TMI Blog2020 (3) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... sed, presumption shall be drawn that cheque was issued for the discharge of any debt or other liability. The presumption under Section 139 is a rebuttable presumption. It is relevant to notice the general principles pertaining to burden of proof on an accused especially in a case where some statutory presumption regarding guilt of the accused has to be drawn. When the cheque is returned by a bank with an endorsement account closed, it would amount to returning the cheque unpaid because the amount of money standing to the credit of that account is insufficient to honour the cheque as envisaged in Section 138 of the Act. In the present case, when the complainant presented the cheque for encashment, it was returned unpaid with an endorsemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offence under Section 138 of the Negotiable Instrument Act on the ground that he had given a loan of ₹ 50,000/- and in lieu of the aforesaid loan the applicant had handed over the cheque of ₹ 50,000/- dated 11.10.06 to the complainant (respondent No.1). It is alleged that when the complainant presented the cheque for encashment on 12.10.06, it was returned with an endorsement that account of the applicant has been closed. The complainant issued notice to the applicant which was refused by the applicant and ultimately within a statutory period the complainant (respondent No.1) filed a complaint case against the applicant before the trial court. 3. So as to prove the guilt of the accused, prosecution has examined as many as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... courts below is based on misreading of evidence and non consideration of important and vital issues. The complainant has utterly failed to prove the ofence against the applicant. 6. Learned counsel for the respondent No.1 and State supported the impugned order and submits that the same is in accordance with law and there is no infirmity in the same. 7. Heard counsel for the parties and perused the material available on record. 8. Before the trial court complainant examined himself as witness No.1, Subash Ekka (PW-2) and Anand Manthri as (PW-3). In his statement, applicant has denied the question No.1 that he gave the cheque (Ex.P-1) to the complainant but he admitted in question No.14 that the said cheque was of their bank and iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing existence of debt shall not serve any purpose. 10. With reference to the facts of the present case, the Court noted that the trial court as well as the Appellate Court having found that cheque contained the signature of the applicant and it was given to the complainant (respondent No.1) to present in the Bank of the presumption under Section 139 was rightly raised which was not rebutted by the accused. The accused had not led any evidence to rebut the aforesaid presumption. After issuing the cheque drawn on an account maintained, a person, if he closes that account apart from the fact that it may amount to another offence, it would certainly be an offence under Section 138 as there was insufficient or no fund to honour the cheque in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held that 14. So far the question of existence of basic ingredients for drawing of presumption under Sections 118 and 139 the NI Act is concerned, the accused-appellant could not deny his signature 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 ₹ 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 face of the record. The Trial Court had also consciously taken note of these facts and had dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 revers ..... X X X X Extracts X X X X X X X X Extracts X X X X
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