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TMI Blog2020 (9) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... to as "the accused") under Section 138 of the Act and as per the allegations contained in the complaint, parties entered into an agreement dated 29.10.2010 (Ex.D/1) by which complainant intended to purchase a house owned by the accused, and therefore, advance money of Rs. ten lacs was paid to the accused. Due to some issues, agreement could not lead to execution of sale-deed and agreement aborted. Result was obvious that complainant sought return of advance money (Rs. ten lacs) paid to the accused. Apparently some amount was returned back in cash and part of the amount as alleged was tried to be returned back through cheque No.722569 dated 13.1.2011 of Syndicate Bank (Ex.P/1) amounting to Rs. 2,10,000/-. 4. Said cheque was put for encashment by the complainant but dishonoured due to insufficiency of funds on 6.5.2011. Thereafter statutory notice was sent and thereafter private complaint under Section 138 of the Act was preferred. Accused appeared in fray and raised the defence about giving the cheque to the complainant as security. It was her version that she issued the cheque to Mohsin (mediator in the deal) for his payment, but Mohsin gave this cheque to the complainant and com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hsin, then the defence raised by the accused would have been different, but by not adducing the evidence of Mohsin, the said defence regarding cheque issued for security purpose could not have been taken by the accused. He relied upon the decision of Kerala High Court in the case of P.N.Salim v. P.J.Thomas and another reported in 2004 Cri.L.J. 3096 to submit that once Mohsin has not been examined, then presumption is not rebutted regarding nature of instrument. He prayed for setting aside of the impugned judgment and prayed that appeal be allowed. 10. On the other hand, learned counsel for the respondent opposed the prayer and submitted that trial Court rightly passed the impugned judgment. He supported the impugned judgment. He submits that accused rightly rebutted the presumption. He prayed for dismissal of the appeal. 11. Heard learned counsel for the parties and perused the record. 12. In the case in hand, complainant is asserting the facts on the basis of agreement between the parties for purchase of a house. The said agreement has been produced by the accused vide Ex.D/1, and therefore, it is an admitted document. The said agreement dated 29.10.2010 indicates that complain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the N.I. Act is in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein there is existence of legally enforceable debt or liability can be contested. In Paragraph 27 this Court observed and has held as under: "27. Section 139 of the Act is an example of a reverse onus clause that has been included in furtherance of the legislative objective of improving the credibility of negotiable instruments. While Section 138 of the Act specifies a strong criminal remedy in relation to the dishonour of cheques, the rebuttable presumption under Section 139 is a device to prevent undue delay in the course of litigation. However, it must be remembered that the offence made punishable by Section 138 can be better described as a regulatory offence since the bouncing of a cheque is largely in the nature of a civil wrong whose impact is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendantaccused cannot be expected to discharge an unduly high standard or proof." 6.3 In the case of Kishan Rao ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19. The use of the phrase "until the contrary is proved" in Section 118 of the Act and use of the words "unless the contrary is proved" in Section 139 of the Act read with definitions of "may presume" and "shall presume" as given in Section 4 of the Evidence Act, makes it at once clear that presumptions to be raised under both the provisions are rebuttable. When a presumption is rebuttable, it only points out that the party on whom lies the duty 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 the presumption is over." 6.4 Now so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a presumption in favour of the complainant that there exists legally enforceable debt or liability and thereafter it is for the accused to rebut such presumption by leading evidence." 15. Perusal of the above discussion makes it very clear that if any cheque is given in security, then presumption of legally enforceable debt or liability exists which has to be rebutted by the accused to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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