{"id":259502,"date":"2022-01-04T16:00:07","date_gmt":"2022-01-04T10:30:07","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=259502"},"modified":"2022-01-04T15:56:27","modified_gmt":"2022-01-04T10:26:27","slug":"court-holds-accused-guilty-under-s-138-ni-act-where-he-failed-to-rebut-statutory-presumption","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2022\/01\/04\/court-holds-accused-guilty-under-s-138-ni-act-where-he-failed-to-rebut-statutory-presumption\/","title":{"rendered":"Court holds accused guilty under S. 138 NI Act where he failed to rebut statutory presumption even when complainant didn’t produce documentary evidence to prove debt"},"content":{"rendered":"

XVIII Addl. Chief Metropolitan Magistrate, Bengaluru City: <\/strong>Manjunatha, XVII Addl. C.M.M., found the accused guilty for the offence under Section 138 of the Negotiable Instruments Act, on his failure to rebut the statutory presumption in favour of the holder of cheque.<\/p>\n

Background<\/span><\/h4>\n

The complainant had filed the instant complaint under Section 200 of Code of Criminal Procedure read with Section 138 of the Negotiable Instruments Act against the accused alleging that, she had committed the offence punishable under Section 138 NI Act.<\/p>\n

Complainants and the accused were well known to each other as they were residing in the same locality and in 2018, the accused had approached the complainant for a loan of Rs 4,00,000 for the purpose of urgent legal and domestic necessities and promised to repay the same within 6 months.<\/p>\n

Considering her request the complainant had paid Rs 4,00,000 to the accused by way of cash.<\/p>\n

The accused and her husband had executed an undertaking by acknowledging the receipt of the amount, but she failed to keep up her promises. On repeated demand and request, the accused issued a cheque but the same was returned unpaid with an endorsement \u201cFunds Insufficient\u201d in the drawer\u2019s account.<\/p>\n

Further, despite the notice, the accused had not paid the cheque amount and thereby she had committed an offence punishable under Section 138 NI Act.<\/p>\n

Court had issued summons and later, the accused was enlarged on bail.<\/p>\n

As per the direction of the Supreme Court in Indian Bank Assn. v. Union of India, <\/em>(2014) 5 SCC 590<\/a>, this Court treated the sworn in statement of the complainant as complainant evidence.<\/p>\n

Analysis, Law and Decision<\/span><\/h4>\n

Court cited the decision of Sukur Ali v. State of Assam, <\/em>(2011) 4 SCC 729<\/a>, in which the Supreme Court opined that even assuming that the counsel for the accused does not appear because of the counsel\u2019s negligence or deliberately, even then the Court should not decide a criminal case against the accused in the absence of his counsel since an accused in a criminal case should not suffer for the fault of his counsel and in such a situation the Court should appoint another counsel and in such a situation the Court should appoint another counsel as amicus curiae to defend the accused.<\/p>\n

In the decision of K.S. Panduranga v. State of Karnataka<\/em>, (2013) 3 SCC 721<\/a>, Supreme Court held that, \u201cregard being had to the principles pertaining to binding precedent, there is no trace of doubt that the principle laid down in Mohd. Sukur Ali (supra) by the learned Judges that the court should not decide a criminal case in the absence of the counsel of the accused as an accused in a criminal case should not suffer for the fault of his counsel and the court should, in such a situation, must appoint another counsel as amicus curiae to defend the accused and further if the counsel does not appear deliberately, even then the court should not decide the appeal on merit is not in accord with the pronouncement by the larger Bench in Bani Singh\u201d .<\/em><\/p>\n

The Court further held that in view of the aforesaid annunciation of law, it can safely be concluded that the dictum in Mohd. Sukur Ali (supra) to the effect that the court cannot decide a criminal appeal in the absence of counsel for the accused and that too if the counsel does not appear deliberately or shows negligence in appearing, being contrary to the ratio laid down by the larger Bench in Bani Singh (supra), is per incuriam. Furthermore, the transaction alleged in the case is purely a commercial transaction enetered into between two private individuals and the accused is not in judicial custody and he is not fall under any of the parameter under legal services authorities Act to get free legal aid. Under such circumstance question of appointing advocate for accused at the state cost may not arise at all.\u201d<\/em><\/p>\n

\u00a0<\/em>Question for Consideration:<\/span><\/h4>\n

Whether the complainant proves that, accused issued cheque for Rs 4,00,000 towards discharge of her liability, which was returned unpaid on presentation for the reason \u201cFund Insufficient\u201d and despite of notice she had not paid the cheque amount and thereby committed an offence punishable under Section 138 of NI Act?<\/p>\n

Analysis, Law and Decision<\/span><\/h4>\n

Court stated that, Sections 118 and 139 of NI Act raises a presumption in favour of the holder of the cheque that he had received the same for discharge in whole or in part of any debt or other liability.<\/p>\n

Further, it was added that the accused can take probable defence on the scale of the preponderance of probability to rebut the presumption available to the complainant.<\/p>\n

Whether the accused had successfully rebutted the said presumptions of law?<\/span><\/em><\/p>\n

Court observed that the accused had not disputed the issuance of cheque and her signature in the cheque.<\/p>\n

\n

When the drawer has admitted the issuance of the cheque as well as the signature present therein, the presumptions envisaged under section 118 read with section 139 of NI Act, would operate in favour of the Complainant.<\/span><\/p>\n<\/blockquote>\n

\u00a0<\/em>The Bench added that the above-said provisions laid down a special rule of evidence applicable to negotiable instruments. The presumption is one of law and thereunder the court shall presume that the instrument was endorsed for consideration.<\/p>\n

\n

\u201c\u2026when the complainant has relied upon the statutory presumptions enshrined under section 118 read with section 139 of NI Act, it is for the accused to rebut the presumptions with cogent and convincing evidence.\u201d<\/span><\/p>\n<\/blockquote>\n

It is worth noting that, Section 106 of Indian Evidence Act postulates that, the burden is on the accused to establish the fact which was especially within his special knowledge.<\/p>\n

Hence, the burden is on the accused to prove that the cheque in question was not issued for discharge of any liability.<\/p>\n

With regard to proof of existence of legally enforceable debt was concerned, Court referred to the decision of Supreme Court in Rangappa v. Mohan,<\/em> (2010) 11 SCC 441<\/a>, wherein it was observed that,<\/p>\n

“In the light of these extracts, we are in agreement with the respondent-claimant that the presumption mandated by section 139 of the Act does indeed include the existence of the legally enforceable debt or liability”<\/em><\/p>\n

\u00a0<\/em>In another decision in, T. Vasanthakumar v. Vijayakumari<\/em>, (2015) 8 SCC 378<\/a>, it was held that once the accused has admitted the issuance of Cheque, as well as signature on it, the presumption under Section 139, would be attracted.<\/p>\n

In the present matter, despite giving sufficient time, the accused neither led defence evidence nor cross-examined PW1, therefore the evidence placed by the complainant remained unchallenged and there was no reason to disbelieve the version of the complainant.<\/p>\n

The complainant had not produced any document regarding the lending of the amount to the accused, but in the absence of any contrary evidence, the unchallenged testimony of the complainant had to be believed. As such there was no rebuttal evidence on behalf of the accused to rebut the presumption available under Sections 118 and 139 of the NI Act.<\/p>\n

Therefore, the complainant\u2019s case was acceptable.<\/p>\n

The complainant proved that, for discharge of liability accused had issued a cheque and she had intentionally not maintained a sufficient amount in her account to honour the said cheque.<\/p>\n

In view of the above discussion, the complainant had proved the guilt of the accused punishable under Section 138 NI Act.<\/p>\n

Supreme Court in a decision of H. Pukhraj v. D. Parasmal, <\/em>(2015) 17 SCC 368<\/a>, observed that having regard to the length of the trial and date of issuance of cheque, it was necessary to award reasonable interest on the cheque amount along with cost of litigation.<\/p>\n

The Bench held that rather than imposing punitive sentence if sentence of fine is imposed with a direction to compensate the complainant for its monetary loss, by awarding compensation under Section 357 CrPC, would meet the ends of justice.<\/p>\n

Lastly, Court opined that it was just and proper to impose fine of the amount of Rs 4,55,000 which included interest and cost of litigation. [N. Muniraju v. Manjula, Criminal Case No. 25494 of 2019, decided on 1-1-2022]<\/p>\n

\n

Advocates before the Court:<\/strong><\/p>\n

For the complainant: S.K<\/p>\n

For the accused: G.V.K<\/p>\n","protected":false},"excerpt":{"rendered":"

XVIII Addl. Chief Metropolitan Magistrate, Bengaluru City: Manjunatha, XVII Addl. 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CMM Court considers","author":"Bhumika Indulia","date":"December 6, 2021","format":false,"excerpt":"Court of XX Addl. Chief Metropolitan Magistrate, Bengaluru City: Bhola Pandit, XX Addl. CMM, convicted a person who presented a cheque to repay a loan but the same was dishonored due to insufficient funds. Instant complaint was filed under Section 200 of Code of Criminal procedure against the accused of\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":255458,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/11\/accused-has-to-rebut-presumption-under-ni-act-once-signature-on-cheque-is-admitted\/","url_meta":{"origin":259502,"position":1},"title":"Accused has to rebut presumption under NI Act, once signature on cheque is admitted? Delhi Saket Courts examines","author":"Bhumika Indulia","date":"October 11, 2021","format":false,"excerpt":"South-East District, Saket Courts, New Delhi: Bhanu Pratap Singh, MM (N.I. Act) found the accused guilty of an offence under Section 138 of the Negotiable Instruments Act, where the accused had admitted signatures on the cheque and also failed to make the payment within 15 days of receipt of summons.\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Saket Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":255796,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/10\/18\/dishonour-of-cheque-3\/","url_meta":{"origin":259502,"position":2},"title":"Mere denial is useless, Presumption under S. 138 NI Act can be rebutted only by leading cogent evidence: Court holds accused guilty where “payment stopped by drawer”","author":"Bhumika Indulia","date":"October 18, 2021","format":false,"excerpt":"Saket Courts, New Delhi: Swati Gupta, Metropolitan Magistrate reiterated what is expected of an accused to rebut the statutory presumption against him in cases of cheque dishonour under Section 138 of the Negotiable Instruments Act, 1881. Brief facts Complainant and accused had entered into an agreement to sell the property\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"Saket Court","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2020\/08\/District-Court-Saket.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]},{"id":208618,"url":"https:\/\/www.scconline.com\/blog\/post\/2019\/01\/23\/mad-hc-presumption-under-s-139-ni-act-in-favour-of-holder-cheque-arises-once-its-execution-is-admitted-by-accused\/","url_meta":{"origin":259502,"position":3},"title":"Madras HC | Presumption under S. 139 NI Act in favour of holder of cheque arises once its execution is admitted by accused","author":"Bhumika Indulia","date":"January 23, 2019","format":false,"excerpt":"Madras High Court:\u00a0The Bench of P. Velmurugan J. convicted the accused under Section 138 of the Negotiable Instruments Act, 1881 (for dishonour of cheque) and sentenced him to undergo 6 months simple imprisonment and imposed a fine of Rs 1,50,000 to be paid to the complainant. The complainant and the\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":250568,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/07\/01\/drawers-signature-differs\/","url_meta":{"origin":259502,"position":4},"title":"Madras HC | Cheque returned with endorsement “drawers signature differs”. If complainant fails to prove accused was not stranger, can he still be prosecuted under S. 138 NI Act? Court answers","author":"Bhumika Indulia","date":"July 1, 2021","format":false,"excerpt":"Madras High Court: P. Velmurugan, J., addressed a matter revolving around the offence under Section 138 of the Negotiable Instruments Act. A complaint was filed for an alleged offence under Section 138 of the Negotiable Instruments Act, 1881. Judicial Magistrate found the respondent guilty of offence under Section 138 NI\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":258119,"url":"https:\/\/www.scconline.com\/blog\/post\/2021\/12\/04\/account-closed-and-cheque-returned\/","url_meta":{"origin":259502,"position":5},"title":"“Account closed” and Cheque returned: Is it a reason sufficient for convicting a person under S. 138 NI Act? Read detailed decision of CMM Court, Bangalore","author":"Bhumika Indulia","date":"December 4, 2021","format":false,"excerpt":"Court of XX Addl. Chief Metropolitan Magistrate, Bengaluru City: In light of cheque being returned by the bank due to \u201cAccount Closed\u201d Bhola Pandit, XX Addl. C.M.M, convicted an accused under Section 138 of the Negotiable Instruments Act, 1881 The present complaint was filed under Section 200 of the Code\u2026","rel":"","context":"In "Case Briefs"","block_context":{"text":"Case Briefs","link":"https:\/\/www.scconline.com\/blog\/post\/category\/casebriefs\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/www.scconline.com\/blog\/wp-content\/uploads\/2021\/05\/City-Civil-Court-Bengaluru.jpg?resize=1050%2C600&ssl=1 3x"},"classes":[]}],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/259502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/users\/8808"}],"replies":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/comments?post=259502"}],"version-history":[{"count":0,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/posts\/259502\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media\/248968"}],"wp:attachment":[{"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/media?parent=259502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/categories?post=259502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.scconline.com\/blog\/wp-json\/wp\/v2\/tags?post=259502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}