Evidences in ni case

Sir,

Liability/Debt normally arises from or are linked to an agreement. As per Indian Contract Act, agreements can be both oral and written. Both oral and written agreements are legally valid. But to prove oral agreements in the court is extremely difficult. So, while it is not mandatory to have a written evidence for a legally enforceable debt, it is practically advisable and of utmost importance to have everything in writing.

FRIENDLY LOANS, HANDLOANS DO NOT ATTRACT

 NI 138 CHEQUE LAW.

Many loan sharks take the plea that they had given hand loan or friendly loan, many HIGHCOURTS have given decisions that cheques issued for such loans do not attract the penal provisions of CHEQUE LAWS since it is not LEGAL LIABILITY.

However many accused or their advocates take such pleas at fag end of the case and hence do not succeed. If you are an accused for such case do proper home work and bring on record that:-

a)   You are not a friend of the complainant.

b)   He / she has given similar loans to many people.

c)   Bring on record all such cases and confront the complainant in cross.

d)   Cross examination is most effective tool , if proper advance preparation is done any cheque case can be demolished in cross alone.

e)   If you have not taken such precautions in lower court than you will not be allowed to take such defense in higher courts.

complainant need not be over confident , it will be next to impossible to win any NI 138 case if contested aggressively by accused  from day one since the case has to be proved beyond doubt at many points that is  a) there was legal liability b) cheque was actually given by the accused from his account , presented  to the bank of the complainant  and returned  for want of funds e) proper dully authorized  legal notice was given f) such legal notice was received by the accused g) thereafter proper pleadings are made and  all documents are attached at first instance while filing the case.

If taken up properly by the accused:

The liability / debt as shown by the complainant has to be proved by the complainant beyond doubt. Nowhere in the Act it is written that presumption is with respect to liability amount or cheque amount.

Liability is presumed, on issuing cheque.

Burden on accused to prove no liability. 

Documentary Evidence is necessary, only Verbal evidence are not sufficient. 

Accused must not accept his liability in his cheif/ cross. 

For the aforesaid reasons, we are of the view that where, in a suit on a promissory note, the case of the defendant as to the circumstances under which the promissory note was executed is not accepted, it is open to the defendant to prove that the case set up by the plaintiff on the basis of the recitals in the promissory note, or the case set up in suit notice or in the plaint is not true and rebut the presumption under Section 118 by showing a preponderance of probabilities in his favour and against the plaintiff. He need not lead evidence on all conceivable modes of consideration for establishing that the promissory note is not supported by any consideration whatsoever. The words until the contrary is proved‟ in Section 118 do not mean that the defendant must necessarily show that the document is not supported by any form of consideration but the defendant has the option to ask the Court to consider the non-existence of consideration so probable that a prudent man ought, under the circumstances of the case, to act upon the supposition that consideration did not exist. Though the evidential burden is initially placed on the defendant by virtue of Section 118 it can be rebutted by the defendant by showing a preponderance of probabilities that such consideration as stated in the pronote, or in the suit notice or in the plaint does not exist and once the presumption is so rebutted, the said presumption „disappears‟. For the purpose of rebutting the initial evidential burden, the defendant can rely on direct evidence or circumstantial evidence or on presumptions of law or fact. Once such 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 back to the plaintiff who has also the legal burden.

G. Vasu vs. Syed Yaseen Sifuddin Quadri, AIR 1987 AP 139.

@Ramesh. Hope you are complainant, not the accused. In Kundan Lal Rallaram vs. Custodian, Evacuee Property, Bombay, AIR 1961 SC 1316, Subba Rao, 1, as the learned Chief Justice then was, held that while considering the question as to whether burden of proof in terms of Section 118 had been discharged or not, relevant evidence cannot be permitted to be withheld. If a relevant evidence is withheld, the Court may draw a presumption to the effect that if the same was produced might have gone unfavourable to the plaintiff. Such a presumption was itself held to be sufficient to rebut the presumption arising under Section 118 of the Act stating:

“…….Briefly stated, the burden of proof may be shifted by presumptions of law or fact, and presumptions of law or presumptions of fact may be rebutted not only by direct or circumstantial evidence but also by presumptions of law or fact. We are not concerned here with irrebuttable presumptions of law.”

48. Two adverse inferences in the instant case are liable to be drawn against the Second Respondent:

(i) He deliberately has not produced his books of accounts.
(ii) He had not been maintaining the statutory books of accounts and other registers in terms of the bye-laws of Cochin Stock Exchange.

(Meaning: Plaintiff was asked by defendant to submit some relevant evidence to prove his case, if that if produced, it may go unfavorable to plaintiff. So he pleads permission to withhold the submission of that relevant evidence, which cannot be permitted by court. Defendant who is facing S.138 charges of cheque bounce in this case asked plaintiff to submit books of account and he shall not be permitted to plead that they are irrelevant evidence). 

Hope you understood.

Under S.139 It is presumbed that the "HOLDER"   "RECEIVED" the cheque for certain liability.... and S.138 talks of DRAWN by... 

1. Drawing / Execution of cheque is not the same as RECEIVING.... So there is no presumption with respect to execution.

2. HOLDER : is misunderstood as the POSSESSOR, but S.8 of NI Act clearly states that the POSSESSOR of the cheque with dues. So a mere possession cannot make any one HOLDER, he has to prove the dues / debt to become the holder, then only he shall get the benefit of preseumption.

Under S.139, almost invariably courts are violating the fundamental postulate of our judicial system that is Innocent till proven guilty. The complainant has to prove the liability amount beyond doubt as per law, the complainant has to prove the execution of cheque under S.67 of evidence Act.

The difference between earlier civil and present criminal proceeding under S.138, is just that criminality aspect is added. It is impossible in the civil case to get the decree without proving the liability, so there is absolutely no question of getting conviction without proving the liability.

Any doubts: contact at: advocate.dma@gmail.com