2016 (4) TMI 828

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....8 of the Negotiable Instruments Act, 1881, (hereinafter referred to as 'Act'), inter alia, alleging therien that it had entered into a contract with the respondent herein as per which the appellant was to supply some material for the completion of certain project which was undertaken by the respondent.It was further stated that the respondent was supposed to make payment in terms of the said agreement as under: "Payment 1. Rs. 25,000.00 at the time of release of Purchase Order 2. Rs. 25,000.00 at the time of Board Level Demonstration. 3. Rs. 25,000.00 at the time of Road Triais. 4. Rs. 50,000.00 at the time of supply of units. 5. Balance Rs. 50,000.00 plus the taxes applicable wi....

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....0 6. 795554  15th Dec 2004 75,000=00   and both the cheques were returned by the bank, Canara Bank, Sarakki Layout Branch, Bangalore stating the reason as INSUFFICIENT FUNDS as per the endorsement i.e. memorandum of cheques unpaid, dated 10.12.2004 and 16.12.2004 respectively. Thus you have committed an offence under Section 138 of the Negotiable Instruments Act read with section 420 of the IPC. And hence I hereby issue the following; You hereby take this notice that the cheques issued by you in favour of my client dated 22.12.2004 and 15.12.2004 bearing number 795553 and 795554 respectively, towards the payment of balance amount i.e. Rs. 1,25,000=00 (Rupees One lakh twenty five thousand) ....

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....in section 138 for the discharge, in whole or in part, of any debt or other liability." Once the appellant files a complaint on the basis that he was holding the aforesaid cheques as holder in due course which were admittedly given by the respondent to the appellant and the said cheques were dishonoured when they were presented for encashment to the Bank and he, further, is able to establish that due notice of the dishonour of the said cheques was given to the respondent as provided in law, there was a clear presumption in favour of the appellant that the money was due under the said cheques.It may be noted that there is no defence to the effect that the cheques were not issued by the respondent or the cheques do not bear its signatures ....