Testimony Affirming Accused Wrote and Signed a Cheque Discharges Complainant’s Initial Burden of Proof

The Appellant (Complainant) filed a complaint under Section 138 of the Negotiable Instruments Act (NI Act) alleging that the 1st Respondent (Accused) issued a cheque (Ext.P1) for ₹3,00,000 to discharge a debt, which was subsequently dishonored for "funds insufficient".

Despite a statutory notice, the Accused failed to pay.

The Trial Court (JFCM-IV, Neyyattinkara) acquitted the Accused on June 15, 2007, holding that while the Accused had signed the cheque, the Complainant failed to prove the underlying transaction and that the transaction was "otherwise than what had been spoken".

1. Whether the learned Magistrate erred in finding that the complainant failed to prove the transaction leading to the execution of Ext.P1 cheque?

2. Whether the acquittal of the Accused was justified given the evidence of PW1 and the legal presumptions available under the NI Act?

The court primarily applied Sections 118 and 139 of the Negotiable Instruments Act, 1881, which mandate a statutory presumption that a cheque is issued for consideration and in discharge of a legally enforceable debt once execution is proved.

the initial burden on the complainant is discharged through substantive oral evidence regarding the execution of the cheque, which then shifts the onus to the accused to rebut the presumption through evidence or cross-examination.

The High Court found the Trial Court’s reasoning "not digestible to prudence".

The Magistrate had explicitly concluded that "the accused himself wrote the cheque and signed the same".

The High Court reasoned that once the signature and writing are admitted or proved, the complainant has successfully discharged the initial burden, triggering the presumptions under Sections 118 and 139.

The Accused failed to adduce any independent evidence, such as examining the witness 'Radhakrishnan' through whom he claimed the cheque reached the complainant, to rebut these presumptions.

The Court also noted that the Complainant provided bank statements (Ext.P7-P10) showing he had secured a personal loan of ₹3,20,000 shortly before the transaction, establishing financial capacity.

The judgment of acquittal was set aside. The 1st Respondent was convicted under Section 138 of the NI Act and sentenced to simple imprisonment for one day (till rising of the court) and a fine of ₹4,50,000. Of this, ₹4,25,000 is to be paid as compensation to the Complainant, with a default sentence of six months' imprisonment.