TMI Blog2021 (1) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... ons assigned by the trial Court that complainant failed to prove the particulars of seizure of vehicle of accused, its sale to third party, the amount received from such sale coupled with the contention that cheque issued was a post dated cheque given for security purpose only cast a serious doubt about the complainant's case, would be contrary to the law under Negotiable Instruments Act regarding presumptions available to the complainant. The trial Court taking judicial notice of the fact that farmers borrowing loan from financials would put their signatures wherever indicated by the financiers is also perverse and not based on any evidence - liability of accused continues even after repossession and sale of vehicle to third parties, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; for short) stating that it is a transporting finance company and accused had borrowed a loan for purchase of Tata Tipper 2006 model bearing registration No.KA-35/8287 by taking loan of ₹ 14,79,100/- from appellant under loan-cum- hypothecation agreement No.STFC/HPT/76257. As accused was in arrears, complainant made a demand for repayment. In response to demand, accused issued it cheque for ₹ 6,87,000/- bearing No.523522 drawn on Pragati Gramina Bank, Ballari Road, Hosapete Branch dated 05.05.2009. When the cheque was presented for collection through Axis Bank, College Road, Hosapete on 14.10.2009, it returned with endorsement dated 15.10.2009 as 'funds insufficient'. The intimation was received by complainant on 26.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount. On a demand made by company, cheque was issued by accused for balance amount. The said cheque having been presented for payment, it returned unpaid with endorsement 'insufficient funds'. Despite receiving statutory notice, within time accused failed to make payment. Thus, the complainant established all the ingredients of the offence under Section 138 of N.I. Act. 8. It was further submitted that though accused set up a defence that cheque in question was a post dated cheque, given for security purposes only and not towards discharge of any debt, accused did not lead any evidence or substantiate said contention. It was submitted that in view of admission of signature on cheque by accused, presumption under Section 118 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mption under Section 118 and 139 of the N.I. Act would be available. Unless accused rebuts such presumption, complainant is not required to establish every fact of transaction as if it were a civil suit. Learned counsel relied upon the Apex Court decision in the case of D.K.Chandel V/s M/s Wockhardt Ltd. and others reported in 2020(1) CIVIL COURT CASES 582 (SC) which reads as under: 8. As held by the Trial Court as well as by the High Court that the cheque was issued towards the amount due and payable by the appellant for purchase of pesticides. As rightly observed by the High Court production of the account books/cash book may be relevant in the civil court; but may not be so in the criminal case filed under Section 138 of the N.I. Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rove the non-existence 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. 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 ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e containing a specific clause regarding continuing guarantee, would also be unsustainable. The trial Court has not taken note of Clause-11 of agreement, which reads as follows: 11. THESE PRESENTS TO BE CONTINUING SECURITY: The Borrower agrees that this agreement and the security hereby created shall operate as a continuing security for all the obligations / facilities of the Borrower in respect of the said credit facilities, not withstanding existence of a credit balance in the said account or any partial payments or fluctuation of accounts. 17. In view of above terms, liability of accused continues even after repossession and sale of vehicle to third parties, for any balance due after adjusting amount recovered from sale. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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