TaxTMI 
TaxTMI 
2010 (3) TMI 1278
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....e request of accused, the complainant did not present the cheque for encashment on 5.1.2007 or immediately thereafter. He, however, presented the cheque in May, 2007 which was dishonoured with remarks "funds insufficient" and returned to his bankers unpaid. Complainant served demand notice in writing upon respondent by RPAD. Although served, the demand made in the legal notice was not complied with. Therefore, appellant /complainant filed Complaint under Section 138 of the N.I. Act against the accused. 3. Defence of the accused as is revealed from his statement recorded under Section 313 of Cr.P.C., is that Subhash, brother of complainant, might have stolen cheque in question from his Shop as he was not in his shop for about 2/3 months on account of illness of his daughter and that cheque must have been misused by complainant. Accused claimed that he does not know complainant­Gaurav and since Shop of Subhash (complainant's brother) is adjacent to his shop, he has cordial relations with Subhash. It was further claimed that false case has been instituted against him. 4. Before the Special Court, complainant examined himself as PW 1, Madan Bhake, an employee of his banke....
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....ence beyond reasonable doubt to impute penal liability under Section 138 of the N. I. Act upon the accused. The learned trial Magistrate suspected the claim in Complaint unreasonably merely because of non­production of Income ­tax return or account. The complainant is admittedly a businessman and a income Tax payer. Nonfiling of tax return or evidence of it's at payment cannot help the case of the accused while we consider such defence in the light of Evidence led at the trial. One cannot jump to the conclusion that complainant cannot recover amount of hand loan; merely for the reason that the complainant did not file income tax return. Absence of or non­production of such evidence was not sufficient to rebut statutory presumption that the cheque was issued for consideration by the accused. The complainant in the present case, is businessman having business concern M/s Kabra Sales & Marketing at Gandhibag, Nagpur. He stated in his affidavit that his brother Subhash and the accused have very close friendly and business relations. Subhash had assured that the accused who needed cash, would repay the money within a month hence ready cash was given interest free on 5.12....
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....iability of negotiable instrument and to facilitate trading. The statutory presumptions Under Section 118 and 139 of the Act enjoins upon the Court to raise presumptions until contrary is proved. The accused is required to rebut statutory presumptions by leading satisfactory evidence that the cheque was not issued for consideration nor in discharge of any debt or liability. Only when proof is adduced to satisfy the test "preponderance of probabilities" of prudent man to believe the accused, then only the burden may shift back to the complainant to adduce proof by convincing evidence of legal and enforceable debt to disprove the probabilities. This statutory presumption has to remain operative as prima facie case for complainant payee /holder in due course. The evidence to the contrary has to be led by the accused to the effect that the cheque was not issued for consideration/debt/ liability. Looking to the settled legal position the defence could not have been accepted as satisfactory and probable in the present case for to dislodge statutory presumption that the cheque in question was issued for discharge of debt or liability. It was for the accused to prove to the contrary that t....
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....equired to aver and prove the offence punishable under Section 138 of the N. I. Act; but the complainant is aided by the statutory presumptions which are self contained under Sections 118 and Section 139 of the Act. The complainant is required to prove that the cheque was drawn by the accused upon his account in the Bank for a certain sum of money on a certain date which returned dishonoured for non­payment on account of reason i.e. insufficient funds etc., and the accused has failed to pay the said amount, despite service of demand notice in writing upon him, within stipulated period. Once the primary facts as above, are averred and proved by the complainant in such case as required by the penal provision in Section 138 of the Act, the statutory presumptions arising are required to be rebutted by "proof" on preponderance of probabilities. Such evidence may be by production of documents to disprove the complainant's version or by citing material elicited from the cross­examination of the complainant and his witnesses, if any. The accused may not enter in the witness box if he can dislodge the statutory presumptions otherwise. 8. Under Section 139 of the N I Act, burd....
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....the cheque received it for the discharge of any debt or liability. The burden was upon the accused to rebut that "presumption" the defense evidence must be such which the Court can believe the defense to exist or consider it's existence as reasonably probable, the standard of reasonability being that of the prudent person. To discharge onus it may not be essential for the accused to enter in the witness box to depose as he can rebut the presumption by cross­examining the complainant and his witnesses if any to prove defence upon preponderance of probabilities. Thus, onus as expected to be discharged by the accused, was not discharged in this case. Once it is held that the accused had failed to rebut the statutory presumptions it ought to be concluded that the presumption itself was tantamount to proof of the case of the complainant. 9. Section 138 of the N. I. Act aims at punishing unscrupulous drawers of cheques who though purport to discharge their liability by issuing cheque, have no real intention to pay. This Court must on guard to prevent miscarriage of justice. The learned trial Magistrate ought to have noticed that the obligation on the part of the complainant st....