TaxTMI 
TaxTMI 
2019 (8) TMI 905
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....e respondent-accused in lieu of payment owed to the appellant were dishonoured on presentation. It was averred that despite issuance of legal notice, the respondent did not make payments. 3. In case No.339/OA/NI/2004/A, the respondent-accused issued three cheques drawn on UTI Bank details of which are as under:- Date Number Amount 1. 08.08.2003 002497 Rs. 17,540.00 2. 18.08.2003 002463 Rs. 17,871.00 3. 25.08.2003 002480 Rs. 17,760.00 Total = Rs. 53,171.00 4. In case No.499/OA/NI/2004/A, the respondent-accused issued nine cheques, details of which are as under:- Date Number Amount 1. 01.09.2003 002481 Rs. 18,000.00 2. 15.09.2003 633427 Rs. 20,000.00 3. 22.09.2003 633428 Rs. 20,000.00 4. 29.09.2003 633429 Rs. 20,000.00 5. 03.10.2003 531977 Rs. 25,000.00 6. 06.10.2003 633430 Rs. 20,979.00 7. 13.10.2003 531975 Rs. 20,000.00 8. 27.10.2003 531976 Rs. 25,000.00 9. 10.11.2003 531978 Rs. 25,000.00 Total = Rs. 1,93,979.00 5. When the above said cheques were presented to United Western Bank, Margao Branch for encas....
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....arned counsel for the appellant submitted that the transaction between the parties was a mercantile transaction and during the course of the business, running accounts were maintained when purchases were made at different times and payments were made by both modes i.e. cash and cheques. It was submitted that both the courts below overlooked the fact that the transactions were mercantile transactions mixed up with cash payments and also payments made by cheques. It was submitted that the courts below erred in not keeping in view the statutory presumption available under Section 139 of the Negotiable Instruments Act to the appellant and that the respondent-accused failed to rebut the presumption by leading cogent and consistent evidence. The learned counsel urged that the impugned judgment is contrary to the object of Section 138 and Section 139 of the Negotiable Instruments Act and is liable to be set aside. 9. The learned counsel appearing for the respondent submitted that the respondent used to leave the cheques with the complainant when he purchased the commodities - rice bags and used to make cash payment towards those commodities for which complainant issued receipts. It was....
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..... 15,500/- 9. 1689 13.10.2003 Rs. 3,300/- 10. 1746 20.10.2003 Rs. 17,000/- 11. 1763 23.10.2003 Rs. 1,500/- 12. 1760 23.10.2003 Rs. 2,300/- 13. 1808 27.10.2003 Rs. 16,000/- 14. 1828 01.11.2003 Rs. 3,000/- 15. 1882 05.11.2003 Rs. 20,000/- 16. 1942 11.11.2003 Rs. 15,000/- 17. 1941 11.11.2003 Rs. 3,000/- 18. 1953 15.11.2003 Rs. 3,000/- 19. 1958 17.11.2003 Rs. 12,000/- 20. 2001 17.11.2003 Rs. 3,000/- 12. Case of the complainant is that whenever the respondent used to make cash purchases, cash memos/receipts were issued to the respondent and the above twenty receipts Ex.- 22/C (colly) pertain to cash sale. Complainant-PW-1 further stated that the cheques issued by the respondent-accused are subject matter of the complaints and pertain to the credit purchases made by the respondent-accused and the respondent has not made the payment or cleared the dues of the purchases made by him on credit. On the other hand, case of the respondent is that he always used to make credit purchase and used to leave blank cheques with the complainant-appellant and....
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....t the respondent-accused did not take any steps to get back the cheques and continued with the business transaction even though the complainant has not returned the cheques after payment of the money. 15. The trial court in its judgment referred to the three cheques and observed that the three cheques bearing Nos.2463, dated 18.08.2003; 2480 dated 25.08.2003 and 2497 dated 08.08.2003 go to suggest that the later cheque bearing No.2497 was given much more earlier to 18.08.2003 or 25.08.2003 which seems inconsistent and it would not have been in the normal course of business. The trial court held that the date of issuance of the three cheques suggests that the cheques were already with the complainant and they were utilised by the complainant thereafter. On this aspect, PW-1 was cross-examined as to why cheque bearing No.2497 was issued on 08.08.2003 while it ought to have been issued after 25.08.2003 to which PW-1 stated that he does not know about the same. After referring to the above three cheques, the trial court held that in view of inconsistency, the presumption available under Section 139 of the Negotiable Instruments Act is not available to the complainant which was affir....
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....tive of the existence of a fact, conveniently called the "presumed fact" drawn by a judicial tribunal, by a process of probable reasoning from some matter of fact, either judicially noticed or admitted or established by legal evidence to the satisfaction of the tribunal. Presumption literally means "taking as true without examination or proof". ........ 18. Applying the definition of the word "proved" in Section 3 of the Evidence Act to the provisions of Sections 118 and 139 of the Act, it becomes evident that in a trial under Section 138 of the Act a presumption will have to be made that every negotiable instrument was made or drawn for consideration and that it was executed for discharge of debt or liability once the execution of negotiable instrument is either proved or admitted. As soon as the complainant discharges the burden to prove that the instrument, say a note, was executed by the accused, the rules of presumptions under Sections 118 and 139 of the Act help him shift the burden on the accused. The presumptions will live, exist and survive and shall end only when the contrary is proved by the accused, that is, the cheque was not issued for consideration ....
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....at the note in question was not supported by consideration or that he had not incurred any debt or liability, the accused may also rely upon circumstantial evidence and if the circumstances so relied upon are compelling, the burden may likewise shift again on to the complainant. The accused may also rely upon presumptions of fact, for instance, those mentioned in Section 114 of the Evidence Act to rebut the presumptions arising under Sections 118 and 139 of the Act." [underlining added]. 18. In the present case, by examining himself as PW-1, the complainant has discharged the initial burden cast upon him that the cheques were issued for the rice bags purchased on credit. With the examination of PW-1, the statutory presumption under Section 139 of the Act arises that the cheques were issued by the respondent-accused for the discharge of any debt or other liability in whole or in part. The courts below disbelieved the evidence of the complainant on the ground that there are no averments in the complaint that the commodities were sold for cash and that the rice bags were sold on credit and the cheques were issued for the goods sold on credit. Though the complaint contains ....