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        Case ID :

        2020 (10) TMI 903 - HC - Indian Laws

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        Cheque signature admission triggers statutory presumption; accused failed to rebut liability or defeat notice service and repayment duty. Admission that the cheque belonged to the accused's account and bore his signature triggered the statutory presumption of legally enforceable liability ...
                        Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.

                            Cheque signature admission triggers statutory presumption; accused failed to rebut liability or defeat notice service and repayment duty.

                            Admission that the cheque belonged to the accused's account and bore his signature triggered the statutory presumption of legally enforceable liability under the Negotiable Instruments law. The accused failed to rebut that presumption with independent material, and service of statutory notice was proved because it was sent to the correct address, delivery was confirmed, and no prompt reply was given. The plea that the underlying sale agreement was void for want of power to transfer the land also failed; an agreement to sell is not a transfer of property, and the accused could not retain money received while avoiding repayment on a mere allegation of illegality. The cheque liability remained enforceable.




                            Issues: (i) Whether the accused rebutted the statutory presumption arising from admission of cheque and signature and whether service of statutory notice stood proved; (ii) Whether the alleged sale agreement was void for want of power to transfer the land and, if so, whether the cheque liability still remained legally enforceable.

                            Issue (i): Whether the accused rebutted the statutory presumption arising from admission of cheque and signature and whether service of statutory notice stood proved.

                            Analysis: Once the accused admitted that the cheque belonged to his account and bore his signature, the presumption under the Negotiable Instruments law arose that it was issued towards discharge of a legally enforceable liability. The accused relied only on his own version of coercion and did not adduce independent evidence to probabilise that defence. The notice was sent to the correct address, the postal authority confirmed delivery, and a presumption of service also arose from the surrounding circumstances. The absence of a prompt reply to the notice further weakened the defence.

                            Conclusion: The presumption was not rebutted and service of notice stood proved against the accused.

                            Issue (ii): Whether the alleged sale agreement was void for want of power to transfer the land and, if so, whether the cheque liability still remained legally enforceable.

                            Analysis: The contention that the agreement was void on account of a bar against alienation was raised for the first time in revision and was not supported by the grant order or other reliable material. In any event, an agreement to sell is not itself a transfer of property. The Court also held that the accused could not retain the money received and avoid repayment by invoking illegality, as refund of the amount already received would follow from the law against unjust enrichment.

                            Conclusion: The agreement-void defence failed and the cheque liability remained enforceable.

                            Final Conclusion: The concurrent findings of guilt under the cheque dishonour provision were upheld and no ground for interference was made out.

                            Ratio Decidendi: Admission of cheque and signature triggers the statutory presumption of legally enforceable liability, which can be displaced only by a probable defence supported by material evidence; an agreement to sell does not amount to a transfer of property, and a party cannot escape repayment of money already received by relying on a mere alleged illegality in the underlying transaction.


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                            ActsIncome Tax
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