TaxTMI 
TaxTMI 
2024 (10) TMI 888
X X X X Extracts X X X X
X X X X Extracts X X X X
....olding the petitioner-accused (hereinafter, "accused") guilty of having committed offence punishable under Section 138 of the Negotiable Instruments Act (in short the "Act"), convicted and sentenced him to undergo simple imprisonment for a period of two months and pay compensation to the tune of Rs.1,10,000/- to the respondent-complainant. 2. Precisely, the facts of the case, as emerge from the record are that respondent-complainant (hereinafter, 'complainant') instituted a complaint under Section 138 of the Act, in the competent Court of law, alleging therein that in the month of April 2016, he had supplied hardware material to the accused amounting to Rs.80,000/-, who with a view to discharge his liability, issued two Cheques i.e. Cheque bearing No.885414 dated 03.06.2016 for Rs.40,000/- (Ex.C1) and another Cheque bearing No.885415 dated 03.06.2016 for Rs.40,000/- (Ex.C3), drawn on Punjab National Bank, Branch Office Baggi, District Mandi, Himachal Pradesh, however, on its presentation to Bank concerned, the same were dishonoured vide returning memos Ex.C2 and Ex.C4 with the remarks "Insufficient Funds". After receipt of aforesaid return memos, complainant served accused with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is signatures thereupon, rather, in his statement recorded under Section 313 Cr.P.C., he admitted complainant to be his acquaintance as well as factum of his having purchased the material, but for less amount. He categorically deposed that he had issued blank Cheque as a security, which subsequently came to be misused by the complainant. However, to probablize the aforesaid defence, no cogent and convincing evidence ever came to be led on record at the behest of accused, as such, no illegality can be said to have been committed by the learned Appellate Court while upholding the judgment of conviction and order of sentence recorded by learned trial Court. Since in the case at hand, factum of issuance of Cheques as well as his signatures thereupon never came to be refuted at the behest of accused, no illegality can be said to have been committed by both the Courts below while invoking Sections 118 and 139 of the Act, which speak about presumption in favour of the holder of the Cheque that Cheque was issued towards discharge of a lawful liability. No doubt, aforesaid presumption is rebuttable, but to rebut such presumption, accused either can refer to the documents and evidence led on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ong whose money is usually confined to the private parties involved in commercial transactions. In such a scenario, the test of proportionality should guide the construction and interpretation of reverse onus clauses and the defendant accused cannot be expected to discharge an unduly high standard of proof". The Court further observed that it is a settled position that when an accused has to rebut the presumption under Section 139, the standard of proof for doing so is all preponderance of probabilities. 24. Therefore, if the accused is able to establish a probable defence which creates doubt about the existence of a legally enforceable debt or liability, the prosecution can fail. The accused can rely on the materials submitted by the complainant in order to raise such a defence and it is inconceivable that in some cases the accused may not need to adduce the evidence of his/her own. If however, the accused/drawer of a cheque in question neither raises a probable defence nor able to contest existence of a legally enforceable debt or liability, obviously statutory presumption under Section 139 of the NI Act regarding commission of the offence comes into play if the same is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....for encashment, if amount taken or promised to be repaid is not paid. 11. Hon'ble Apex Court in case titled Sripati Singh v. State of Jharkhand, Criminal Appeal No. 1269-1270 of 2021, decided on 28.10.2021, has held as under: "16. A cheque issued as security pursuant to a financial transaction cannot be considered as a worthless piece of paper under every circumstance. 'Security' in its true sense is the state of being safe and the security given for a loan is something given as a pledge of payment. It is given, deposited or pledged to make certain the fulfilment of an obligation to which the parties to the transaction are bound. If in a transaction, a loan is advanced and the borrower agrees to repay the amount in a specified timeframe and issues a cheque as security to secure such repayment; if the loan amount is not repaid in any other form before the due date or if there is no other understanding or agreement between the parties to defer the payment of amount, the cheque which is issued as security would mature for presentation and the drawee of the cheque would be entitled to present the same. On such presentation, if the same is dishonoured, the consequences conte....