Presumption of law & burden of proof in special reference to cheques

The presumption of law and consequent burden of proof has significant bearing on the length of any litigation and also on the outcome of the litigation. Just to indicate the crucialness of aforesaid legal expressions, whereas a presumption of law has the effect of shifting the burden of proof, a misplaced burden of proof may frustrate the whole trial and may result in miscarriage of justice.

In this write up the aforesaid legal expressions is dealt with special reference to presumption of law in respect of negotiable instruments like Bills of exchange, promissory Notes, Cheque etc.

First I will try to import the concept of presumption of law; then burden of proof; and then will apply both these expressions to negotiable instruments.

It is necessary to analyze what the rule about the rebuttable and irrebuttable presumption of law really means.

Presumption of law

Presumption of law implies the presumption of existence or the absence of a fact which is alleged to exist or not exist. Presumption of law implies that the Courts / judges whilst dealing with a factual backdrop of situation[*], considers certain facts, which are the subject matter of controversy at hand, as proved unless disproved, or regards them as not proved unless proved, [*] having regard to the social settings in which we live, the general behaviour of humans in given situations, the fallible and fragile propensity of humans, the natural course of events, the constitution of the human mind, the springs of human action and the usage and habits of the Society. [Sections 4 & 114 Evidence Act]

Black's Law Dictionary 5th Edition, 1979, defines 'Presumption' as under:

"A presumption is a rule of law, statutory or judicial, by which finding of a basic fact gives rise to existence of presumed fact, until presumption is rebutted."

The same dictionary defines 'Rebut' as under:

"In pleading and evidence, to defeat, refute, or take away the effect of something. When a plaintiff in an action produces evidence which raises a presumption of the defendant's liability, and the defendant adduces evidence which shows that the presumption is ill-founded, he is said to "rebut it."

A fact “X” which has relevance in the proof of fact “Y” and inherently has some degree of probative or persuasive value in that behalf, may be weighed by a judicial mind.

When the law makes a rule providing for a rebuttable presumption that, on proof of fact “X”, fact “Y” shall be deemed to be proved unless the contrary is established, what the rule purports to do is to regulate the judicial process and to provide that the Courts will draw the inference from the proof of fact “X” that fact Y” has also been proved, unless the contrary is established.

In other words, the rule takes away judicial discretion, as whether to attach or not the due probative value to fact “X”; and requires prima facie the due probative value to be attached in the matter of the inference as to the existence of fact “Y”, subject, of course, to the said presumption being rebutted by proof to the contrary.

Thus, the rule of rebuttable presumption adds statutory force to the natural and inherent probative value of fact “X” in relation to the proof of the existence of fact “Y”.

In regard to the category of facts in respect of which an irrebuttable presumption is prescribed by law, the position is that the inherent probative value of fact “X” in that behalf is very great and it is very likely that when it is proved in a judicial proceeding, the judicial mind would normally attach great importance to it in relation to the proof of fact “Y”.

In both the cases, rebuttable presumption or irrebuttable presumption, the law purports to assist the judicial mind in appreciating the existence of facts. In one case the probative value is statutorily strengthened but yet left open to rebuttal, in the other case, it is statutorily strengthened and placed beyond the pale of rebuttal.

A rebuttal presumption of law only makes a prima facie case for party in whose favour it exists. It indicates the person on whom the duty lies of going forward with evidence on the fact presumed, and when that party has produced evidence fairly and reasonably tending to show that the real fact is not as presumed, the purpose of presumption is over.

Burden of Proof

Section 101 of Evidence Act incorporate the first principle of any litigation that the burden of proving facts alleged / asserted, would always lie upon the person who comes to the Court, claiming certain rights or attributing certain liabilities upon the opposite party; and until such burden is discharged, the opposite party is not obliged to lead evidence to prove his defense.

However, the law recognizes some exceptions to this first principle. They are –

a. When, in respect of a fact, a rebuttal presumption of law exists in favour of the party, the burden to prove the said fact lies upon the opposite party to prove / disprove / rebut the presumption of law, and cause the burden to be shifted again upon the original party.

b. Having regard to the natural course of events, ordinary and prudent human conduct and behaviour, recognized u/s 114 of Evidence Act, the burden of proof may shift upon the opposite party;

c. Where a “Fact” to be proved is especially or substantially within the knowledge of the opposite party, and in the backdrop of the circumstances, the opposite party would be the only person who would be in the position to throw light on the said factual situation, the burden of proof of that fact may shift upon that person; (Section 106 Evidence Act)

d. Where any of the party makes an affirmative existence of a “Fact”, the burden to prove the said fact lies upon that party, irrespective if he is the Plaintiff or defendant. Like for example, where any of the party alleges fraud, misrepresentation, mistake, coercion, admission, confession etc, the burden lies upon him to prove such fraud etc. (Section 103 Evidence Act).

e. Where the accused takes plea that his case false within the exceptions, like of plea of alibi, plea of self defense, plea of intoxication, plea of minor, the burden falls upon him to prove such plea, and the law will presume the absence of such alibi, self defense etc. (Section 105 Evidence Act).

f. The burden to prove certain facts may fall upon the other party where in a case the other party admits the case of the first party. In these type of case, if the opposite party fails to lead any evidence thereby explaining the circumstances under which the purported admission was made, the first party would be entitled for the judgment. (Section 102 Evidence Act)

The one other test which may be resorted to, to shoulder the burden of proof of a particular fact – which party is in the best position to enlighten the “fact in dispute”. This test has some resemblance to mandate of sections 103 and 106 stated hereinabove.

The other test to determine on whom the burden of proof lie, the test is – which party would be successful if no evidence at all, or no more evidence, as the case may be, were given. The application of principles of presumption of law will be significant in this respect.

Before a burden of proof of a particular fact is shouldered upon any party, the conceptual presumption of law in relation to the fact under dispute is very critical. Section 114 of Evidence Act would play a significant role in adjudging the abstract but genuine presumption of law. The usual course of human nature, conduct and behaviour; the natural course of events, would always regulate the burden of proof.

In this aforesaid discussion it is equally important to know as how the law defines a prudent and reasonable man, for, it would have a huge bearing on raising a presumption and placing a burden of proof.

Who is a Prudent Man: A prudent man is a wise man, may not be a genius. A prudent man is not in a hurry. He is not influence by his emotions and act after weighing the occasion. He deliberates. He pauses. He rethinks and willing to learn. He agonizes. He is willing to see the point of view, which was never in his mind. He may not be learned but has robust common sense and has basic instinct that move man and woman.  are those who think and reason intelligently; is a person having the power of self control to be expected of an ordinary person of the age; a person exercising those qualities of attention, knowledge and intelligence and judgment, which requires of its members for the protection of their own interests and the interests of others.

Coming to Negotiable Instruments, Sections 118 and 139 of Negotiable Instruments Act raises a presumption of law that these negotiable instruments were executed for valuable consideration / in discharge of whole or in part, of any debt or other liability, and the burden to prove otherwise would lie upon the drawer of the instrument.

However, in the backdrop of mandate of section 67 of Evidence Act, which say that if a document is alleged to be signed or to have been written wholly or in part by any person, the signature or the handwriting of so much of the document as is alleged to be in that person's handwriting must be proved to be in his handwriting, by judicial decisions, and rightly so, it has been held that notwithstanding the presumption of valuable consideration, there is no presumption of law as to the execution of the concerned negotiable instrument; and the burden lies upon the shoulder of the Plaintiff / complainant to prove the due execution of the negotiable instrument.

This presumption of law appears quite reasonable in so far as civil proceedings are concerned, for, in civil proceedings, the drawer of the negotiable instruments is obliged by law traverse the allegation of execution of the negotiable instrument.

In criminal proceedings whereas the accused live under the umbrella of constitutional protection, and whereas now by legislative fiction, the dishonour of cheque is made a criminal offence, notwithstanding the presumption of law of the existence of valuable consideration etc, the absence of presumption of law as to “execution of the concerned negotiable instrument”, frustrates the whole idea of inventing this law of 138.

Let me try to justify why we may differ from “absence of presumption of law” which is applied in civil proceedings, and we may safely raise a presumption of law in every civil and criminal proceedings involving “cheques”, as to due execution / signing of cheque.

The marked distinction between traditional Bills of Exchange / promissory Notes on one hand and Cheques on the other hand, may be noted.

a. Whereas Bills of Exchange / promissory Notes have the vulnerability of being easily forged, it is nearly impossible to forge a cheque.

b. It can safely be said that cheques are being always stored in safe custody of the drawer.

Further, if there is a presumption of law as to cheque being received by the drawer in discharge of debt or other liability (S.139), there has to be a presumption of law as to legitimacy of every act which precedes receipt of cheque, including the signing of cheque.

Therefore, an exception may be carved out in respect of cheques in so far as raising a rebuttable presumption that it was duly signed by the drawer.

And having raised such a presumption does not in any way prejudice the accused, for, he will have all the opportunity to rebut this presumption during cross examination or by way of leading his own evidence;

but in the pretence of rebutting the presumption, he cannot merely ask for opinion of handwriting expert, so as to ascertain the authenticity of the signature appearing in the cheque. In case he claims he has not signed the cheque, he has to first lead evidence to show that the concerned cheque was stolen from his custody, the date when he came to know of such theft, the steps he took to avoid possible misuse of stolen cheque, for, any man of ordinary prudence would take requisite steps in case he comes to know that his valuable security is stolen and may be misused.

There is yet another serious fallacy in merely allowing the Applications of Accused u/s 243(2) of CrPC, 1973, to send cheque to handwriting expert, inter alia, to determine the signature on the cheque.

Assumingly, the hand writing expert gives the opinion that signature on the cheque does not match with the signature occurring in Bank records. Then the accused would claim acquittal on the basis of this finding.

I remember I have read a ruling of Apex Court wherein the cheque was returned due to mismatch of signature. The accused was still held guilty. It was observed that whereas the complainant / payee are not aware of the signature of the drawer / accused, the drawer of the cheque may play mischief by giving such cheque to the payee bearing their false or deliberately made little distorted signature, causing the return of the cheque by the drawee Bank, and then would take the defense of having not signed the cheque.

The evidence which is to be led by accused in these situations is to demonstrate the “factum of actual theft” of concerned cheque and not the mere matching or mismatching of signature.

Therefore, in 138 proceedings, the accused should be barred from merely contending that he has not signed the cheque, and before asking for opinion of handwriting expert, it is imperative that he must say that the concerned cheque was stolen from his custody, the date when he came to know of such theft, the steps he took to avoid possible misuse of stolen cheque, for, any man of ordinary prudence would take requisite steps in case he comes to know that his valuable security is stolen and may be misused. If the trial court is reasonably satisfied that the cheque under consideration might have stolen from the custody of accused, he may then send the cheque for opinion of handwriting expert.

The law would fail to suppress the mischief for which they were invented if the presumption of law is not correctly applied.

Please correct me if my contentions are misconceived.

Thank you.

Sandeep Jalan

Advocate

Mumbai