Case Note & Summary
The appellant, Smt. Prabha Gandhi, filed a criminal appeal against the acquittal of the respondent, Manohar Deshmukh, by the Judicial Magistrate First Class, Nagpur in complaint case No. 82/1997 for an offence under Section 138 of the Negotiable Instruments Act, 1881. The complainant alleged that she had deposited her savings with the accused on three occasions in 1990 and 1991: Rs.15,000/- on 19.11.1990, Rs.20,000/- on 19.2.1991, and Rs.23,000/- on 11.3.1991. When she demanded the money back in March 1996, the accused represented that he would be able to repay only in December 1996 and issued a cheque for Rs.1,19,000/- dated 5.12.1996 drawn on Nagpur District Central Cooperative Bank. The cheque was presented on 7.12.1996 but was dishonoured on 12.12.1996. The complainant sent a legal notice on 16.12.1996, received by the accused on 24.12.1996. The accused sent a reply on 3.1.1997 raising a false defence. The trial court acquitted the accused, leading to this appeal. The legal issue was whether the presumption under Section 139 of the Act that the cheque was issued for a legally enforceable debt or liability stood rebutted by the accused. The appellant argued that the presumption was not rebutted and the accused failed to prove his defence. The respondent contended that the cheque was given as security for a loan from the complainant's husband and that the complainant had no independent source of income. The High Court analyzed the evidence and found that the accused did not rebut the presumption. The court noted that the accused admitted his signature on the cheque and the receipt of the notice. The defence that the cheque was given as security was not supported by any evidence. The court held that the presumption under Section 139 was not rebutted and the accused was liable for the offence under Section 138. The appeal was allowed, the acquittal was set aside, and the accused was convicted and sentenced to simple imprisonment for three months and a fine of Rs.1,19,000/-.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Section 139 - Rebuttal - The accused issued a cheque for Rs.1,19,000/- towards repayment of deposits made by the complainant. The cheque was dishonoured. The accused claimed the cheque was given as security for a loan from the complainant's husband. The trial court acquitted the accused. On appeal, the High Court held that the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for a legally enforceable debt or liability was not rebutted by the accused. The accused failed to prove his defence on a preponderance of probabilities. The acquittal was set aside and the accused was convicted under Section 138 of the Act. (Paras 1-10) B) Negotiable Instruments Act - Dishonour of Cheque - Legally Enforceable Debt - The complainant deposited sums of Rs.15,000/-, Rs.20,000/- and Rs.23,000/- with the accused in 1990-1991. The accused issued a cheque for Rs.1,19,000/- in 1996 including interest. The High Court held that the deposits were made by the complainant and the cheque was issued towards repayment, constituting a legally enforceable debt. The accused's defence that the cheque was given as security for a loan from the complainant's husband was not supported by evidence. (Paras 2-10)
Issue of Consideration
Whether the presumption under Section 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for a legally enforceable debt or liability stands rebutted by the accused, and whether the acquittal of the accused by the trial court was proper.
Final Decision
The appeal is allowed. The judgment of acquittal passed by the Judicial Magistrate First Class, Nagpur in complaint case No. 82/1997 is set aside. The accused is convicted for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to suffer simple imprisonment for three months and to pay a fine of Rs.1,19,000/-.
Law Points
- Presumption under Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Burden of proof on accused
- Dishonour of cheque
- Legally enforceable debt or liability
