Case Note & Summary
The complainant, Stanley Barros Pereira, filed a complaint under Section 138 of the Negotiable Instruments Act, 1881, against the accused, Julieta Cota e Clemente, alleging that she issued a cheque for Rs. 1.5 lakhs towards part payment of furniture supplied by the complainant. The cheque was presented but returned with the endorsement 'account closed'. A legal notice was sent, but the accused failed to pay. The trial court acquitted the accused, leading to this appeal. The accused's defence was that the cheque was issued in connection with some other transaction and that she had paid cash and asked for the return of the cheque, which the complainant refused. The High Court held that the presumption under Section 139 NI Act that the cheque was issued for discharge of a debt or liability was not rebutted by the accused. The accused did not examine any witness, and her defence was inconsistent and unsupported by evidence. The court noted that the accused admitted issuing the cheque but failed to prove her defence. The appeal was allowed, the acquittal was set aside, and the accused was convicted under Section 138 NI Act. The accused was sentenced to pay a fine of Rs. 2 lakhs, with Rs. 1.9 lakhs to be paid as compensation to the complainant, and in default, simple imprisonment for six months.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Rebuttal - The accused failed to rebut the presumption that the cheque was issued for discharge of a debt or liability, as she did not examine any witness and her defence was inconsistent and unsupported by evidence. Held that the presumption under Section 139 NI Act is rebuttable but the accused must lead evidence to rebut it, and the standard of proof is preponderance of probabilities. (Paras 4-6) B) Negotiable Instruments Act - Dishonour of Cheque - Account Closed - The cheque was dishonoured due to account being closed, which constitutes dishonour under Section 138 NI Act. The accused admitted issuing the cheque but claimed it was for a different transaction and that she had paid cash, but failed to prove the same. Held that the accused's defence was not credible and the presumption under Section 139 NI Act was not rebutted. (Paras 2-6)
Issue of Consideration
Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881, that the cheque was issued for discharge of a debt or liability, stands rebutted by the accused's defence.
Final Decision
Appeal allowed. Acquittal set aside. Accused convicted under Section 138 NI Act and sentenced to pay fine of Rs. 2 lakhs, out of which Rs. 1.9 lakhs to be paid as compensation to complainant, in default simple imprisonment for six months.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Burden of proof on accused
- Standard of proof for rebuttal
- Dishonour of cheque due to account closed
