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2020 (2) TMI 629

..... his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the N.I. Act. However, such a presumption is rebuttable in nature and the accused is required to lead the evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant was paid. The accused has admitted the issuance of the cheques and his signature on the cheque and that the cheque in question was issued for the second time, after the earlier cheques were dishonoured and that even according to the accused some amount was due and payable, there is a presumption under Section 139 of the N.I. Act that there exists a legally enforceable debt or liability. Of course such presumption is rebuttable in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid - In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the ch .....

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..... total sum of ₹ 19,01,320/was paid to the accused through VTM (Visa Travel Money Card) which came to be withdrawn by the accused on different days on 10.01.2014, 20.02.2014 and 22.02.2014. According to the complainant, the original accused respondents herein paid ₹ 6,45,807/only leaving a balance of ₹ 12,55,513/. According to the complainant, the respondents accused issued four cheques total amounting ₹ 9,55,574/, which were issued in favour of the complainant. However, all the aforesaid cheques when presented, came to be dishonoured. According to the complainant thereafter the respondents issued one another cheque bearing No.374941 of ₹ 9,55,574/of the partnership firm namely Shakti International in discharge of the legal liability. According to the complainant when the same cheque was presented the same came to be dishonoured due to STOP PAYMENT vide bank memo dated 02.06.2014. Thereafter, the complainant sent a legal notice upon the original accused under Section 138 of the N.I. Act vide notice dated 07.06.2014. Despite the service of the notice, the accused did not make the payment of the cheque amount. Therefore, the original complainant appellant .....

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..... rebut the presumption and for that, the accused has to lead the evidence. It is submitted that in the present case no evidence has been led on behalf of the accused to rebut the presumption. It is submitted that the presumption mandatory by Section 139 of the N.I. Act includes the presumption that there exists a legally enforceable debt or liability and therefore both the Courts below have materially erred in acquitting the accused. In support of the above, reliance is placed on the decisions of this Court in the case of Rangappa vs. Sri Mohan, (2010) 11 SCC 441 and Kisan Rao vs. Shankargouda, (2018) 8 SCC 165. 3.2 It is further submitted by Learned Counsel appearing on behalf of the complainant that even at the time of framing of the charge against the accused and when his statement was recorded, the accused had admitted that he had taken services of the Foreign Exchange and Travel Card. It is submitted that he had also admitted that he had made part payment in discharge of the said liability and some amount was remaining. It is submitted that therefore the accused was required to lead the evidence and prove that the entire amount due and payable has been paid. It is submitted tha .....

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..... at the time of the framing of the charge, he has admitted that some amount was due and payable. However, it was the case on behalf of the accused that the cheque was given by way of security and the same has been misused by the complainant. However, nothing is on record that in the reply to the statutory notice it was the case on behalf of the accused that the cheque was given by way of security. Be that as it may, however, it is required to be noted that earlier the accused issued cheques which came to be dishonoured on the ground of insufficient funds and thereafter a fresh consolidated cheque of Rs. ₹ 9,55,574/was given which has been returned unpaid on the ground of STOP PAYMENT . Therefore, the cheque in question was issued for the second time. Therefore, once the accused has admitted the issuance of cheque which bears his signature, there is presumption that there exists a legally enforceable debt or liability under Section 139 of the N.I. Act. However, such a presumption is rebuttable in nature and the accused is required to lead the evidence to rebut such presumption. The accused was required to lead evidence that the entire amount due and payable to the complainant .....

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..... guide the construction and interpretation of reverse onus clauses and the defendant accused cannot be expected to discharge an unduly high standard or proof. 6.3 In the case of Kishan Rao (Supra) after considering the decision of this Court in the case of Kumar Exports vs. Sharma Carpets, (2009) 2 SCC 513, it is observed and held that the accused may adduce evidence to rebut the presumption, but mere denial regarding existence of debt shall not serve any purpose. This Court in paragraph 19 of that judgment considered paragraph 14, 15, 18 & 19 of the decision in the case of Kumar Exports (Supra) as under: 19. This Court in Kumar Exports v. Sharma Carpets (Supra), had considered the provisions of the Negotiable Instruments Act as well the Evidence Act. Referring to Section 139, this Court laid down the following in paras 14, 15, 18 and 19: 14. Section 139 of the Act provides that 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. 15. Presumptions are devices by use of which the courts are enabled and entitled to pronou .....

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..... so far as the reliance is placed by Learned Counsel appearing on behalf of the accused on the decision of this Court in the case of Basalingappa (supra), on going through the said decision, we are of the opinion that the said decision shall not be applicable to the facts of the case on hand and/or the same shall not be of any assistance to the accused. In that case before this Court, the defence by the accused was that the cheque amount was given by the complainant to the accused by way of loan. When the proceedings were initiated under Section 138 of the N.I. Act the accused denied the debt liability and the accused raised the defence and questioned the financial capacity of the complainant. To that, the complainant failed to prove and establish his financial capacity. Therefore, this Court was satisfied that the accused had a probable defence and consequently in absence of complainant having failed to prove his financial capacity, this Court acquitted the accused. In the present case, the accused never questioned the financial capacity of the complainant. We are of the view that whenever the accused has questioned the financial capacity of the complainant in support of his probab .....

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..... nd order passed by the High Court and that of the Metropolitan Magistrate acquitting the original accused respondents herein for the offence under Section 138 of the N.I. Act cannot be sustained and the same deserves to be quashed and set aside and are accordingly quashed and set aside. The original accused respondents herein are held guilty for the offence under Section 138 of the N.I. Act. All the original accused respondents herein are therefore, convicted under Section 138 of the N.I. Act. Original Accused No.2 to 4 Respondent No.2 to Respondent No.4 herein are sentenced to undergo three months simple imprisonment with a fine of ₹ 10,000/each and in default thereof to undergo further one month simple imprisonment. The original accused respondents herein are also directed to pay a sum of ₹ 19,11,148/to the original complainant by way of compensation to be paid within a period of eight weeks from today. 9. Present appeal is accordingly allowed. CRIMINAL APPEAL NO. 272 OF 2020 10. Now so far as this appeal arising out of the impugned judgment and order passed by the High Court in Crl. L.P. No. 259/2018 arising out of the judgment and order passed by the learned trial C .....

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