Case Note & Summary
The appellant, Dr. Kailash Charkha, was the original complainant in Summary Criminal Case 160 of 2004 before the Judicial Magistrate First Class, Washim. He filed a complaint against the respondent-accused, Sayyad Khwaja, for dishonour of a cheque under Section 138 of the Negotiable Instruments Act, 1881. The trial court acquitted the accused by judgment dated 22.2.2005. The appellant challenged the acquittal in the High Court. The facts, as per the complaint, were that the accused issued a cheque for a legally enforceable debt. The accused's defence was that he had entered into an oral agreement to purchase a plot from the complainant and gave a blank cheque as earnest money, but the agreement fell through and the cheque was misused. The trial court accepted this defence and acquitted the accused. The High Court, on appeal, held that the accused failed to rebut the statutory presumption under Sections 118(a) and 139 of the Act. The defence was not probabilized even on a preponderance of probabilities. The court noted that the accused did not examine any witness or produce any documentary evidence to support his claim. The mere oral statement was insufficient. Consequently, the High Court allowed the appeal, set aside the acquittal, and convicted the accused under Section 138 of the Act. The accused was sentenced to pay a fine of Rs. 1,10,000, with Rs. 1,00,000 as compensation to the complainant, and in default, simple imprisonment for three months.
Headnote
A) Negotiable Instruments Act - Dishonour of Cheque - Presumption under Sections 118(a) and 139 - Rebuttal - The accused failed to probabilize the defence that the cheque was given as blank earnest money for an oral agreement to purchase a plot which was frustrated. The mere denial or improbable explanation does not rebut the presumption. The trial court's acquittal was set aside and the accused was convicted under Section 138 of the Negotiable Instruments Act, 1881. (Paras 3-5)
Issue of Consideration
Whether the accused successfully rebutted the statutory presumption under Sections 118(a) and 139 of the Negotiable Instruments Act, 1881 that the cheque was issued for a legally enforceable debt or liability.
Final Decision
Appeal allowed. The judgment of acquittal dated 22.2.2005 is set aside. The accused is convicted for offence under Section 138 of the Negotiable Instruments Act, 1881 and sentenced to pay fine of Rs.1,10,000, out of which Rs.1,00,000 shall be paid as compensation to the complainant, and in default of payment of fine, simple imprisonment for three months.
Law Points
- Presumption of consideration under Section 118(a) and Section 139 of Negotiable Instruments Act
- 1881
- Rebuttal of presumption by accused
- Standard of proof for rebuttal
