himself has produced the sale deed executed by the power of attorney – D.W.2 in favour of Pothigai Firms Private Ltd and in cross-examination, in three places, disowned the knowledge about the purchaser of the lands covered by Ex.P.9 from D.W.2 – Kandasamy. Moreover, P.W.1 would admit that after selling a portion of land for Rs.23,00,000/-, he did not sell any other land to the accused subsequently. He would admit that in his complaint as well as in chief evidence, has not stated about the total extent of land owned by him and the total sale price agreed between them. He would say
29. As already pointed out, it is the case of the complainant that after lodging police complaint, the accused gave two cheques and when the dishonour of the second cheque was intimated to him, he issued the cheques under Exs.P.1, P.W.3 and P.4 now under dispute. The accused has taken a stand that all the six cheques were taken from him forcibly at the police station. When it was suggested to P.W.1, during his cross-examination he denied the same.
30. Moreover, P.W.1 would admit that he has not stated that the amounts for which the first two cheques were given.
In subsequent cross-examination, he would reiterate that two cheques were issued outside Tiruchendur Taluk Police Station.
31. When P.W.1 was cross-examined on 09.03.2018, he would say that
32. Though P.W.1 has stated that the second cheque dated 10.03.2014 was for Rs.20,00,000/-, D.W.1 Bank Manager of the accused bank would say that the cheque dated 10.04.2014 for Rs.5,00,000/- was presented for collection on 12.04.2014 and the same was returned dishonoured on that day itself. D.W.1 would admit that they have not received any cheque for Rs.20,00,000/- from the complainant's bank. More importantly, as rightly observed by the learned trial Judge, the complainant in the counter affidavit in Ex.D.1 before the High Court, has specifically stated that the accused appeared before the Tiruchendur police station on 10.02.2014 and voluntarily admitted that he had cheated the complainant and apologised and came for compromise to pay Rs.35,00,000/- and he gave a written statement before the Trichendur Police and issued five cheques (with particulars of six cheques) in his favour drawn from Tamil Nadu Mercantile Bank, Kayamozhi Branch.
33. D.W.2 in his evidence would say that his friend Seldon introduced the complainant as well as the accused and thereafter he had a long acquaintance with the complainant and trusting him, he executed a power of attorney on 22.09.2011. He would further say that he could not sell the property and after the lapse of two years since the execution of power of attorney, the complainant approached him and directed him to sell the lands to Shanmuganathan of Chennai and accordingly, executed a sale deed and the complainant receiving the sale price, paid Rs.1,00,000/- to him and that there was no connection between the accused and the property referred in the power of attorney deed.
34. It is pertinent to mention that the complainant has furnished the particulars of cheques dated 10.03.2014 for Rs.10,00,000/- and the other cheques dated 10.04.2014, 10.05.2014, 10.06.2014, 10.07.2014, 10.08.2014 for Rs. 5,00,000/- each. Admittedly, the complainant has not offered any reason or explanation for the admissions made, referred above. Considering the admissions of P.W.1 in his evidence before the trial Court and also taking note of the evidence of D.W.2, the learned trial Judge has rightly held that the accused has rebutted the presumption drawn in favour of the complainant under Section 118 and 131 of the Negotiable Instruments Act and as such, the burden gets shifted to the complainant to prove that the disputed cheques were issued for discharging the lawful amount due by the accused to him. As already pointed out, the complainant has not produced any iota of materials to connect the accused with Ex.P.9 power of attorney deed executed in favour of D.W.2 and the sale made by D.W.2 as power agent of the complainant.
35. There is no evidence adduced to establish that the accused owed Rs.35,00,000/- to the complainant or that the disputed cheques were issued for discharging such a liability. It is pertinent to mention that even according to the complainant, he received the cheques from the accused at Tiruchendur police station.
36. Considering the above, this Court has no hesitation in holding that the complainant miserably failed to prove the liability of the accused and the issuance of the cheques in dispute therefor. Consequently, this Court concludes that the judgment of acquittal passed by the learned Judicial Magistrate is perfectly legal and the same cannot be found fault with and hence, the Criminal Appeal which is devoid of merits, is liable to dismissed.
37. In the result, the Criminal Appeal is dismissed confirming the judgment made in C.C.No.420 of 2014, dated 17.05.2022, on the file of the Court of the Judicial Magistrate, Tiruchendur in acquitting the respondent/accused under Section 138 of the Negotiable Instruments Act.
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