Case Note & Summary
The appellant, Nitin Bapurao Mankar, was the original complainant in a complaint under Section 138 of the Negotiable Instruments Act, 1881, against respondent no.1, Mangesh Govindrao Supare, proprietor of Shri Vyankatesh Housing Agency. The complaint alleged that the accused issued a cheque for Rs.1,55,000 dated 29.02.2008 drawn on District Central Cooperative Bank Limited, Hudkeshwar Branch, Nagpur, towards repayment of amounts due under an agreement to sell a plot. The cheque was dishonoured for insufficient funds. Despite a legal notice, the accused did not pay. The trial court acquitted the accused on the ground that the complainant failed to prove that the cheque was issued for a legally enforceable debt or liability. The High Court held that the trial court erred in placing the burden on the complainant. Once the cheque and signature were admitted, the presumption under Section 139 of the Act arose that the cheque was issued for a debt or liability. The accused's defence that the cheque was given as security did not rebut the presumption. The court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the Act, sentencing him to pay a fine of Rs.1,55,000 with default simple imprisonment.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Burden of Proof - The trial court acquitted the accused on the ground that the complainant failed to prove that the cheque was issued for discharge of a legally enforceable debt or liability. However, once the cheque and signature are admitted, the presumption under Section 139 of the Negotiable Instruments Act, 1881 arises that the cheque was issued for a debt or liability. The burden shifts to the accused to rebut this presumption. The trial court erred in placing the burden on the complainant. (Paras 5-6) B) Negotiable Instruments Act - Dishonour of Cheque - Legally Enforceable Debt - The accused admitted the cheque and signature but claimed the cheque was given as security for a loan. The court held that even if the cheque was given as security, it can still be for a legally enforceable debt. The accused failed to rebut the presumption. (Para 6)
Issue of Consideration
Whether the trial court erred in acquitting the accused under Section 138 of the Negotiable Instruments Act, 1881, by failing to apply the presumption under Section 139 of the Act that the cheque was issued for discharge of a legally enforceable debt or liability.
Final Decision
The appeal is allowed. The judgment and order of acquittal dated 06.04.2009 passed by the 23rd Judicial Magistrate, First Class, Court No.23, Nagpur in Summary Criminal Case No. 6892/2008 is set aside. The accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs.1,55,000/-, in default to suffer simple imprisonment for three months.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Burden of proof on accused to rebut presumption
- Dishonour of cheque for insufficient funds
- Legally enforceable debt or liability
