Burden of proof in Pronote and Cheque Bounce cases

This article is written by Dr. T. Srinivasa Rao, M.A., LL.M., P.G.D.I.R.P.M.,Ph.D V Addl. District & Sessions Judge, Ranga Reddy District

Most of the litigation in our country is covered by negotiable instruments. Like Article 32 of the Constitution, burden of proof is heart and soul of adjudication. Before adjudicating any matter the adjudicator should know on whom the burden of proof lies and how onus shifts from one party to another and ultimately who failed to discharge the burden or onus of proof. The ultimate object of the trial is to find out truth. In that process the presumptions help the parties to reduce their burden to prove a particular fact. It is uncommon for the stake holders to often confuse with the following aspects:
1. Presumptions
2. On whom the burden of proof lies:
(a) when execution is admitted,
(b) when execution is denied and
(c) when only signature is admitted
3. When presumptions, come to the rescue of the complainant
4. When presumptions are rebutted
5. When onus to prove shifts
6. When complainant has to prove beyond reasonable doubt
7. When preponderance of probabilities rebut the presumption under Section 118 (a) and 139 of N.I. Act.
8. What is the difference between Section 139 and 118 (a) of Negotiable Instruments Act and when they are raised.
9. What is the meaning of the expression until contrary is proved.
10. How the adverse inference can be drawn. 11. How to prove the execution of the Negotiable Instruments.

My endeavour in writing this article is that he who is well versed with the above aspects can render speedy, substantive and qualitative justice and thereby one can give message as to how a litigant won or lost his case. No doubt the trial is not only for the parties but also sometimes for the adjudicator also because he should know the truth of the litigation.

1.Presumptions: Presumptions are rules of evidence. The obligation on the prosecution may be discharged with the help of presumptions of law or fact unless or until the accused showed reasonable possibility of the non-existence of the presumed fact. Presumptions under section 118 and under section 139 are rebuttable presumptions. Section 118(a) provides a presumption that the cheque was made or drawn for consideration. Section 139 provides that unless the contrary is proved, that the holder of the cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. A conjoint reading of these sections i.e., sec 118 (a) and sec 139 will show that whenever the drawal of the cheque is either admitted or proved, the presumption under section 118 (a) will come to picture to say that the cheque is supported by consideration. The presumption under section 139 is explanatory and supplementary to the presumption under section 118 (a) to show that the cheque was received by the holder for the discharge of the debt or other liability. The nature of the presumption under section 138 is subject to the three conditions specified relating to presentation of cheque, giving of the notice and the non-payment after receipt of the notice.
The effect of these presumptions is to place the evidential burden on the accused of proving that the cheque was not issued towards the discharge of any liability. Presumptions may be looked as bats of law, flitting in the twilight but disappearing in the sun shine of facts. When such evidence is introduced the presumption is functuous officio and drops out of sight.

2. On whom burden of proof lies:
When the execution is admitted:
In view of the presumptions under section 118(a) and section 139, once accused admitted his signature on cheque, burden lies on him to prove that cheque was issued not for discharge of debt or liability legally enforceable in as much as every negotiable instrument shall be presumed to be supported by consideration under sec 118 (a) unless the contrary is proved and secondly a
presumption that the holder of cheque receiving the same of the nature referred to in sec. 139 to discharge in whole or in part of any debt or other liability. So the burden lies on the promissory
to rebut the said presumption.
When execution is denied:
Then it is the burden of the complainant/plaintiff to prove the execution of a cheque or pronote by the following means: The law thus can be summarise that the proof of identification of hand writing or the signature, as the case may be
1. By means of direct evidence
2. By means of familiar evidence
3. By means of comparison
4. By admission of parties
5. By means of scientific comparison by an expert and
6. By means of circumstantial evidence.

By direct evidence means by examining the persons who are said to have been present at the time of writing of the disputed handwriting or signatures, and by familiar evidence means by
examining the persons who are conversant with the hand writing and signatures of the executant.

3. How to discharge the evidential burden by the accused:
The phrase “burden of proof” has two meanings: one the burden of proof as a matter of law and pleading and the other the burden of establishing a case. The former is fixed as a question of law on the basis of the pleadings and is unchanged during the entire trial, whereas the latter is not constant but shifts as soon as party adduces sufficient evidence to raise a presumption in his favour. Sec 139 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 sec 138 specifies strong criminal remedy in relation to the dishonour of cheques, the rebuttal presumption under section 139 is a device to prevent undue delay in the course of litigation, however the accused cannot be expected to discharge an unduly high standard of proof. It is not necessary for the accused to get into witness-box or examine any witness or produce any document on his behalf. The reverse onus clauses usually impose an evidentiary burden. Keeping this in view court has to see whether the said circumstances are sufficient to rebut the presumption under section 139 of the Act that the cheque was issued for discharge of debt. When the 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 basing on the material available in the evidence on the side of the complainant and by the answers elicited from the witnesses of the complainant would improbabilise against the complainant and such degree shall be enough to rebut the presumption and recast the burden that creates doubts about the existence of a legally enforceable debt, the prosecution can fail. The accused can rely on the material 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. If he was not raising a probable defence, it means the accused was not able to contest the existence of a legally enforceable debt or liability.

4. How the adverse inference can be drawn:
The court may also draw adverse inference against a party who being in a position to adduce better evidence deliberately abstains from doing so. Section 114(g) enables the court to draw a presumption if the available evidence is not produced, it will rebut the presumption under section 118(a). So the burden of proof may be shifted by the presumptions of law or fact. Generally it is the duty of the party to lead the best evidence in his possession which could throw light on the issue in controversy and in case such material evidence is withheld, the court may draw adverse inference under section 114(g) of the evidence act notwithstanding that the onus of proof did not lie on such party and was not called upon to produce the said evidence. It is not easy to decide at what particular stage in the course of the evidence the onus shifts from one side to the other. When tribunal feels it cannot make up its mind as to which of the versions is true it will hold that the party on whom the burden lies has not discharged the burden. At this stage the wisdom of the adjudicator plays a pivotal role in deciding the matter. Now let us see how the wise King Solomon used his wisdom to find out truth. Long long ago queen Sheba on hearing the wisdom of the said King visited his Kingdom and tested his knowledge as follows:
Sheba tested Solomon’s ingenuity in action.
1. Dressing five boys and girls identically, she asked him to detect their sex. When he handed them bowls of water for them to wash hands, the girls, unlike the boys, rolled up their sleeves.
2. Sheba also brought Solomon two flowers alike in an appearance, but one was real while the other was artificial; he distinguished them by noting how bees swarmed to the flowers with the genuine flagrance.
3. Then, giving him a large emerald with a curved hole in the middle, she asked him to draw a thread through it; he sent for a silk warm, which crawled through the hole drawing with it a silken thread.
4. Sheba presented Solomom with the sawn trunk of a seedar tree, the ends cut off so that they looked the same; she asked Solomon which end had been the root, and which the branches. Solomon ordered the tree stump to be placed in water. When one end sank while the other floated, he said to her, “the part which sank was the root, and that which floated on the surface was the end containing the braches”. The difference between section 114 (g) and (a) of Evidence Act and 118 (a) Negotiable Instruments Act is, under the first the court has discretion to make the presumption or not, whereas under the second , the court is bound to start with the presumption  When both parties led evidence, the onus of proof loses all importance and becomes purely

5. When the complainant has to prove his case beyond reasonable doubt: The general presumption of innocence gets revived once the presumption 118(a) is rebutted by preponderance of probabilities and thereafter the burden shall be solely on the complainant to prove the charge beyond reasonable doubt. Admissions and improbabilities found in the evidence on the side of the complainant alone are enough to rebut the presumption. Then what are the improbabilities? For better understanding the following are some of the improbabilities:
1. Source of income of the complainant, and the stand of the accused right from the beginning happened to be consistent that he never borrowed any amount from the complainant and he never issued the cheque and he did not know him and he never seen him and there was no chance for the accused to have borrowed any amount from the complainant.
2. He issued the cheque for the purpose of security.
3. Non-examination of material witnesses
4. Absence of details of the date on which the loan was advanced so also the absence of any documentary or other evidence that any loan transaction has indeed been taken place.
5. Presenting the cheque immediately after altercation between parties to take revenge.

Meaning of the expressions “unless the contrary is proved” and “until the contrary is proved”: Section 118(a) and sec 139 although speak of presumption in favour of the holder of the cheque, it also included the provisos by incorporating the expressions “unless the contrary is proved” and “until the contrary is proved” which are the riders imposed by the legislature under the aforesaid provisions as the legislature chooses to provide adequate safeguards from harassing the innocents but this does not preclude the person against whom the presumption is drawn from rebutting it proving to the contrary. Once convincing rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts to the complainant who has also the legal burden.

So now it is settled law that the presumption mandated by section 139 does indeed include the existence of legally enforceable debt or liability. Otherwise the presumption under section 139 will become a dead letter. But at the same time it should not be forgot that the said presumption is a rebuttal presumption and if it is rebutted by the accused, the burden casts shifts on the complainant to prove the offence beyond reasonable doubt. And to rebut the said presumption the accused need not get into the witness box, it is suffice to show improbabilities from the oral and documentary evidence including the admissions of complainant and his witnesses.

So the initial evidential burden lies on the accused when the accused admitted the execution or execution is proved. If the accused discharged the onus of proof that the cheque was issued not for discharging legally enforceable debt by showing preponderance of probabilities and in that process the presumptions under section 118(a) and sec 139 disappear and the court may use sec 114 (g) if the complainant withholds any material evidence.

Dr. T. Srinivasa Rao, M.A., LL.M., P.G.D.I.R.P.M.,Ph.D
V Addl. District & Sessions Judge, Ranga Reddy District.