AI Drafter 
TaxTMI 
TaxTMI 
2022 (7) TMI 1026
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....s the complainant and the respondent as the accused hereinafter. 3. The facts in brief to decide the appeal are that the complainant filed a complaint under Section 138 of Negotiable Instruments Act alleging therein that the complainant and the accused were having very good relations. Since the accused and the complainant had frequent money transactions with each other; therefore, the accused gave the complainant a cheque bearing No. 30784136344 of State Bank of India Branch Karera. The said cheque upon submission, dishonored by the Bank. The complainant received Bank memo stating that "Account closed". Thereafter, the complainant sent a notice through registered post to the accused which he refused to receive. Hence, the complainant fil....
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....to the facts of the present case, it would be apposite to discuss the legal standards required to be met by both sides. In order to establish the offence under Section 138 of NI Act, the prosecution must fulfill all the essential ingredients of the offence. Perusal of the bare provision reveals the following necessary ingredients of the offence:- 1. The cheque was drawn by a person on an account maintained by him for payment of money and the same is presented for payment within a period of 3 months from the date on which it is drawn or within the period of its validity; 2. The cheque was drawn by the drawer for discharge of any legally enforceable debt or other liability; 3. The cheque was returned unpaid by the b....
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....is enumerated in Section 139 of NI Act. The provision lays down the presumption that the holder of the cheque received it for the discharge, in whole or part, of any debt or other liability. The combined effect of these two provisions is a presumption that the cheque was drawn for consideration and given by the accused for the discharge of debt or other liability. Both the sections use the expression "shall", which makes it imperative for the court to raise the presumptions once the foundational facts required for the same are proved. 11. It has been held by a three-judge bench of the Hon'ble Apex Court in the case of Rangappa vs. Sri Mohan, (2010) 11 SCC 441 that the presumption contemplated under Section 139 of NI Act includes the ....
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....lf is not sufficient to prove that the cheque was given for discharge of any legally enforceable debt or other liability. 13. According to the complainant the huge amount of money allegedly given to the accused was arranged by selling the lands but there is no proof to show that the complainant was a land lord and sold his lands. The complainant did not produce any books of accounts or any other proof to show how he managed to arrange so much money. Therefore, his financial competence to lend such a huge amount is also not found to be proved. 14. Consequently, the presumption of existence of a legally enforceable debt can not be drawn as it has been rebutted by the circumstances itself as discussed above. 15. The Apex Court in the ....
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....ute mandates raising of presumption, but it stops at that. It does not say how presumption drawn should be held to have rebutted. Other important principles of legal jurisprudence, namely presumption of innocence as human rights and the doctrine of reverse burden introduced by Section 139 should be delicately balanced. Such balancing acts, indisputably would largely depend upon the factual matrix of each case, the materials brought on record and having regard to legal principles governing the same." 16. The Hon'ble Supreme court in the case of Basalingappa v. Mudibasappa, (2019) 5 SCC 418 has held that inference of preponderance of probabilities can be drawn not only from the materials brought on record by the parties but also by ref....