Case Note & Summary
The original complainant, Smt. Sulekhabai Chowghule (since deceased, represented by her legal heir), filed a complaint under Section 138 of the Negotiable Instruments Act, 1881 against the first respondent, Shaik Vahid Jahangir, alleging that the respondent had taken a hand loan of Rs.30,00,000/- on 28.04.2009 and issued a cheque dated 28.04.2009 drawn on the Bank of India, Vasco Branch, in favour of the complainant. The cheque was presented for collection but was dishonoured on 30.04.2009 with the remark 'Account Closed'. The complainant issued a legal notice on 07.05.2009, which was received by the respondent on 09.05.2009, but the amount was not paid within the statutory period. The trial court acquitted the respondent, holding that the complainant failed to prove that the loan was legally enforceable and that the presumption under Section 139 was rebutted. The appellant (legal heir of the deceased complainant) challenged the acquittal. The High Court of Bombay at Goa allowed the appeal, holding that the presumption under Section 139 NI Act was not rebutted by the accused. The court found that the complainant had proved the existence of a legally enforceable debt, as she had sufficient funds in her account with the Lokmanya Multipurpose Co-operative Credit Society Limited to advance the loan. The accused's defence that the cheque was given as security for a different transaction was not proved. The court convicted the accused under Section 138 NI Act and sentenced him to pay a fine of Rs.30,00,000/- as compensation to the complainant, with a default sentence of six months simple imprisonment.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Section 138 - Presumption under Section 139 - Legally Enforceable Debt - The complainant gave a hand loan of Rs.30,00,000/- to the accused, who issued a cheque which was dishonoured. The trial court acquitted the accused, but the High Court held that the presumption under Section 139 NI Act was not rebutted by the accused, and the loan was legally enforceable. The appeal was allowed, and the accused was convicted. (Paras 1-20) B) Negotiable Instruments Act - Rebuttal of Presumption - Section 139 - Burden of Proof - The accused failed to rebut the presumption that the cheque was issued for a legally enforceable debt. The mere denial of the loan or the signature on the cheque was insufficient to rebut the presumption. The High Court held that the accused must lead evidence to show that the cheque was not issued for a debt or liability. (Paras 10-15) C) Negotiable Instruments Act - Hand Loan - Legally Enforceable Debt - The High Court held that a hand loan is a legally enforceable debt, and the complainant's evidence of having sufficient funds to advance the loan was credible. The accused's defence that the cheque was given as security for a different transaction was not proved. (Paras 5-8)
Issue of Consideration
Whether the acquittal of the first respondent for an offence under Section 138 of the Negotiable Instruments Act, 1881 was proper, particularly in light of the presumption under Section 139 of the Act and the evidence on record.
Final Decision
Appeal allowed. The acquittal of the first respondent is set aside. The first respondent is convicted for an offence under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay a fine of Rs.30,00,000/- as compensation to the complainant, in default to undergo simple imprisonment for six months.
Law Points
- Presumption under Section 139 Negotiable Instruments Act
- 1881
- Rebuttal of presumption
- Burden of proof
- Legally enforceable debt
- Hand loan
- Dishonour of cheque
