2005 (5) TMI 691

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.... petitioners and the order summoning the petitioners dated 30.7.2003. The petitioners Nos. 2 & 3 are the partners of petitioner No. 1. As per the complaint the petitioners obtained a loan from the respondent No. 2 and in discharge of their liability issued three cheques bearing No. 225065 dated 25.4.2003 for Rs.78,833/-, cheque bearing No. 225066 dated 9.4.2003 for Rs.7,833/- and cheque bearing No....

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.... sufficiency of the funds in the account of the petitioners. It is also pleaded that the cheques were issued without consideration. 3. The law in respect of applicability of Section 138 of Negotiable Instrument Act on account of dishonour of cheque for reasons 'payment stopped by drawer' has been settled by the Supreme Court in the case of M.M.T.C. Ltd. and Anr. v. M/s. Medchal Chemical....

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.... in this judgment that if the payment was stopped on account of a dispute in respect of absence of liability, the accused has to show that there were sufficient funds but the burden to prove the same is with the accused which the accused has to discharge at the time of leading defense evidence. Referring to its earlier decision in Modi Cements Ltd. v. Kuchil Kumar Nandi reported as (1998) 3 SCC 24....

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....n thus show that the 'stop payment' instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was....