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2021 (1) TMI 1214 - HC - Indian LawsDishonor of Cheque - insufficiency of funds - whether the Judgments of courts below suffer from any incorrectness, illegality and impropriety in convicting and sentencing the petitioner for the offence under section 138 of Negotiable Instruments Act? - HELD THAT:- The petitioner admitted the cheque as his cheque and the signature in the cheque as his signature. Admittedly, the cheque had been returned, since there was no funds in the account of the petitioner when the cheque was presented for collection. The learned counsel for the respondent submitted that nowhere in the reply, the petitioner has stated with regard to the alleged chit transaction and depositing the cheque as a security for chit transaction. Ex.P.7 Account statement shows that the respondent had sufficient means to lend the amount of ₹ 5,00,000/- to the petitioner. Moreover, there is presumption under 139 of the Negotiable Instruments Act that a cheque had been issued towards discharging the legally enforceable debt or liability, unless the contrary is proved. The petitioner did not prove the contrary fact against the fact of issuance of cheque for discharging the debt and return of the cheque for the reason that there was no funds in the account of the petitioner. With regard to burden of proof, it is said that whereas the prosecution must prove the guilt of an accused beyond all reasonable doubt, the standard of proof to prove a defence on the part of an accused is preponderance of probability. Inference of preponderance of probability can be drawn not only from the materials brought on record by the parties but also by reference to circumstances upon which he relies. When there is no material to show that the respondent is a regular income tax assessee and he has been regularly filing income tax returns, this Court is of the considered view that on the basis of Ex.P.7 one cannot come to the conclusion that the respondent has sufficient means to lend a sum of ₹ 5,00,000/- to the petitioner, especially when the petitioner said that he had no prior acquaintance with the respondent - It is seen from the evidence of PW-1 that he did not know the petitioner prior to lending a huge sum of ₹ 5,00,000/-. He came to know about the petitioner through one Rajendran. He did not even know the address of the said Rajendran. He did not get any supporting document like a promissory note to evidence the loan transaction. These aspects strengthens the case of the petitioner that the cheque he gave to Sathyan as a security for chit transaction is misused through the respondent. It is true that the petitioner has not happily worded in the reply that the cheque in question was given as security to Sathyan in chit transaction - There is no denial of the fact that Satyan is the close relative of the respondent. The fact that the respondent had not produced any acceptable evidence to show that he has means to lend a sum of ₹ 5,00,000/- to the petitioner, when seen in the backdrop of the case projected by the petitioner that the cheque was given as security in the chit rune by Satyan, probalised the case of the petitioner that the cheque which was given as security in the chit transaction is misused by the respondent. Both the Trial court and the Appellate court have not considered these vital aspects while proceeding to dispose the case and heavily placed reliance on the presumption under section 139 of the Negotiable Instruments Act, without minding that this provision merely raises a presumption in favour of a holder of the cheque that the same has been issued for discharge of any debt or other liability. However, this presumption does not extend to the existence of a debt also. Existence of a legally enforceable debt is not a matter of presumption under section 139 of Negotiable Instruments Act - this court concludes that the judgments of the court below in convicting and sentencing the petitioner under Section 138 of Negotiable Instruments Act is not in consonance with established fats and position of law and has to be necessarily set aside. Petition allowed.
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