2021 (11) TMI 512 - HC - Indian Laws

Dishonor of Cheque - failure to establish the execution of the cheque by the respondent - rebuttal of presumptions under Sections 118 and 139 of the NI Act - HELD THAT - Whoever be the person handed over the cheque to the complainant the possession of Ext.P1 being with him, and Ext.P1 having been established by the complainant as drawn from the account of the accused maintained with his banker, in view of Section 20 of the N.I.Act, who authored the writings in it, is immaterial. Such being the context, undoubtedly the presumptions under Sections 118 and 139 of N.I.Act and Sections 103 and 114 of the Act would be attracted in favour of the complainant. Presumptions are rebuttable ones and as stated in the provisions, it is the burden of the accused to rebut those or establish to the contrary. Signature in Ext.P1 is not disputed by the accused. The trial court has found upon evaluation of the evidence and the legal provisions that it is the burden of the accused to adduce cogent evidence to rule out the grab of legal provisions - this Court has no hesitation to hold in the light of the discussions made hereinabove and also on the basis of the dictums of the Apex Court in the cases relied on by the learned counsel for the appellant, the trial court has gone wrong in making observations of the nature. The burden undoubtedly is on the accused to rebut the presumptions available to the complainant under Sections 118 and 139 N.I.Act. This Court on an appreciation of the entire evidence on record, is convinced that the accused was unsuccessful in discharging his burden to rebut the presumptions. Therefore, the prosecution ought not to have been held by the trial court as failed - the trial court shall restore the complaint back to it's file and dispose it of in accordance with law, within two months from the date of receipt of a certified copy of this judgment. Appeal allowed.

Summary

Issues:
1. Interpretation of burden of proof in a case under Section 138 of the Negotiable Instruments Act, 1881.
2. Application of presumptions under Sections 118 and 139 of the NI Act.
3. Consideration of burden of proof under Section 103 of the Indian Evidence Act, 1872.
4. Evaluation of evidence regarding the issuance and validity of a cheque.
5. Relevance of possession of the cheque and authorship of the writings on it.
6. Analysis of legal provisions and evidence to determine liability in a cheque bounce case.

Analysis:
1. The appellant contended that the burden lies on the accused to prove lack of valid consideration or enforceable debt for a cheque under Section 138 of the NI Act. The appellant argued that once the issuance of a cheque is admitted, presumptions under Sections 118 and 139 of the NI Act should apply unless rebutted by the accused. The trial court's judgment was criticized for allegedly ignoring the burden of proof as per Section 103 of the Indian Evidence Act.

2. The complainant claimed that a cheque was issued to him by the accused to settle a monetary liability. The accused disputed the writings on the cheque but did not deny the signature. Possession of the cheque and its linkage to the accused's bank account were deemed crucial, invoking presumptions under Sections 118 and 139 of the NI Act, shifting the burden to the accused to rebut these presumptions.

3. The trial court evaluated the evidence and legal provisions, emphasizing the accused's failure to provide sufficient evidence to counter the legal presumptions. Despite the accused not disputing the signature on the cheque, the court dismissed the complaint based on certain observations. The High Court held that the trial court erred in its analysis and conclusions, emphasizing the accused's burden to rebut the presumptions under the NI Act.

4. The High Court referenced legal precedents to support its decision, highlighting the necessity for the accused to disprove the presumptions under the NI Act. The court concluded that the trial court's dismissal of the complaint was erroneous, as the accused failed to discharge the burden of proof required to rebut the presumptions. Consequently, the High Court allowed the appeal, setting aside the impugned judgment and directing the trial court to reconsider the case in accordance with the law within a specified timeframe.