[Landmark Judgement] Rajaram V. Maruthachalam (2023)

Published on: January 4, 2024 at 11:30 IST

Court: Supreme Court of India

Citation: Rajaram V. Maruthachalam (2023)

Honourable Supreme Court of India has summarise the principles under the aegis of Sections 118(a) and 139 of the Negotiable Instruments Act, 1881:

1. Once the execution of cheque is admitted Section 139 of the of the Negotiable Instruments Act, 1881 mandates a presumption that the cheque was for the discharge of any debt or other liability.
2. The presumption under Section 139 of the Negotiable Instruments Act, 1881 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities.
3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.
4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 of the Negotiable Instruments Act, 1881 imposed an evidentiary burden and not a persuasive burden.
5. It is not necessary for the accused to come in the witness box to support his defence.

27. It can thus be seen that this Court has held that once the execution of cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability. It has however been held that the presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence.

The standard of proof for rebutting the presumption is that of preponderance of probabilities. It has further been held that to rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. It has been held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely.

Drafted by Abhijit Mishra