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TMI Blog2021 (6) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... narration of one would suffice to addressing the issues raised in the instant appeals. Two separate complaint cases were filed by the appellant alleging dishonour of cheque issued by the respondent for the debt duly acknowledged upon execution of a promissory note. The complainant is engaged in a business of pharmaceutical goods and carrying on such business in the name and style "M/s. Shri Krishna Pharmacy". The accused is running a retail pharmaceutical shop in the name and style of "M/s. Priya Medical Store" and the transaction between the parties ensued as far back as in the year 2005. Because of the long business association, the closeness was developed and the friendship grew which led the complainant/appellant to supply goods on credit. Because of such closeness sometimes the complainant also accommodated the accused/respondent with the loan which were repaid on some of the occasions. However, it was subsequently detected that there is a due, to the tune of Rs. 18,00,000/-, both on account of supply of pharmaceutical goods and the accumulated loan and the demand was raised by the complainant/appellant for repayment thereof. Subsequently, the accused/respondent executed a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplainant did not pay heed to it and to his utter surprise, a notice was received under Section 138 of the Negotiable Instruments Act. 5. On the conspectus of the aforesaid stand taken before the learned Judicial Magistrate both the complainant and the accused deposed in support thereof. Apart from the accused having deposed, two witnesses were also called for to corroborate the fact that the complainant took the accused from his shop and thereafter on return the accused divulged that he was forced to sign on a paper before the Notary Public without knowing the contents thereof. 6. When the complaint ripe for a final decision, the Learned Judicial Magistrate not only dismissed the same disbelieving the case of the complainant, but also granted liberty to the accused/respondent to set in motion a criminal case against him for abduction and user of force in obtaining the signature on the false pro-note. The learned Judicial Magistrate held that the presumption under Section 139 of Act is restricted to a presumption of a debt or other liabilities but it does not raises any presumption of legally enforceable debt on liability by relying upon a judgment of Supreme Court in case of Kr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y kind. It is further held that it occurs as soon as the Magistrate applies his mind to a suspected commission of an offence. It would be relevant to quote the observations made in paragraph 12 of the said judgment which runs thus:- "12. Chapter XV (Sections 200-203) relates to "Complaints to Magistrates" and covers cases before actual commencement of proceedings in a court or before a Magistrate. Section 200 of the Code requires a Magistrate taking cognizance of an offence to examine the complainant and his witnesses on oath. Section 202, however, enacts that a Magistrate is not bound to issue process against the accused as a matter of course. It enables him before the issue of process either to inquire into the case himself or direct an investigation to be made by a police officer or by such other person as he thinks fit for the purpose of deciding whether there is sufficient ground for proceeding further. The underlying object of the inquiry under Section 202 is to ascertain whether there is prima facie case against the accused. It thus allows a Magistrate to form an opinion whether the process should or should not be issued. The scope of inquiry under Section 202 is, no doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 139 of the Act is mandatory and the moment the holder of the cheque have complained of a breach of the conditions enshrined under section 138 of the Act, the initial onus is discharged. It, thus, shifts on the accused to rebut the presumption. It is further held that the legislative intent underlying the incorporation of section 139 of the Act is based upon a reverse onus and it would be preposterous to suggest that such statutory presumption is static. Even if the statutes makes a thing of state of thing or facts to be presumed in a mandatory form, yet, it is rebuttable and, such presumption shall get obliterated on the degree of the evidence adduced in support of such rebuttal. The Three Judge Bench further propounded that the offence under section 138 of the Act is largely in the nature of the a civil disputes having a drastic effect on the commercial transactions and, therefore, the basic purpose behind the incorporation of sections 138 to 142 of the Act would get frustrated. While agreeing with the proposition that section 139 of the Act is restricted to a statutory presumption on debt or other liabilities and not on legally enforceable debt or liability, yet, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prosecution can fail. As clarified in the citations, the accused can rely on the materials submitted by the complainant in order to raise such a defence and it is conceivable that in some cases the accused may not need to adduce evidence of his/her own." 13. However, in a recent decision delivered in a case of T.P. Murugan vs. Bojan reported in (2018) 8 SCC 469, the Apex Court succinctly held that the moment the cheque is signed and issued in favour of a holder, under Section 139 of the Act raises a statutory presumption on the discharge of a legally enforceable debt in the following: "21. We have heard the Senior Counsel for both parties, and perused the record. Under Section 139 of the NI Act, once a cheque has been signed and issued in favour of the holder, there is statutory presumption that it is issued in discharge of a legally enforceable debt or liability. This presumption is a rebuttable one, if the issuer of the cheque is able to discharge the burden that it was issued for some other purpose like security for a loan. 22 In the present case, the respondent has failed to produce any credible evidence to rebut the statutory presumption. This would be evident from the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the aforesaid decision is that Section 139 of the Act raises a statutory presumption in favour of the holder of the negotiable instrument in discharge of the debt or other liability though it may not in all conceivable circumstances be in discharge of the legally enforceable debt or other liability and, therefore, depends upon the special facts involved in the given case. Even if the statutory presumption is raised by use of the word "shall presume", it does not take away the right of a person against whom the same is presumed to rebut the same. It is, thus, a rebuttable presumption as in a case of an ordinary presumption. 16. However, the degree of evidence in rebuttal varies as in case of a statutory presumption, the accused has to lead the case which appears to be probable, plausible and reasonable from a prudent man which may not be so strict in case of a rebuttal of an ordinary presumption. 17. Furthermore, Section 114(1)(a) of the Evidence Act also raises the presumption on the negotiable instrument including the promissory note on consideration and it is, thus, a foremost duty of the person against whom such presumption is raised to lead an evidence in rebuttal. 18. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the cheques have not been denied. If the story of undated cheque in a commercial transaction is disbelieved, it will not bring a confidence in the traders nor shall be conducive for a healthy business in commercial trades. 21. Admittedly, the cheques, on being presented, were dishonoured with the remark "exceeds arrangement" meaning thereby there were no sufficient balance therein to cover the said amount and, therefore, it satisfies the ingredients of Section 138 of the Act. 22. The evidence of rebuttal is neither probable nor plausible in the perspective of a prudent man and I am, therefore, amazed how the learned Magistrate have found fault into such transactions. 23. The order impugned, therefore, suffers from infirmity and/or illegality and the same is hereby set aside. 24. The accused is found guilty of commission of offence punishable under Section 138 of the Negotiable Instruments Act. The accused is directed to pay a sum of Rs. 25,00,000.00 (Rupees Twenty five lakhs only) to the complainant/appellant as fine/compensation within two months from date. In default, he will undergo simple imprisonment for a term of one and half years. 25. The accused shall surrender b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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