2019 (9) TMI 1210 - HC - Indian Laws

Dishonor of cheque - insufficiency of goods - rebut of presumption under Section 139 of the Act - section 138 of NI Act - HELD THAT - The petitioner has admitted the cheque in question as well as his signatures on the same. He has also admitted the execution of the loan receipt , as well as his signatures and handwriting on the same. In view of the above admitted facts, this Court is of the view that the petitioner has admitted the existence of the debt. At the same time, he failed to rebut the presumption by raising any probable defence. It is thus held that the petitioner has failed to discharge the onus and the presumption under Section 118A and 139 of NI Act has remained unrebutted. Petition dismissed.

Summary

Issues:
1. Conviction under Section 138 of the Negotiable Instruments Act, 1881.
2. Rebuttal of presumption under Section 139 of the Act.
3. Examination of evidence and legal precedents.

Analysis:

1. Conviction under Section 138 of the Negotiable Instruments Act, 1881:
The petitioner challenged the judgment upholding his conviction under Section 138 of the Act. The trial court had convicted him, directing a fine payment of ?25 lacs, with ?24 lacs as compensation to the complainant and ?1 lakh to be deposited with the State. The petitioner argued that the cheque was given as security and denied the existence of a legally enforceable debt. However, the courts found that the petitioner had taken loans from the complainant and issued a cheque that got dishonored due to insufficient funds.

2. Rebuttal of presumption under Section 139 of the Act:
The petitioner tried to rebut the presumption under Section 139 by claiming the cheque was for security. However, his admission of signatures on the cheque and the loan receipt, along with the handwriting on them, worked against his defense. The courts found that the petitioner failed to provide a probable defense to rebut the presumption of liability under the Act. The petitioner's admission of debt and lack of a strong defense led to the conclusion that he did not discharge the onus to rebut the presumption.

3. Examination of evidence and legal precedents:
The courts examined the evidence, including the loan receipt, cheque, and witness testimonies, to establish the existence of a debt and the petitioner's liability. Legal precedents like Rangappa vs. Sri Mohan and Hiten P Dalal vs. Bratindranath Banerjee were cited to support the arguments related to statutory presumptions and burden of proof in such cases. The judgment also referred to the recent case of Bir Singh v. Mukesh Kumar, emphasizing that the onus to rebut the presumption of a cheque issued for a debt or liability lies on the accused.

In conclusion, the High Court dismissed the petition, upholding the concurrent findings of the lower courts. The petitioner's failure to provide a strong defense and rebut the statutory presumptions under the Negotiable Instruments Act led to the affirmation of his conviction under Section 138.