Case Note & Summary
The appellant, Sheshrao Krishnarao Umredkar, proprietor of M/s Rakesh Enterprises, filed a criminal appeal challenging the judgment and order dated 29th June 2006 passed by the Judicial Magistrate, First Class, Special Court under Section 138 of the Negotiable Instruments Act, Nagpur, in Summary Criminal Case No. 2560/2006, whereby the respondent/accused, H K Pande, was acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that the accused had purchased goods such as silk yarn, raw material, and Beranas silk during 1999 and issued two cheques: one for Rs. 73,810/- dated 17.8.1999 and another for Rs. 40,000/- dated 5.9.1999, drawn on State Bank of India, Nagpur. The cheques were presented on 16.10.1999 but returned on 18.10.1999 with the remark 'insufficient funds'. A demand notice dated 29.10.1999 was sent, received by the accused on 2.11.1999, to which the accused replied on 10.11.1999 disputing liability on the ground that cash payment had already been made but the complainant did not return the cheques. The accused further claimed that the complainant had accepted cash for supplying China and Korea thread but neither supplied the goods nor returned the money. The trial court acquitted the accused, leading to this appeal. The High Court, after considering the submissions, held that the accused had rebutted the presumption under Section 139 of the N.I. Act by raising a probable defence, and the complainant failed to prove the existence of a legally enforceable debt. Consequently, the appeal was dismissed and the acquittal was upheld.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Rebuttal - The accused can rebut the presumption of legally enforceable debt by raising a probable defence; once rebutted, the burden shifts back to the complainant to prove the debt. In this case, the accused disputed liability and claimed cash payment for goods not supplied, which was sufficient to rebut the presumption. (Paras 1-3) B) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Legally Enforceable Debt - Failure to Prove - The complainant failed to prove the existence of a legally enforceable debt as the accused's defence of cash payment for goods not supplied was plausible and not disproved by the complainant. The acquittal was upheld. (Paras 2-3)
Issue of Consideration
Whether the acquittal of the accused for offence under Section 138 of the Negotiable Instruments Act, 1881 was proper when the complainant alleged dishonour of cheques due to insufficient funds and the accused disputed the liability.
Final Decision
The appeal is dismissed. The judgment and order of acquittal passed by the Judicial Magistrate, First Class, Special Court under Section 138 of N.I. Act, Nagpur, dated 29th June 2006 in Summary Criminal Case No. 2560/2006 is confirmed.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act is rebuttable
- Accused can rebut presumption by raising probable defence
- Burden of proof shifts back to complainant after rebuttal
- Dishonour of cheque does not automatically prove debt
