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TMI Blog2018 (8) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan. In the present case, the respondent has failed to produce any credible evidence to rebut the statutory presumption - The appellants have proved their case by overwhelming evidence to establish that the two cheques were issued towards the discharge of an existing liability and legally enforceable debt. The respondent having admitted that the cheques and Pronote were signed by him, the presumption u/s 139 would operate. The respondent failed to rebut the presumption by adducing any cogent or credible evidence. Appeal allowed - decided in favor of appellant. X X X X Extracts X X X X X X X X Extracts X X X X ..... ing issued against a loan. The respondent also issued two cheques on the same date, one for ₹ 37,00,000/- in favour of K.Posa Nandhi, and the other for ₹ 14,00,000/- in favour of T.P.Murugan, towards discharge of their liability for the investments made in M/s. Maanihada Tea Produce Company. (2.3) The cheques were presented for encashment on 03.02.2003 by the appellants, which were dishonoured due to "Stop Payment" instructions issued by the respondent. (2.4) The appellants issued the statutory notices under S.138 of the N.I. Act calling upon the respondent to discharge their debt/liability and clear their dues. (2.5) The respondent vide his reply dated 17.02.2003 refuted the claim of the appellants. (2.6) The appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at he had ever asked for return of the 10 blank cheques, allegedly given by him to the respondent, for seven years. That after going through the detailed evidence adduced by the parties, the Trial Court held that the Cheques and Pronote were issued for repayment/discharge of a lawful debt. The respondent was found guilty under S. 138 of the N.I. Act, and sentenced him to undergo R.I. for six months and Fine of ₹ 5000/-, failing which, he shall undergo one month's R.I. (4) Aggrieved by the said judgment, the respondent-accused filed Criminal Appeal Nos. 437-438 of 2006 before the District and Sessions Judge, Fast Track Court No. III, Coimbatore. The District and Sessions Judge held that the presumption under Sections 118 and 139 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, the manner and the period during which the cheques were issued. The High Court took the view that the burden cast on the respondent-accused was only to raise a doubt in the mind of the Court about the nature of the transaction. The Ld. Single Judge accepted the contention of the respondent that since the cheques and the Pronote were issued on the same date, it could only be treated as a security, and was not towards any debt or liability. By raising a doubt with respect to the circumstances in which the Pronote and cheques were issued, the respondent had discharged the presumption under S. 139 of the N.I. Act. The High Court held that the Trial Court and the Sessions Court erred in applying the legal principles of standard of proof fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Muniyappan and Another[(2001) 8 SCC 458; para 6] and Rangappa vs. Shrimohan [(2010) 11 SCC 441; para 26]). This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan. In the present case, the respondent has failed to produce any credible evidence to rebut the statutory presumption. This would be evident from the following circumstances:- (i) The respondent-accused issued a Pronote for the amount covered by the cheques, which clearly states that it was being issued for a loan; (ii) The defence of the respondent that he had allegedly issued 10 blank cheques in 1995 for repayment of a loan, has been disbelieved both by the Trial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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