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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 ..... es were drawn on ICICI Bank Ltd., R.N. Mukherjee Road Branch, Kolkata, in favour of the petitioner and the petitioner deposited the Cheques with Indian Overseas Bank, Strand Road Branch, Kolkata for encashment but the Cheques were returned with the remark „Fund Insufficient' as per Bank Memo dated February 15, 2014. The petitioner sent a demand notice dated February 25, 2014 and the said notice was served upon the respondent on February 26, 2014 but the respondent No. 2 failed and neglected to make the payment. Accordingly, the Respondent No. 2 committed an offence punishable under Section 138 of the Negotiable Instruments Act. 3. The petitioner submits that the Learned Magistrate passed an order of acquittal, on the ground that the debt is not legally enforceable against the accused person because the complainant did not produce any document to show that the said amount of loan was shown in the Income Tax file. 4. The petitioner submits that the Learned trial Court passed the order of acquittal on the ground that the complaint did not produce any document to show that he has money lending authority. 5. The petitioner submits that the respondent No. 2 issued the cheques in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued towards legally enforceable debt invoking presumption U/s 139 N.I. Act. [Section 139 N.I. Act goes to say :- 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]. Complainant failed to establish that the amount allegedly lent to the accused is not unaccounted money and that he possessed license to lent money. If alleged loan has not shown in Income Tax Return, an adverse inference even could be drawn against the complainant. For the aforesaid reason I find that the complainant has hopelessly failed to prove the case U/s 138 N.I. Act and the accused is liable to be acquitted................ Sd/- M.M. 5th Court, Calcutta. 16. The Appellant/Complainant has filed written notes of Argument where in the following Judgments have been relied upon:- i) The Hon'ble Supreme Court in Kumar -Versus-Sharma Carpets (2009) 2 SCC, on 20, December, 2022 hold:- [Page No. 14]. "This Court is of the considered opinion that mere non filing of Income Tax Return would not automatically dislodge the source of income of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e consideration and existence of debt, is not enough to rebut the presumption. To rebut the statutory presumptions an accused is not expected to prove his defence beyond reasonable doubt as is expected of the complaint in a criminal trial. Rather, something which is probable has to be brought on record for getting the burden of proof shifted to the complainant. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case , act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the consideration did not exist, or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. Accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Section 118 and 139 of the NI Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account is insufficient to honour the cheque or that it exceeds the amount arranged to be paid from that account by an agreement made with that bank, such person shall be deemed to have committed an offence and shall, without prejudice to any other provisions of this Act, be punished with imprisonment for 8 [a term which may be extended to two years'], or with fine which may extend to twice the amount of the cheque, or with both: Provided that nothing contained in this section shall apply unless - (a) the cheque has been presented to the bank within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier; (b) the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice; in writing, to the drawer of the cheque, [within thirty days] of the receipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 17. Likewise, under Section 139 of the Act, a presumption is raised that the holder of a cheque received the cheque for the discharge, in whole or in part, of any debt or other liability. To rebut this presumption, facts must be adduced by the accused which on a preponderance of probability (not beyond reasonable doubt as in the case of criminal offences), must then be proved. In Rohitbhai Jivanlal Patel vs. State of Gujarat and Another, this Court has examined the scope of Sections 138 and 139 of the Act, which reads as under:- "15. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 of the NI Act is concerned, apparent it is that the appellant-accused could not deny his signatures on the cheques in question that had been drawn in favour of the complainant on a bank account maintained by the accused for a sum of Rs 3 lakhs each. The said cheques were presented to the bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. To disprove the presumptions, the accused should bring on record such facts and circumstances, upon consideration of which, the court may either believe that the consideration and debt did not exist or their non-existence was so probable that a prudent man would under the circumstances of the case, act upon the plea that they did not exist. Apart from adducing direct evidence to prove that the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act. 21. The accused has also an option to prove the non-existence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould attract presumption under Section 139 of the Negotiable Instruments Act, in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. (emphasis supplied) The above view was recently reiterated by a three-Judge Bench of this Court in Kalamani Tex v. P. Balasubramanian, (2021) 5 SCC 283. 15. A drawer who signs a cheque and hands it over to the payee, is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability. The presumption arises under Section 139. 16. In Anss Rajashekar v. Augustus Jeba Ananth, (2020) 15 SCC 348, a two Judge Bench of this Court, of which one of us (D.Y. Chandrachud J.) was a part, reiterated the decision of the three Judge Bench of this Court in Rangappa v. Sri Mohan, (2010) 11 SCC 441, on the presumption under Section 139 of the NI Act. The court held: 12. Section 139 of the Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received it, in discharge, in whole or in part, of a debt, or liability. The expression "unless the contrary is proved" indica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any debt or other liability. 25.2. The presumption under Section 139 is a rebuttable presumption and the onus is on the accused to raise the probable defence. The standard of proof for rebutting the presumption is that of preponderance of probabilities. 25.3. To rebut the presumption, it is open for the accused to rely on evidence led by him or the accused can also rely on the materials submitted by the complainant in order to raise a probable defence. Inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by reference to the circumstances upon which they rely. 25.4. That it is not necessary for the accused to come in the witness box in support of his defence, Section 139 imposed an evidentiary burden and not a persuasive burden. 25.5. It is not necessary for the accused to come in the witness box to support his defence." 13. It can thus be seen that this Court has held that once the execution of cheque is admitted, Section 139 of the N.I. Act mandates a presumption that the cheque was for the discharge of any debt or other liability. It has however been held that the presumption under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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