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TMI Blog2021 (1) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... eque i.e., presented to the Bank would be presumed to be issued for the purpose of discharge of whole or in part of any debt or other liability. Therefore, this provision acts as reverse burden on respondent/accused to prove to the contrary to rebut the said presumption and to prove to contrary that there does not exist or that there never existed any legally recoverable debt or liability. In the present case, in the cross-examination of P.W.1, he has categorically admitted that respondent was due only ₹ 41,545/- Therefore, this amount of ₹ 41,545/- is legally recoverable debt assuming and believing the statement of P.W.1 and to substantiate the same strangely. P.W.1 has himself produced and got marked Ex. P.7 which shows outstanding balance of respondent ₹ 41,545/- as on 25.10.2004 - Admittedly, even according to P.W.1-complainant, no cement was purchased by respondent after 08.09.2003, and according to the appellant, as on 08.09.2003 respondent was due ₹ 49,545/- as per their statement. But somehow strangely appellant comes with the theory that respondent has got issued a cheque on 11.10.2004, wherein he has not only agreed to pay ₹ 41,545/- but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his firm in the name of M/s. Gajanan Cement Dealer at Bailhongal. Appellant and respondent have been dealing in cement business transactions where respondent was purchasing cement from appellant company. Towards one such part payment of cost of cement supplied by appellant company, respondent got issued a cheque bearing No. 266124 dated 11.10.2004 for a sum of ₹ 64,045/-. 3. On presentation of the said cheque, the same came to be dishonoured with an endorsement 'insufficient funds' on 23.10.2004. Thereafter appellant got issued a legal notice to respondent on 9.11.2004 through registered post which was served to respondent on 13.11.2004. Despite receipt of legal notice, respondent did not repay the amount demanded therein and neither did he reply to the said notice. Thereafter complainant lodged a complaint against respondent for the offence punishable under section 138 of Negotiable Instruments Act. 4. On cognizance being taken for the said offence, presence of accused was secured and he was enlarged on bail. Plea of accused was recorded, he pleaded not guilty and claimed to be tried. Accordingly he was tried. 5. In order to prove the case, complainant got ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as at one breath the respondent has stated that the cheque was issued blank and for security purpose and at another breath he has stated that the cheque was not issued. Therefore, trial Court ignored these aspects of inconsistency made by the respondent. 10. Learned counsel further contends that the respondent has failed to rebut the presumption cast in favour of the appellant and therefore, when there is no rebuttal to the existing presumption in favour of the appellant, the trial Court ought to have convicted the respondent rather than acquitting him. Learned counsel further contends that the amount of ₹ 41,545/- is admittedly due by respondent to appellant and since one Mallikarjuna Sangannnwar, who is also the dealer in cement, was due in a sum of ₹ 21,500/- to the appellant, respondent himself agreed to pay the amount which was due on behalf of Mallikarjuna Sangannnwar, who belongs to same town as that of the respondent. Therefore, when the respondent has admitted issuance of cheque and signature on it, the presumption under Section 139 of NI Act is in favour of the appellant and the same has not been rebutted by the respondent in the present case. When there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erable debt is not established by the appellant. These materials have been correctly evaluated by the trial Court and hence, has rightfully convicted the accused. Further, judgment of acquittal passed by trial Court is very well reasoned and considered order, which does not call for interference by this Court. Hence, on these grounds he seeks to dismiss the appeal and confirm the judgment of acquittal passed by trial Court. 13. Having considered the submission of the learned counsel for appellant and learned counsel for respondent, the points that arise for consideration before this Court are: (1) Whether respondent has rebutted the presumption in favour of appellant under Section 139 of NI Act? (2) Whether the judgment of trial Court deserves to be set aside and reversed? 14. In order to answer these points let us have a cursory look at the facts of the case and evidence adduced by the parties. 15. It is not in dispute that appellant and respondent are well known to each other due to their business transactions. It is not in dispute that respondent had purchased the cement from the appellant and towards the same he used to make payment by way of cheque. Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003 the said Mallikarjun Sangannavar was due a sum of ₹ 22,500/- to appellant. Therefore, it is not in dispute now that respondent was only liable to pay a sum of ₹ 49,545/- as that was legally recoverable debt from respondent to appellant. The balance amount of ₹ 22,500/- was to be recovered from Mallikarjun Sangannavar by appellant which is not in dispute and this fact admitted by appellant. Now in the present case, the cheque is presented for ₹ 64,045/- by appellant. It is contended by appellant that respondent had agreed to pay the amount of said Mallikarjun Sangannavar of ₹ 22,500/- and hence issued the cheque for ₹ 64,045/- in favour of appellant as Mallikarjun Sangannavar belonged to the same town as that of respondent. 17. Now, it has to be seen whether the said aspect of respondent agreeing to pay the amount on behalf of Mallikarjun Sangannavar of ₹ 22,500/- has been proved by the appellant pursuant to the rebuttal, if any, made by respondent. 18. In this view of the matter, it is necessary to extract proviso (a), (b) and (c) of Section 138 of the Act, which reads as under: Dishonour of cheque for insufficiency, etc., o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered and cognizance being taken, the presumption in law will act in favour of appellant as any cheque i.e., presented to the Bank would be presumed to be issued for the purpose of discharge of whole or in part of any debt or other liability. Therefore, this provision acts as reverse burden on respondent/accused to prove to the contrary to rebut the said presumption and to prove to contrary that there does not exist or that there never existed any legally recoverable debt or liability. It is relevant to extract Section 139 of N.I. Act, which reads as under: Presumption in favour of holder.-It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque of the nature referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. 20. In the present case, in the cross-examination of P.W.1, he has categorically admitted that respondent was due only ₹ 41,545/- Therefore, this amount of ₹ 41,545/- is legally recoverable debt assuming and believing the statement of P.W.1 and to substantiate the same strangely. P.W.1 has himself produced and got marked Ex. P.7 which shows outstanding balance of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant to bring this aspect before the Court and to prove beyond satisfaction of the Court to succeed in the matter. Whereas, appellant has not chosen to place any material except merely stating that cheque has been issued towards payment of legally recoverable debt of ₹ 64,045/- by respondent. If this was the truth behind issuance of Ex. P.2, appellant nothing has been stated in the legal notice which was issued as per Ex. P.5. It is noticed that neither in the legal notice nor in the complaint and neither in the evidence led by P.W.1 factual aspect is narrated, therefore, it is for appellant to prove of rebuttal of presumption that there existed legally recoverable debt or liability of ₹ 64,045/- as against the respondent. 26. In order to rebut the presumption, there has to be preponderance of probabilities and probable defence which is required to be raised by respondent, as there is already a presumption in favour of appellant that the cheque is issued towards discharge of legally recoverable debt either whole or in part. When once the rebuttal has been established and proved to the contrary by the respondent/accused, then the burden shifts on appellant to satisfy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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