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2015 (4) TMI 1366
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....ound that some of Rs. 1,01,78,713 was due and payable by the accused. A Memorandum of Understanding was also came to be executed between the parties wherein the respondent/accused accepted and admitted their liability and issued 10 post dated cheques towards discharge of their liability. The cheques were presented for payment on due dates and they were dishonoured with an "endorsement funds insufficient" and therefore, statutory notice was given and there was no reply from the respondent/accused and thereafter, the complaints were filed. 3. During trial, the complainant/appellant examined his power agent as PW.1 and marked Special Power of Attorney as Ex. P.1, Cheque as Ex. P.2, Return Memo Ex. P.3, Debit Advice as Ex. P.4 and Acknowledgments by A.1 and A.2 as Exs. P.6 and P.7. The respondent/accused examined the second respondent as DW.1 and also examined one more witness. 4. The defence of the respondent/accused before the trial Court was that the cheques were given as security and there was no legally enforceable liability and though they had dealings with the complainant/appellant they subsequently, stopped dealings with the appellant as the quality of the steel supplied by t....
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.... imprisonment and to pay a fine of Rs. 5,000/- and negatived the claim of the appellant for compensation. 6. The respondent filed Appeals before the learned Additional District Sessions Judge, Fast Track Court No. II, Chennai and the learned appellate Judge, held that the presumption under section 139 of the N.I. Act is only a rebuttal presumption and the appellant has not produced any document to prove the liability payable by the respondent, and therefore, the appellant failed to establish the subsisting liability, and therefore, the judgment of the trial Court is liable to be set aside. Aggrieved by the same, this Appeal is filed by the complainant/appellant. 7. Mr. S. Ashok Kumar, learned Senior Counsel appearing for the appellant submitted that the lower appellate Court without properly appreciating the well considered judgment of the learned trial Judge erred in allowing the Appeals without giving any reason or without any finding whether the respondent has rebutted the presumption by making out a probable defence. He submitted that the transaction between the appellant and the respondent was admitted and it is the case of the respondent that they have paid the entire amoun....
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....rove that there was no debt or liability and having admitted the business transaction and paid amount and claimed discharge, the respondent is also liable to prove the same. Having failed to do so, the presumption under section 139 of the N.I. Act has to be drawn in favour of the appellant. 8. On the other hand, Mr. N. R. Elango, learned Senior Counsel appearing for the respondent submitted that the main basis for the prosecution is that there was dealing between the parties and the accounts were reconciled and the Memorandum of Understanding of Understanding was executed between the parties wherein the amount was arrived at and towards the discharge of that amount, 10 cheques were given on various dates. Admittedly, the Memorandum of Understanding of Understanding was not filed and therefore, when the complainant/appellant failed to prove the basis of their case, the lower appellate Court rightly held that there was no subsisting liability and when the appellant did not adduce evidence regarding the legally enforceable liability and the cheques issued towards the discharge of the liability, there is no need for the respondent/appellant to rebut the presumption and only after the ....
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....p by the appellant and the appellant also failed to produce the document despite the order passed by the Court. According to me, when the accused admitted the issuance of cheque and contended that blank cheques were issued and also contended that the cheques were issued as security and also contended that the amount payable by them towards the purchase of steel from the complainant/appellant were also paid, then, in my opinion, the respondent has to prove by cogent evidence the circumstances under which the cheques were issued as security and also the manner in which the amounts were paid towards the purchases made by them from the appellant. According to me, when the respondent took up the defence that the cheques were issued as security and admitting the transaction between the appellant and him, the respondent took the plea that they repaid the entire amounts, there is no need for the appellant to prove that the cheques were issued for consideration by the respondent. No doubt, in this case, the Memorandum of Understanding of Understanding though mentioned in the notice and also in the complaint and in evidence, was not produced, having regard to the law laid down by the Hon'....
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....n of which the court may either believe that the consideration did not exist or its non-existence was so probable that a prudent man would, under the circumstances of the case, shall act upon the plea that it did not exist. We find ourselves in the close proximity of the view expressed by the Full Benches of the Rajasthan High Court and Andhra Pradesh High Court in this regard." (ii) In Hiten P.Dalal Versus Bratindranath Banerjee [2001 Supreme Court Cases (Cri) 960], it has been held as follows:- "20. . . . . . . The presumption which arises under Section 138 provides more specifically that where any cheque drawn by a person on an account for payment of any amount of money for the discharge in whole or in part of any debt or other liability, is returned by the drawee bank unpaid, either because of the amount of money standing to the credit of that account is insufficient to honour the cheque, such persons shall be deemed to have committed an offence and shall be punished with imprisonment for a term which may extend to twice the amount of the cheque, or with both. The nature of the presumption under Section 138 is subject to the three conditions specified relating to presentati....
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....ers its existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it exists". Therefore, the rebuttal does not have to be conclusively established but such evidence must be adduced before the Court in support of the defence that the Court must either believe the defence to exist or consider its existence to be reasonably probable, the standard of reasonability being that of the 'prudent man'." (iii) In the judgment in 2001 Supreme Court Cases (Cri) 960, the Hon'ble Supreme Court relied upon the judgment reported in AIR 1958 Supreme Court 61 in the matter of State of Madras V. A. Vaidyanatha Iyer. In the aforesaid judgment, the Hon'ble Supreme Court, while interpreting the words, "shall presume" and "may presume" as found in the Evidence Act, held that the presumption of law cannot be successfully rebutted by merely raising probability however reasonable when the actual fact is the reverse of the fact which is presumed. Something more than raising a reasonable probability is required for rebutting the presumption of law. This was approved by the Constitution Bench in the judgment reported....
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....ra, the Hon'ble Supreme Court also relied upon the judgment reported in (2006) 6 SCC 39 in the matter of M.S.Narayana Menon Vs. State of Kerala wherein the Supreme Court held that the presumption under Section 118 and 139 of the N.I. Act is rebuttal and the standard for such rebuttal is preponderance of probability and not the proof prove beyond reasonable doubt and insofar as the accused is concerned, mere preponderance of probability is sufficient to discharge the presumption. 14. Under Sections 118 and 139 of the N.I. Act, a presumption can be drawn when the instrument was issued that it was towards consideration. Therefore, when the issuance of cheque is admitted, the presumption can be drawn in favour of the payee that the drawer issued a cheque for valid consideration and thereafter, the drawer has to rebut the presumption by proving that there was no consideration for issuance of cheque and while proving that there was no consideration for the issuance of cheque the drawer has to make out a probable defence and in such circumstances, the probabilities will be taken into consideration. Once the accused made out a probable case by leading cogent evidence, once again the b....
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....late Court and corresponding to Crl.A.Nos.395 of 2006, 391 of 2006 and 389 of 2006, respectively, are scrutinised by me. On verification of the aforesaid three cheques, I found that the dates were originally written as 5.3.2000, 5.1.2000 and 5.2.2000 respectively and later, altered to 5.3.2001, 5.1.2001 and 5.2.2001. The alteration of dates was also counter signed by the respondent. Therefore, the case of the respondent that they signed in all the cheques and the cheques were otherwise blank and they did not fill up the date, name of the payee and the amounts cannot be accepted. Further, having admitted the transaction between them and having regard to the evidence that they used to pay the amount immediately after the purchase, there was no necessity for giving 10 cheques as security. Further, when the respondent pleaded that the cheques were issued as security, then it pre-supposes the transaction between the parties and the money to be paid by the accused and if there had been no transaction and no money was due, there was no necessity for the respondent to give security of 10 cheques. I have also gone through all the cheques and I do not find any difference in ink in signature ....