2018 (6) TMI 1087 - HC - Indian Laws

Court affirms lower decision on cheque bounce case, emphasizing statutory presumptions

The High Court upheld the lower courts' decision, dismissing the revisionist's appeal and confirming that the revisionist had violated Section 138 of the ... Dishonor of Cheque - closure of Bank Account of complainant - Presumptions as to negotiable instruments - section 118 of N.I. Act - Held that:- Supreme Court in M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd., [2001 (11) TMI 837 - SUPREME COURT OF INDIA], has held that the authority shows that even when the cheque is dishonoured by reason of stop-payment instructions by virtue of Section 139 the court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course this is a rebuttable presumption. The accused can thus show that the 'stop-payment' instructions were not issued because of insufficiency or paucity of funds. The important thing is that the burden of so proving would be on the accused.' we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. So far as the arguments that 'date 02.05.2012' was fabricated and was not in handwriting of the revisionist is concerned, date is not a substantial things, in the case where post dated cheques are issued. Issuing of disputed cheque and the amount mentioned in it, is admitted by the revisionist. He cannot be given any benefit of the fact that the date mentioned in this cheque was filled up by any other person. Revision dismissed. Issues Involved:1. Validity of the cheque under Section 138 of the Negotiable Instruments Act, 1881.2. Whether the cheque was issued as security or for the discharge of a debt or liability.3. Admissibility and relevance of the evidence presented by both parties.4. The presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881.5. The legitimacy of the trial court's rejection of the application for expert opinion on the handwriting.6. The relevance of the date mentioned on the cheque.Issue-wise Detailed Analysis:1. Validity of the Cheque under Section 138 of the Negotiable Instruments Act, 1881:The court examined whether the cheque issued by the revisionist was valid under Section 138 of the Negotiable Instruments Act, 1881. The cheque was dishonoured due to the account being closed, and the revisionist failed to make the payment within 15 days of receiving the notice, thereby committing an offence under Section 138.2. Whether the Cheque was Issued as Security or for the Discharge of a Debt or Liability:The revisionist contended that the cheque was given as security for a loan advanced to third parties, Akhtar and Azad Saifi, and not for the discharge of a debt. However, the court found that the revisionist failed to prove this claim. The evidence presented by Pradeep Yadav showed that the cheque was issued for the repayment of a loan taken by the revisionist.3. Admissibility and Relevance of the Evidence Presented by Both Parties:Pradeep Yadav provided documentary evidence and witness testimonies to support his claim. The revisionist also presented documentary evidence and argued that the cheque was given as security. However, the court found that the revisionist failed to discharge the burden of proof and rebut the statutory presumption under Section 139 of the Act.4. The Presumption under Sections 118 and 139 of the Negotiable Instruments Act, 1881:The court emphasized the presumption under Sections 118 and 139 that the cheque was issued for the discharge of a debt or liability. This presumption is rebuttable, but the revisionist failed to provide sufficient evidence to rebut it. The court cited several Supreme Court judgments, including M.M.T.C. Ltd. v. Medchl Chemicals and Pharma (P) Ltd. and Rangappa v. Sri Mohan, to support its decision.5. The Legitimacy of the Trial Court's Rejection of the Application for Expert Opinion on the Handwriting:The revisionist argued that the date on the cheque was not in his handwriting and requested an expert opinion. The trial court rejected this application, and the High Court upheld this decision, stating that the date is not a substantial element in cases involving post-dated cheques. The issuing of the cheque and the amount mentioned were admitted by the revisionist.6. The Relevance of the Date Mentioned on the Cheque:The court held that the date on the cheque was not a significant issue since the revisionist admitted to issuing the cheque and the amount mentioned. The court found that the revisionist could not benefit from the argument that the date was filled in by another person.Conclusion:The High Court dismissed the revision, upholding the concurrent findings of the lower courts that the revisionist had committed an offence under Section 138 of the Negotiable Instruments Act, 1881. The court found no merit in the revisionist's arguments and emphasized the statutory presumptions in favor of the holder of the cheque.