TaxTMI 
TaxTMI 
2023 (9) TMI 705
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....led a complaint under Section 138 of the Negotiable Instrument Act interalia, stating that the accused is his close acquaintance. On 02.01.2015, Shri Krishan Pachori requested for loan of Rs. 6,27,500/- for his personal need. He gave requested amount in presence of Goutam Singh Kushwah and Amrit Lal Kushwah. Accused gave two cheques as security for the loan amount in presence of the witnesses. 2. Complainant presented Cheque No.224639 dated 20.02.2015 for amount of Rs. 3,00,000/- and Cheque No.224640 dated 25.01.2015 for amount of Rs. 3,27,500/- to the Bank of India, Branch- Morar, Gwalior. Both cheques were returned dishonored due to insufficiency of funds in the account of accused Shri Krishan Pachori. Complainant sent demand notice through registered post on 16.04.2015. Despite service of notice accused did not repay the amount of cheque. Therefore, complaint for offence punishable under Section 138 of the N.I. Act, was filed. Learned trial Court, after trial, convicted accused Shri Krishan Pachori vide judgment dated 06.07.2018 passed in RCT No.6473 of 2015 for offence punishable under Section 138 of the N.I. Act and released him on probation under Section 12 of the Proba....
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....finding existence of legally recoverable debt or liability. Learned counsel for the petitioner relying on the judgment of Supreme Court in the case of Vijay Vs. Laxman and another 2013 (2) JLJ 1 and Basalingappa Vs. Mudibasappa AIR 2019 SC 1983 submitted that existence of legally recoverable debt or liability needs to be proved by the complainant for making out an offence punishable under Section 138 of the N.I Act. Per contra, learned counsel for the respondent submitted that the accused failed to rebut legal presumption with regard to existence of legally recoverable debt or liability. The defence of the accused in this regard stands demolished by his own statement in Paras 8, 9 and 13 of his cross-examination, wherein, he has stated that he has never reported for giving of cheques in question as security for transaction of sale of plot. Both the Courts have rightly convicted the accused. No patent illegality is reflected in either of the judgments. Therefore, the revision petition deserves to be dismissed. Heard learned counsel for both the parties and perused the record. Under Section 397 of the Cr.P.C, the Court is vested with the power to call for and examine the ....
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.... of Negotiable Instrument Act, the complainant has to prove beyond doubt existence of legally recoverable debt or liability. Chapter XIII of the Negotiable Instruments Act, 1881 provides for "Special Rules of Evidence". Section 118 provides for presumptions as to negotiable instruments as follows: Presumptions as to negotiable instruments.- Until the contrary is proved, the following presumptions shall be made: (a) of consideration: that every negotiable instrument was made or drawn for consideration, and that every such instrument when it has been accepted, indorsed, negotiated or transferred, was accepted, indorsed, negotiated or transferred for consideration; (b) as to date : that every negotiable instrument bearing a date was made or drawn on such date;" Section 139 of the Act, 1881 provides for presumption in favour of holder as under8 Presumption in favour of holder.- It shall be presumed, unless the contrary is proved, that the holder of a cheque received the cheque, of the nature referred to in Section 138 for the discharge, in whole or in part, of any debt or other liability." The Supreme Court Bharat Barrel & Drum Mfg. Co. Vs. ....
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....Sharma Carpets, (2009) 2 SCC 513, the Supreme Court examined the application of above mentioned statutory presumptions and laid down : "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 and in discharge of any debt or liability. A presumption is not in itself evidence, but only makes a prima facie case for a party for whose benefit it exists. 19. The use of the phrase "until the contrary is proved" in S....
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....e impugned observations in Krishna Janardhan Bhat may not be correct. However, this does not in any way cast doubt on the correctness of the decision in that case since it was based on the specific facts and circumstances therein. As noted in the citations, this is of course in the nature of a rebuttable presumption and it is open to the accused to raise a defence wherein the existence of a legally enforceable debt or liability can be contested. However, there can be no doubt that there is an initial presumption which favours the complainant."(emphasis added) Manoj Kushwaha PW-1 stated that he has advanced loan on Rs. 6,27,500/- to the accused on 02.01.2014 in presence of Hotam Singh and Amrit Lal Kushwaha. The accused has promised to pay Rs. 3,27,500/- in January, 2015 and remaining Rs. 3,00,000/- in February, 2015 and to secure the payment, the accused has issued Cheque No.224640 dated 25.01.2015 for amount of Rs. 3,27,500/- and Cheque No.224639 dated 20th February, 2015 for amount of Rs. 3,00,000/-. The testimony of Manoj Kushwaha PW-1 is duly supported by Hotam Singh PW-2 and Amrit Lal Kushwaha CW-1. Amrit Lal was examined as Court witness in compliance with the order dat....
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....lso mentioned in the sale deed (Exhibit D-1). The Cheque No.224637 was encashed. Shri Krishan Pachori (DW-1) failed to provide plausible explanation as to why there was difference between the amount of cheque issued towards consideration of the sale of plot and total amount of cheques in question, issued towards security of encashment of other cheque. Shri Krishan DW-1 in Para 13 of his cross-examination admitted that despite encashment of cheque, he has not asked for return of the blank cheques from Manoj. Shri Krishan Pachori (DW-1) admitted that he has not given any notice or complaint to Police, he has not applied for stoppage of payment of the cheques. The conduct of accused as revealed by cross-examination, manifests the improbability and falsity of defence. Learned trial Court and the First Appellate Court considered these aspects in detail and committed no error in holding that no inference can be drawn that cheques in questions were issued as guarantee for encashment of other cheque issued for payment of consideration amount. Thus, the accused failed to establish probability of his defence. Learned counsel for the petitioner contends that complainant has failed to pr....