Case Note & Summary
The appellant, Lyndon Rodrigues, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against respondent Anil Thakur for dishonour of a cheque for ₹12,00,000. The learned Magistrate dismissed the complaint, accepting the accused's defence that the cheque was issued as security and that part payment had been made. The appellant appealed to the High Court. The High Court examined the presumption under Section 139 of the NI Act, which presumes that the cheque was issued for a legally enforceable debt. The court noted that the accused did not reply to the legal notice and raised a defence for the first time during trial, claiming that three cheques were issued, one of which was for ₹10,00,000 and was realised, another for ₹5,00,000, and the third for ₹12,00,000. The accused alleged that the ₹12,00,000 cheque was given as security. The court found this defence improbable because the accused did not demand return of the security cheque after the alleged payment. The court held that the accused failed to rebut the presumption under Section 139, as the defence was not probable or consistent. The High Court allowed the appeal, set aside the Magistrate's order, and convicted the accused under Section 138 NI Act, sentencing him to pay the cheque amount as compensation.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Rebuttal - The court considered whether the accused had raised a probable defence to rebut the presumption that the cheque was issued for a legally enforceable debt. The accused's defence that the cheque was issued as security and that part payment was made was found to be inconsistent and not probable. Held that the accused must lead evidence or raise a plausible defence to rebut the presumption; mere denial is insufficient (Paras 4-5).
Issue of Consideration
Whether the learned Magistrate erred in dismissing the complaint under Section 138 of the Negotiable Instruments Act, 1881, by accepting an improbable defence raised by the accused, thereby failing to properly apply the presumption under Section 139 of the Act.
Final Decision
Appeal allowed. The order of the learned Magistrate dismissing the complaint is set aside. The accused is convicted under Section 138 of the Negotiable Instruments Act, 1881, and sentenced to pay the cheque amount of ₹12,00,000 as compensation.
Law Points
- Presumption under Section 139 NI Act
- Rebuttal of presumption
- Probable defence
- Standard of proof in NI Act cases
- Section 138 NI Act
