In Rangappa v. Sri Mohan [AIR 2010 SC 1898], the Supreme Court ruled that under Section 139 of the Negotiable Instruments Act (NI Act), if the accused admits his signature on the cheque, the court must presume the existence of a legally valid debt or obligation.
The accused can challenge this presumption. However, the accused can’t simply deny the debt. He/she must offer a reason or evidence to disprove the presumption. It means, that is a rebuttable presumption.
The Mode of Challenging the Presumption
The Section 138 of the NI Act provides a criminal penalty for a dishonored cheque. But the automatic presumption under Section 139 helps stop the complaints from dragging on.
To successfully challenge the presumption under Section 139 of the N I Act, the accused only needs to prove their side with “preponderance of probabilities”; that means they just need to show their argument is more likely to be true than otherwise.
Cheque Case is a Civil Wrong with a Criminal Penalty
Even though the cheque dishonour case is proceeded in a criminal court by applying the criminal procedures, it is treated inherently as a civil matter between two parties.
Because of this, if the accused can present a plausible defense that raises reasonable doubts about whether a true debt exists, the case against them might fail.
Accused Can Use Complainant’s Evidence to Disprove
The accused does not have to present all new evidence for the purpose. They can use the evidence already presented by the complainant to argue their case and raise a probable defense. In some situations, the accused might not need to provide any evidence of their own.
