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TMI Blog2024 (5) TMI 1103X X X X Extracts X X X X X X X X Extracts X X X X ..... any cogent evidence to show that the cheque was not issued in discharge of a debt.' The Respondent No. 2/accused, Raja Dutta is hereby convicted of the offence punishable under Section 138 of the Negotiable Instruments Act and is hereby directed to pay a fine of Rs. 8 lakhs within a period of two months from the date of this order in default to suffer imprisonment for six months and in default, the trial Court shall proceed in accordance with law. Application disposed off. - HON BLE JUSTICE SHAMPA DUTT (PAUL) For the Appellant : Mr. Manik Lal Poddar. For the State : None. For the Respondent No. 2 : None. JUDGMENT SHAMPA DUTT (PAUL), J.: The Appeal:- 1. The present appeal has been preferred against a judgment and order dated May 15, 2018 passed by the Learned Metropolitan Magistrate, 5th Court, Calcutta in Case No. C-11283 of 2014, TR No. 381 of 2014 under Section 138 of the Negotiable Instruments Act. The Prosecution:- 2. Due to financial scarcity, the petitioner gave interest free accommodation loan to the respondent No. 2 and the respondent No. 2 issued four cheques to discharge his liability against the said accommodation loan. The Respondent No. 2 issued cheque No. 756742 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as stated in this case to the Respondent/Accused and in discharge of his said liability, the cheques were issued by the Respondents, which on presentation were dishonoured and in spite of valid demand notice being served, the amount of the cheques was not repaid to the Appellant herein. Analysis of Evidence:- 14. The Respondent/Accused s wife deposed as Defence Witness 1, she has admitted the loan taken by her husband, but has deposed that the said loan was repaid. No documents has been placed and proved in support of such alleged repayment. Conclusion :- 15. The relevant findings of the trial Court dismissing the case of the Appellant/Complainant and acquitting the Respondent/Accused are as follows:- At this juncture, the Court is to see whether the debt of the instant case is legally enforceable against the accused person or not. The materials on record reveals that the complainant as PW-1 did not produce any document to show that the said amount of loan was shown in his Income Tax file. It is also appeared that the complainant as PW-1 did not produce any document to show that he has money lending authority. In view of the above discussion, it is seen that the amount allegedly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrovertible that proceedings under Section 138 of Negotiable Instrument Act, 1881 cannot be dismissed or stalled for non-compliance/violation of Section 169 SS of the Income Tax Act. Such violation may give rise to penal proceedings under the Income Tax Act, but the prosecution of the accused for the alleged dishonor of cheque under Section 138 of Negotiable Instrument Act does not become bad in law on this score. 17. Section 139 of the Negotiable Instruments Act:- 139. 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. 18. This Section raises presumption of law that cheque duly drawn was in discharge of debt or liability. However, presumption is rebuttable and onus lies on drawer to rebut it by adducing cogent evidence to the contrary. This presumption is not in conflict with human right of presumption of innocence of accused which prosecution is required to dislodge by proving its case against accused beyond reasonable doubt, Bir Singh v. Mukesh Kumar, (2019) 4 SSC 197. 19. Burden of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptions as to negotiable instruments. Until the contrary is proved, the following presumptions shall be made: (a) of consideration that every negotiable instrument was made or drawn for consideration, and that every such instrument, when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; * * * * * 139. 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. 14. There is a mandate of presumption of consideration in terms of the provisions of the Act and the onus shifts to the accused on proof of issuance of cheque to rebut the presumption that the cheque was issued not for discharge of any debt or liability in terms of Section 138 of the Act, which reads as under:- 138. Dishonour of cheque for insufficiency, etc., of funds in the account. Where any cheque drawn by a person on an account maintained by him with a banker for payment of any amount of money to another person from out of that account for the discharge, in whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant. 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 defendant-accused cannot be expected to discharge an unduly high standard or proof. 16. It is well settled that the proceedings under Section 138 of the Act are quasi-criminal in nature, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Sections 118 and 139 of the NI Act. This Court stated the principles in Kumar Exports [Kumar Exports v. Sharma Carpets, (2009) 2 SCC 513] 20. The accused in a trial under Section 138 of the Act has two options. He can either show that consideration and debt did not exist or that under the particular circumstances of the case the non-existence of consideration and debt is so probable that a prudent man ought to suppose that no consideration and debt existed. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complainant in a criminal trial. The accused may adduce direct evidence to prove that the note in question was not supported by consideration and that there was no debt or liability to be discharged by him. However, the court need not insist in every case that the accused should disprove the nonexistence of consideration and debt by leading direct evidence because the existence of negative evidence is neither possible nor contemplated. At the same time, it is clear that bare denial of the passing of the consideration and existence of debt, apparently would not serve the purpose of the accused. Some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re referred to in section 138 for the discharge, in whole or in part, of any debt or other liability. 14. In Bir Singh v. Mukesh Kumar, (2019) 4 SCC 197, after discussing the settled line of precedent of this Court on this issue, a two-Judge Bench held: 33. A meaningful reading of the provisions of the Negotiable Instruments Act including, in particular, Sections 20, 87 and 139, makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless he adduces evidence to rebut the presumption that the cheque had been issued for payment of a debt or in discharge of a liability. It is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer. If the cheque is otherwise valid, the penal provisions of Section 138 would be attracted. 34. If a signed blank cheque is voluntarily presented to a payee, towards some payment, the payee may fill up the amount and other particulars. This in itself would not invalidate the cheque. The onus would still be on the accused to prove that the cheque was not in discharge of a debt or liability by adducing evidence. [ ] 36. Even a blank cheque le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused may not need to adduce evidence of his/her own. (emphasis supplied) 17. For such a determination, the fact that the details in the cheque have been filled up not by the drawer, but by some other person would be immaterial. The presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. Even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheque was issued towards payment of a debt or in discharge of a liability. 24. In Rajaram S/O Sriramulu Naidu (since deceased) through L.RS. vs Maruthachalam (since deceased) through L.RS., Criminal Appeal No. 1978 of 2013, on January 18, 2023, the Supreme Court held:- 12. This Court in the case of Baslingappa v. Mudibasappa (supra) has summarized the principles on Sections 118 (a) and 139 of the N.I. Act. It will be relevant to reproduce the same. 25. We having noticed the ratio laid down by this Court in the above cases on Sections 118 (a) and 139, we now summarise the principles enumerated by this Court in following manner: 25.1. Once the execution of cheque is admitted Section 139 of the Act manda ..... X X X X Extracts X X X X X X X X Extracts X X X X
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