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of <h1>Court dismisses appeal due to lack of legally recoverable debt in cheque case</h1> <h3>K. Narayana Nayak Versus M. Shivarama Shetty</h3> The appellant's complaint was dismissed by the trial court due to the lack of legally recoverable debt under the cheque issued. The court found that there ... - Issues Involved:1. Legally recoverable debt under the cheque.2. Proper service of statutory notice on the respondent.3. Issuance of cheque as security or for discharge of debt.4. Presentation of cheque within the stipulated time.5. Burden of proof and presumption under Section 139 of the N.I. Act.Summary:1. Legally Recoverable Debt:The trial court dismissed the complaint on the grounds that there was no legally recoverable debt under the cheque. The appellant argued that non-denial of the issuance of the cheque by the respondent conclusively establishes the existence of debt. However, the respondent contended that the dishonoured cheque was not in respect of a legally enforceable debt but was issued as a blank cheque for security purposes.2. Proper Service of Statutory Notice:The trial court found that there was no proper service of statutory notice on the respondent. The appellant argued that the notice was served on the respondent's wife, which should be considered sufficient. However, the respondent contended that he had not authorised anyone to receive the notice and that he had not been served with summons. The court concluded that the service of notice was not satisfactorily proved.3. Issuance of Cheque as Security or for Discharge of Debt:The respondent claimed that the cheque was issued as a blank cheque for security and not for the discharge of any legally enforceable debt. The court referred to various decisions, including ICDS Ltd. v. Beena Shabeer and Anr., which held that a cheque issued as security could still attract prosecution under Section 138 of the N.I. Act. However, the court found that the cheque in question was issued as security and not for an existing debt.4. Presentation of Cheque within the Stipulated Time:The respondent argued that the cheque was presented beyond six months from the date of its drawal. The court noted that according to Section 138 of the N.I. Act, the cheque has to be presented to the bank within six months from the date on which it is drawn. The court found that the cheque was issued as security and not for discharge of any existing debt, and thus, the presentation timeline was not a critical factor in this case.5. Burden of Proof and Presumption u/s 139 of the N.I. Act:The appellant argued that the presumption under Section 139 of the N.I. Act is the existence of liability and that the cheque issued is towards discharge of a legally recoverable debt. The court held that the respondent-accused need not disprove the appellant's case in its entirety but can discharge his burden on the basis of preponderance or probabilities through direct or circumstantial evidence. The court found that the respondent had discharged the initial onus of proof, and the appellant failed to produce documentary evidence to support his claim.Conclusion:The court concluded that the appellant failed to discharge his burden of proof and did not provide sufficient documentary evidence. The order of acquittal passed by the trial court was upheld, and the appeal was dismissed.
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