Accused convicted for cheque dishonour after failing to rebut Section 139 presumption despite documentary evidence of loan default

Bombay HC allowed appeal against accused's acquittal in cheque dishonour case. Trial court erroneously acquitted accused despite failure to rebut Section 139 presumption under Negotiable Instruments Act. Documentary evidence established accused obtained loan of Rs. 6 lakhs with 15% interest, repayable in 60 instalments. Cheque amount was less than outstanding loan balance shown in ledger. Accused admitted signature, received legal notice at registered address without reply, and raised no defence regarding notice receipt. HC held presumption under Section 139 remained unrebutted, requiring conviction. Trial court's order quashed and set aside.

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Issues Involved:
1. Whether Respondent No. 1 succeeded in rebutting presumption under Section 139 of Negotiable Instruments ActRs.

Summary:

Issue 1: Rebutting Presumption under Section 139 of Negotiable Instruments Act

By this appeal, the Appellant/Complainant challenges the impugned Judgment dated 31.07.2013, where the learned Magistrate acquitted the Accused/Respondent No. 1 for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881.

The Complainant, a registered Society engaged in financial business, claimed that Respondent No. 1/Accused, a member of the Society, obtained a loan of Rs. 6,00,000/- and issued a cheque for Rs. 3,36,000/- towards part payment. The cheque was returned unpaid, and despite a legal notice, the Accused did not pay the amount or reply, leading to the complaint being filed.

The Complainant produced documents like the loan agreement and demand promissory note, which were not disputed in cross-examination. The Accused admitted to signing blank cheques, but the Magistrate found that the presumption under Section 139 was rebutted.

Mr. Sawant for the Appellants argued that the findings were perverse, as the Accused admitted to signing the cheques and obtaining the loan. The documents showed an outstanding amount of more than Rs. 5,00,000/-. Mr. Shet for the Respondent No. 1 countered that the cross-examination destroyed the Complainant's case and justified the outstanding amount.

The court observed that the Complainant's documents, such as the loan agreement and ledger, proved the loan and outstanding amount. The Accused's defence of handing over blank cheques was deemed an eye wash. The signature on the cheque was admitted, and no serious dispute was raised about the loan or legal notice.

The court referred to the case of Bir Singh V/s Mukesh Kumar, emphasizing that once the signature on the cheque is admitted, the presumption under Section 139 stands unless rebutted by the Accused. The documentary evidence showed the outstanding amount, and the Magistrate's findings were against settled law and considered perverse.

In conclusion, the court found the Accused guilty under Section 138 of the Negotiable Instruments Act, quashed the impugned order, and kept the matter for hearing on the point of sentence.

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