Case Note & Summary
The appeal arises from the judgment and order of acquittal passed by the J.M.F.C., Mapusa, Goa, in OA case No.625/2007/F, acquitting the respondent/accused of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The appellant/complainant, M/s Matoshri Cashew Nuts, represented by its proprietor Shri Dilip U. Gawde, had filed a complaint alleging that the respondent/accused, Shri Mohammad Abdul Kadar, proprietor of Fatima Tours and Travels, issued a cheque bearing No.648356 dated 10.10.2007 drawn on South Indian Bank Ltd., Margao Branch, for Rs.41,000/- towards part payment of the price of cashew nuts worth Rs.93,640/- purchased by the respondent from the appellant. The cheque was dishonoured due to insufficiency of funds. A demand notice dated 22.10.2007 was sent, but the respondent failed to make payment within the stipulated time, leading to the complaint. The Trial Court acquitted the respondent on the ground that the appellant failed to prove that the cheque was issued towards a legally enforceable debt. The High Court examined the validity of this finding. The appellant argued that the Trial Court erred in ignoring the presumption under Section 139 of the NI Act, which operates in favour of the complainant once the cheque and its dishonour are proved. The respondent contended that the appellant failed to prove the underlying debt. The High Court held that the Trial Court's approach was erroneous; the presumption under Section 139 shifts the burden to the accused to rebut it with probable evidence. Since the respondent did not lead any evidence to rebut the presumption, the acquittal was unsustainable. The High Court allowed the appeal, set aside the acquittal, and convicted the respondent under Section 138 NI Act, sentencing him to pay a fine of Rs.50,000/- with default imprisonment.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Rebuttal - The issue was whether the Trial Court correctly acquitted the accused on the ground that the complainant failed to prove the existence of a legally enforceable debt. The High Court held that the presumption under Section 139 of the NI Act, 1881 operates in favour of the complainant, and the accused must rebut it with probable evidence. The Trial Court's finding that the complainant failed to prove the debt was erroneous as the presumption was not rebutted. (Paras 1-4) B) Negotiable Instruments Act - Dishonour of Cheque - Legally Enforceable Debt - Burden of Proof - The court considered the validity of the Trial Court's finding that the cheque was not issued towards a legally enforceable debt. The High Court held that once the cheque and its dishonour are proved, the presumption under Section 139 arises, and the burden shifts to the accused to show that the cheque was not for a debt or liability. The Trial Court's approach was contrary to law. (Paras 3-4)
Issue of Consideration
Whether the Trial Court erred in acquitting the accused on the ground that the complainant failed to prove that the cheque was issued towards a legally enforceable debt, despite the presumption under Section 139 of the NI Act, 1881.
Final Decision
The appeal is allowed. The judgment and order of acquittal dated 29.01.2009 passed by the J.M.F.C., Mapusa, in OA case No.625/2007/F is set aside. The respondent/accused is convicted for the offence under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs.50,000/-, in default to undergo simple imprisonment for a period of one month.
Law Points
- Presumption of legally enforceable debt under Section 139 NI Act
- 1881
- Rebuttal of presumption
- Standard of proof in cheque dishonour cases
