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TMI Blog2018 (7) TMI 2332X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Under Section 139 would operate. The Respondent failed to rebut the presumption by adducing any cogent or credible evidence. Hence, his defence is rejected. The impugned order passed in Criminal Revision Petition is hereby set aside, and the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory Note for Rs. 51,00,000/- in favour of K. Posa Nandhi-the Appellant in the Second Appeal. The Promissory Note records that it was being issued against a loan. The Respondent also issued two cheques on the same date, one for Rs. 37,00,000/- in favour of K. Posa Nandhi, and the other for Rs. 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 Section 138 of the N.I. Act calling upon the Respondent to discharge their debt/liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent with respect to the 10 blank cheques issued to the Appellant in 1995. The Respondent failed to place any material on record to show that 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 Section 138 of the N.I. Act, and sentenced him to undergo R.I. for six months and Fine of Rs. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used had not denied either the issuance of the cheques, or his signatures on the Pronote and cheques. The denial was only with regard to the circumstances, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability1. 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 disbelie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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