TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 383
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....ant. On the basis of order placed by the appellant, nonwoven fabric was sold to the appellant vide invoice No.120 dated 01st October, 2010 and invoice No.135 dated 16th October, 2010 amounting to Rs. 5,07,062/and Rs. 5,10,000/which was delivered through public carrier truck bearing Nos. HR38G5607 and HP710693 to the appellant accused and in lieu thereof, a cheque bearing No.323930 dated 15th October, 2010 and No.323935 dated 01st November, 2010 were issued by the appellant in the name of the complainant from her account of the Punjab National Bank, Karnal in order to meet the legal existing and enforceable liabilities. The cheques on presentation were returned vide memo dated 19th October, 2010 and 10th November, 2010 from Punjab National Bank, Karnal with a note of "insufficient funds" in the account of the appellant. Two legal notices dated 29th October, 2010 and 19th November, 2010 were sent by the complainant to the appellant on two addresses. The notices were duly served but the appellant neither responded to the notices nor made any payment in furtherance thereto within the statutory period hence, two separate complaints were filed by the complainant respondent under Section ....
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....ecord while setting aside the finding of acquittal recorded by the trial Judge, held that the appellant was guilty of committing an offence under Section 138 of the Act and consequently, awarded appropriate punishment of fine/sentence by the impugned judgment dated 30th April, 2019, which is the subject matter of challenge in appeals before us. 8. Learned counsel for the appellant submitted that the complainant was not able to prove that the material/goods were ever sent or received by the appellant and in terms of the complaint, the burden was on the complainant to prove that the material/goods were received by the appellant, against which the cheques were received as security and even though the appellant has not placed any evidence to disprove or rebut the presumption in defence, still the complainant has to discharge its burden and has to stand on his own legs. In the absence of the prima facie burden being discharged by the complainant, mere issuance of the cheques by the appellant would not have been sufficient to justify that the cheques were issued in discharge of any debt or other liability. In support of his submission, learned counsel for the appellant has placed relian....
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....vidence to rebut the presumption that the cheques were issued for consideration. Once the facts came on record remained unrebutted and supported with the evidence on record with no substantive evidence of defence of the appellant to explain the incriminating circumstances appearing in the complaint against her, no error has been committed by the High Court in the impugned judgment, and the appellant has been rightly convicted for the offence punishable under Section 138 of the Act and needs no interference of this Court. 13. The object of introducing Section 138 and other provisions of Chapter XVII in the Act appears to be to enhance the acceptability of cheques in the settlement of liabilities. The drawer of the cheque be held liable to prosecution on dishonour of cheque with safeguards provided to prevent harassment of honest drawers. Section 138 primarily relates to a civil wrong and the amendment made in the year 2000 specifically made it compoundable. The burden of proof was on the accused in view of presumption under Section 139 of the Act and the standard of proof was of "preponderance of probabilities". The N.I. Act including a cheque carrying a presumption of consideratio....
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....ceipt of information by him from the bank regarding the return of the cheque as unpaid; and (c) the drawer of such cheque fails to make the payment of the said amount of money to the payee or, as the case may be, to the holder in due course of the cheque, within fifteen days of the receipt of the said notice. Explanation.-For the purposes of this section, "debt or other liability" means a legally enforceable debt or other liability." 15. The scope of Section 139 of the Act is that when an accused has to rebut the presumption, the standard of proof for doing so is that of "preponderance or probabilities" which has been examined by a three Judge Bench of this Court in Rangappa vs. Sri Mohan (2010) 11 SCC 441, which reads as under: "26. In light of these extracts, we are in agreement with the respondent claimant that the presumption mandated by Section 139 of the Act does indeed include the existence of a legally enforceable debt or liability. To that extent, the impugned observations in Krishna Janardhan Bhat [(2008) 4 SCC 54 : (2008) 2 SCC (Cri) 166] may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it wa....
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....accused for a sum of Rs. 3 lakhs each. The said cheques were presented to the bank concerned within the period of their validity and were returned unpaid for the reason of either the balance being insufficient or the account being closed. All the basic ingredients of Section 138 as also of Sections 118 and 139 are apparent on the face of the record. The trial court had also consciously taken note of these facts and had drawn the requisite presumption. Therefore, it is required to be presumed that the cheques in question were drawn for consideration and the holder of the cheques i.e. the complainant received the same in discharge of an existing debt. The onus, therefore, shifts on the appellant-accused to establish a probable defence so as to rebut such a presumption. ....... 17. On the aspects relating to preponderance of probabilities, the accused has to bring on record such facts and such circumstances which may lead the Court to conclude either that the consideration did not exist or that its nonexistence was so probable that a prudent man would, under the circumstances of the case, act upon the plea that the consideration did not exist. This Court has, time and again, emp....
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....he accused has also an option to prove the nonexistence of consideration and debt or liability either by letting in evidence or in some clear and exceptional cases, from the case set out by the complainant, that is, the averments in the complaint, the case set out in the statutory notice and evidence adduced by the complainant during the trial. Once such rebuttal evidence is adduced and accepted by the court, having regard to all the circumstances of the case and the preponderance of probabilities, the evidential burden shifts back to the complainant and, therefore, the presumptions under Sections 118 and 139 of the Act will not again come to the complainant's rescue." It was further considered by this Court in Uttam Ram vs. Devinder Singh Hudan and Another (2019) 10 SCC 287. 18. In the case at hand, elucidating from the principles, the complainant was able to prove that the appellant placed the order for purchasing nonwoven fabric which was sold vide invoice No. 120 dated 01st October, 2010 and invoice No. 135 dated 16th October, 2010 amounting to Rs. 5,07,062/and Rs. 5,10,000/which was delivered through public carrier truck bearing Nos. HR38G5607 and HP710693 and in lieu t....
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....d not on the principles as being examined in the criminal case to prove the guilt of the accused beyond reasonable doubt. So far as other case cited by the learned counsel for the appellant i.e. Indus Airways Private Limited and Others Vs. Magnum Aviation Private Limited and Another (2014) 12 SCC 539, there was sufficiency of material on record to justify that the cheques were issued as advance payment for purchase of goods, and one of the terms and conditions of the contract was that the entire payment would be made to the supplier in advance. However, much within the time, the supplier complainant received the letter from the purchasers cancelling the purchase orders and requested the supplier to return both the cheques. The supplier pursuant thereto, sent response asking the purchasers as to when the supplier could collect the payment, and only thereafter, the suppler sent a legal notice to the purchasers and filed a complaint under Section 138 of the Act. In the given circumstances, it was observed by this Court that the complainant had failed even prima facie that there was a legally enforceable debt or other liability subsisting on the date of drawal of the cheque as contempl....