Accused fails to rebut Section 139 presumption in dishonored cheque case, minor flat number discrepancy insufficient defense

Gujarat HC dismissed a petition seeking quashing of proceedings under Section 138 NI Act for dishonored cheques. The accused argued cheques were not issued for legal liability, citing discrepancy in flat numbers between agreement and complaint. Court held that presumption under Section 139 NI Act favors complainant as signature on cheques was undisputed. Minor discrepancy in flat numbers could be typographical error and does not negate legal liability. Accused must discharge burden of proof through trial. No mala fide or vexatious claim established to warrant exercise of Section 482 CrPC jurisdiction.

---

---

Issues Involved:
1. Quashing of Criminal Case No. 691/2021 under Section 138 of the Negotiable Instruments Act.
2. Presumption under Section 139 of the Negotiable Instruments Act.
3. Rebuttal of presumption and burden of proof.
4. Jurisdiction under Section 482 of Cr.P.C. and Article 226 of the Constitution of India.

Summary:

1. Quashing of Criminal Case No. 691/2021 under Section 138 of the Negotiable Instruments Act:
The petitioner sought to quash the criminal case filed by respondent no.2 alleging that four cheques totaling Rs.28 lakhs issued by the petitioner were dishonored. The petitioner argued that the cheques were not issued for an existing debt or liability, citing discrepancies in the flat numbers mentioned in the complaint and the agreement.

2. Presumption under Section 139 of the Negotiable Instruments Act:
The court noted that under Section 139 of the N.I. Act, there is a presumption in favor of the holder of the cheque that it was received for the discharge of debt or liability. The court emphasized that this presumption is rebuttable and the burden is on the accused to prove otherwise.

3. Rebuttal of presumption and burden of proof:
The court referred to several judgments, including M.S. Narayana Menon v/s. State of Kerala, Kumar Exports v/s. Sharma Carpets, and Basalingappa v/s. Mudibasappa, to explain that the presumption under Section 139 can be rebutted by the accused through a probable defense. The court highlighted that the standard of proof for rebutting the presumption is that of preponderance of probabilities.

4. Jurisdiction under Section 482 of Cr.P.C. and Article 226 of the Constitution of India:
The court held that the jurisdiction under Section 482 of Cr.P.C. or Article 226 of the Constitution should be exercised sparingly and only when the proceedings are manifestly mala fide and vexatious. In this case, the court found no mala fide or vexatious claims and determined that the case deserved a trial.

Conclusion:
The petition was dismissed as the petitioner failed to establish that the proceedings were mala fide or vexatious. The court upheld the presumption under Section 139 of the N.I. Act and concluded that the case should proceed to trial.

---