Complainant must display financial capacity to lend money, rules HC

Saurabh Malik

Chandigarh, March 5

In a significant judgment liable to change the way cheque bounce cases are adjudicated, the Punjab and Haryana High Court has held that the complainant’s failure to display his financial capacity to advance the amount allegedly lent would shift the burden on him to prove his financial capacity to lend the money.

The ruling by Justice Vinod S Bhardwaj came in a case where the complainant alleged he had advanced Rs 1.35 lakh to the accused without written endorsement and “out of relationship amongst the parties”. But he failed to adduce proof of income and did not even bring forth his account statements or the banking details during the course of trial. The complainant also failed to establish availability of “such a huge amount” considering that he earned a meager monthly salary of Rs 15, 000, while working as a labourer in a factory and was staying in a rented accommodation in Rajasthan.

Cheque bounce case

Merely by being in possession of cheque, the complainant does not stand absolved of his obligation to prove existence of liability and a legally enforceable debt prior to issuance of the cheque. —Justice Vinod S Bhardwaj

Referring to a plethora of judgments, Justice Bhardwaj asserted the Supreme Court in a case held that the judgment of conviction suffered perversity and was liable to be set aside after noticing that evidence was not led before the court to indicate the complainant’s financial capacity to lend money.

Justice Bhardwaj observed the accused in the case in hand took a specific plea that the cheque was stolen from his shop. Besides, there was no plausible reason for the complainant to lend money to a person with whom he had no relationship and that too without execution of documents. He further observed: “Merely by being in possession of cheque, the complainant does not stand absolved of his obligation to prove existence of liability and a legally enforceable debt prior to issuance of the cheque.”

Justice Bhardwaj added the petitioner had denied issuance of cheque, receipt of money from the complainant or any transaction with him. The presumption of law under Section 139 of the Negotiable Instruments Act would not continue to exist against the accused-petitioner. The burden would shift on the complainant to establish that the transaction had duly taken place and that the cheque was issued to him in discharge of a legally enforceable debt.

Acquitting the accused after setting aside the conviction orders by the courts below, Justice Bhardwaj added an accused was not expected to prove his defence beyond reasonable doubt as expected of a complainant in a criminal trial. The accused may adduce direct evidence to prove absence of debt or liability to be discharged. The court need not insist in every case that the accused should disprove the non-existence of consideration and debt by leading direct evidence.