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of <h1>Supreme Court Upholds Conviction in Section 138 Case</h1> The Supreme Court reversed the High Court's decision and upheld the lower court's judgment, convicting the respondent under Section 138 of the Negotiable ... Dishonor of Cheque - cheque returned with the remarks “Stop Payment” - repayment of Loan - Section 139 of the Negotiable Instruments Act, 1881 - The defendant's case is that she is only the name lender to the business of films distribution run in the name of Vijayakumari Films which is actually controlled and managed by her husband Kuppuswamy. She has disputed taking any loan from the complainant as claimed by him - Burden to Prove - High Court placed the burden of proof on the complainant. Whether complainant has to prove existence of a legally enforceable debt before the presumption under Section 139 of the Negotiable Instruments Act starts operating and burden shifts to the accused? Held that:- In the present case since the cheque as well as the signature has been accepted by the accused respondent, the presumption under Section 139 would operate. Thus, the burden was on the accused to disprove the cheque or the existence of any legally recoverable debt or liability. However, it may be noted that the cheque was dishonoured because the payment was stopped and not for any other reason. This implies that the accused had knowledge of the cheque being presented to the bank, or else how would the accused have instructed her banker to stop the payment. Thus, the story brought out by the accused is unworthy of credit, apart from being unsupported by any evidence - The High Court was misplaced in putting the burden of proof on the complainant. As per Section 139, the burden of proof had shifted on the accused which the accused failed to discharge. Appeal allowed - decided in favor of appellant. Issues:1. Interpretation of Section 139 of the Negotiable Instruments Act regarding the presumption in favor of the holder.2. Dispute over the issuance and validity of a cheque leading to a case under Section 138 of the Negotiable Instruments Act.3. Burden of proof on the accused to disprove the existence of a legally enforceable debt or liability.Analysis:1. The case involved a dispute under Section 138 of the Negotiable Instruments Act, where the complainant alleged that the defendant failed to repay a loan and issued a cheque that was dishonored. The High Court acquitted the defendant based on the argument that the complainant used an old cheque due to ill will. However, the Supreme Court highlighted the presumption under Section 139, stating that the burden shifts to the accused to disprove the existence of a legally enforceable debt. The accused's defense that the cheque was given as security in 1999 was deemed unsupported by evidence, especially since the cheque was dishonored due to a stop payment instruction, indicating the accused's knowledge of the transaction.2. The High Court relied on the printed date on the cheque to support the defendant's claim that the cheque was issued in 1999, not in 2006 as alleged by the complainant. However, the Supreme Court emphasized that the burden of proof lay with the accused under Section 139. The court found the defendant's argument unsubstantiated as there was no evidence presented to prove the debt from 1999 or disprove the loan transaction in 2006. The court held that the printed date alone was not conclusive evidence and that the defendant failed to discharge the burden of proof required by law.3. The Supreme Court concluded that the High Court erred in placing the burden of proof on the complainant. As per Section 139 of the Negotiable Instruments Act, once the cheque and the accused's signature were accepted, the presumption in favor of the holder operated. The accused's failure to disprove the legally enforceable debt or liability led to the restoration of the lower court's judgment, convicting the respondent under Section 138 and sentencing her accordingly. The court emphasized the importance of evidence and the burden of proof in cases involving negotiable instruments to ensure justice and uphold legal principles.
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