TaxTMI 
TaxTMI 
2016 (8) TMI 1098
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....ing basis and desired him to advance to them loan in sum of Rs. 53.5 lacs and therefore in Hong Kong he gave US$ 1,13,829.78 to appellant No.2, who promised that on returning to India he will complete the necessary formalities regarding collaboration and till then the money received would be treated as on loan with the partnership firm. As per him he received no further communication from the partners of the firm and he came to India in November, 2002 when, from the account of the partnership firm maintained with State Bank of Bikaner & Jaipur Branch, Kirti Nagar and State Bank of Mysore Branch Punjabi Bagh, 11 cheques totaling Rs. 53.5 lacs were issued in his name, details whereof are as under:- Sl.No. Cheque No Date Amount ....
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....ing basis. However, in paragraph 11 of the preliminary submissions, explaining the circumstances under which the cheques were issued it was pleaded that Rana Inderjit Singh offered to invest Rs. 53.5 lacs in the business of the defendants and to give security for the amount the defendants would receive from Rana Inderjit Singh the cheques in question were issued. It was pleaded that Rana Inderjit Singh never invested Rs. 53.5 lacs. 4. From the pleadings of the parties it is apparent that whereas Rana Inderjit Singh pleaded having paid US$ 1,13,829.78 to appellant No.2 and the cheques being issued when the agreement to collaborate did not go through and as per the original oral agreement the money had to be treated as a loan, the appellan....
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.... discharged by payment of amount due under the cheques. This presumption has not been adequately rebutted on behalf of the defendants inasmuch as, there is no valid explanation how the original cheques continued to remain with the plaintiff as onus to prove this was on the defendants as per issue No.3 framed. In fact, this is the crucial second fact/reason for holding that the plaintiff has proved that the amount of Rs. 53.50 lacs was paid to the defendants, inasmuch as, cheques were given in the year 2002 but till the due dates of the cheques from December, 2002 to January, 2004, no letter or any notice was ever written by the defendants to the plaintiff that in this entire period and for this long period plaintiff is illegally holding on ....
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....dent. Conceding that the appellants also failed to discharge the burden on them that the cheques were issued as security for a payment yet to be received, the appellants argued that a negative fact could not be proved by the appellants. 7. No serious attempt was made to question the reasoning by the learned Single Judge, who has reasoned that the cheques were issued as per the appellants in October, 2002; and the dates of the month of December, 2002, January, February, April, May, July, August, September, October and November, 2003 and January, 2004 was a crucial aspect coupled with the fact that till the year 2004 no letter was written by the appellants to Rana Inderjit Singh that since he had not transmitted Rs. 53.5 lacs to appellant ....
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....thereof. 10. Section 3 deals with proved, disproved and not proved. 'Burden of proof' is used in two senses. Firstly, with reference to the matter arising out of the pleading, the burden casts; and secondly as to who has to first prove a particular fact. The former is known as 'legal burden' and it never shifts. The latter is the 'evidentiary burden' and it shifts from one side to the other as was explained by the Supreme Court in the decision reported as AIR 1961 SC 1316 Kundan Lal Vs. Custodian Evacuee Property. Legal burden finds its reflection in Section 101 of the Evidence Act and the evidentiary burden is reflected in Sections 102 of the Evidence Act. Section 103 amplifies Section 101 regarding proof of a fact and Section 104 de....
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....e methods by which a defendant could rebut the presumption raised by Section 118 of the NI Act, 1881, the Supreme Court held that the evidence required to shift the burden need not necessarily be direct evidence i.e. oral or documentary evidence; it may comprise circumstantial evidence or presumption of law or facts. 15. Now, in the instant case both parties have failed to establish the respective fact asserted. The respondent failed to prove having paid US$ 1,13,829.78 to appellant No.2 and the appellants failed to prove that the cheques were issued as security for payment yet to be received. Therefore, the learned Single Judge has rightly held that circumstances enwombing the facts asserted would be relevant. 16. The appellants admi....