TaxTMI 
TaxTMI 
2026 (2) TMI 116
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....n 27.11.2015 for the improvement of his jewelry business promising to repay the amount within one month. The complainant approached the accused on 29.12.2015 and demanded the amount. The accused issued a cheque dated 29.12.2015 for Rs. 14 lakhs drawn on Andhra Bank, Marthandam Branch in favour of the complainant. The complainant presented the cheque for collection on 29.12.2015 through his banker Pandiyan Grama Bank, Mekkamandapam Branch but the same was returned dishonored as account closed. The complainant sent a legal notice dated 08.01.2016 to the accused demanding him to pay the amount covered by the cheque and the accused having received the notice on 09.01.2016 neither sent any reply nor complied with the notice demand. Since the accused has not repaid the cheque amount within the stipulated time, the complainant was constrained to file the above complaint for the offence under Section 138 r/w 142 of the NI Act. 5. The learned Judicial Magistrate, upon receiving the complaint, recorded the sworn statement of the complainant and on perusing the records, upon satisfied that there existed a prima facie case took the case on file in S.T.C.No.87 of 2016 and ordered for issuanc....
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....y the said amount within one month, that the complainant approached the accused and demanded the loan amount and at that time, the accused issued a cheque dated 29.12.2015 for Rs. 14 lakhs drawn on Andhra Bank, Marthandam Branch under Ex.P.1, that the complainant presented the cheque for collection through his banker Pandiyan Grama Bank, Mekkamandapam Branch on 29.12.2015 but the same was returned dishonored as account of the accused was closed through banker's memo dated 31.12.2025 under Ex.P.2, that the complainant sent a legal notice dated 08.01.2016 under Ex.P.3 directing the accused to pay the amount covered by the cheque, that the accused received the legal notice on 09.01.2016 vide Ex.P.4 postal acknowledgement card, that the accused sent a reply notice dated 16.12.2016 under Ex.P.5 with false and untenable allegations and that since the accused has not complied with the notice demand, the complainant was forced to file the above complaint. 11. It is pertinent to note that though the accused having received the statutory notice, has not chosen to send reply immediately and after lodging of the private complaint, the accused sent the reply notice on 16.02.2016 under Ex....
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.... accused to pay the amount within stipulated time. On considering the evidence of P.W.1 and also the admission of the accused with respect to Ex.P.1 (cheque) and the signature found therein, this Court has no other option but to draw a presumption under Sections 118 and 139 of the NI Act. 16. No doubt, as rightly contended by the learned counsel appearing for the accused, the presumptions available under Sections 118 and 139 of the NI Act are rebuttable in nature. It is settled law that the accused, in order to rebut the presumption drawn in favour of the complainant under Sections 118 and 139 of the NI Act, is not required to adduce any evidence and he can very well prove his probable defence through the evidence adduced by the complainant and that the standard of proof required is of preponderance of probabilities. 17. The learned counsel appearing for the accused would rely on a decision of the Hon'ble Supreme Court in APS Forex Services Private Limited Vs. Shakti International Fashion Linkers and others reported in (2020) 12 SCC 724 to show the legal position that whenever accused raises a issue of financial capacity of complainant in support of his probable defence, ....
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....e in nature. However, to rebut the presumption the accused was required to lead the evidence that full amount due and payable to the complainant has been paid. In the present case, no such evidence has been led by the accused. The story put forward by the accused that the cheques were given by way of security is not believable in absence of further evidence to rebut the presumption and more particularly the cheque in question was issued for the second time, after the earlier cheques were dishonoured. Therefore, both the courts below have materially erred in not properly appreciating and considering the presumption in favour of the complainant that there exists legally enforceable debt or liability as per Section 139 of the N.I. Act. It appears that both, the Learned Trial Court as well as the High Court, have committed error in shifting the burden upon the complainant to prove the debt or liability, without appreciating the presumption under Section 139 of N.I. Act. As observed above, Section 139 of the Act is an example of reverse onus clause and therefore once the issuance of the cheque has been admitted and even the signature on the cheque has been admitted, there is always a pr....
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.... P.W.1 would reiterate her case about the borrowal of the accused, 24. P.W.4 (husband of the complainant), in his evidence, would reiterate the version of the complainant about the borrowal of the accused and the issuance of Ex.P.1 (cheque). 25. During the trial, the accused also took the stand that the complainant had no financial capacity to advance such a large loan amount to him. As rightly contended by the learned counsel appearing for the complainant, it is pertinent to note that in his Ex.P.5 reply notice, the accused did not dispute the financial capacity of the complainant to lend money. In Ex.P.5, the accused specifically stated that the complainant was working as a postal office RD agent and that he had obtained a loan of Rs. 1,00,000/- from the complainant in 2011 and Rs. 1,50,000/- from her husband in 2010. During her testimony, P.W.1 was cross-examined on the suggestion that she had no wherewithal to lend money. P.W.1 in cross-examination would say, 26. P.W.4, in his evidence, would say that he saved Rs. 7 lakhs for meeting out the educational expenses of his son and that the complainant had Rs. 8 lakhs from the chit transactions. He would say, 27. As righ....
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....in reversing the judgment of the trial court. The observations of the trial court that there was no documentary evidence to show the source of funds with the respondent to advance the loan, or that the respondent did not record the transaction in the form of receipt of even kachcha notes, or that there were inconsistencies in the statement of the complainant and his witness, or that the witness of the complaint was more in the know of facts, etc. would have been relevant if the matter was to be examined with reference to the onus on the complaint to prove his case beyond reasonable doubt. These considerations and observations do not stand in conformity with the presumption existing in favour of the complainant by virtue of Sections 118 and 139 of the NI Act. Needless to reiterate that the result of such presumption is that existence of a legally enforceable debt is to be presumed in favour of the complainant. When such a presumption is drawn, the factors relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining if the accused has been able to rebut the presumptio....
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.... true that reply notice was sent by the appellant, therein he admits the case of the respondent that the parties were having a cordial relationship. In the reply notice the appellant has not set up any case that the respondent did not have the financial capacity to advance the loan. In fact even we notice that there is no reference to the loss of the cheque book or signed cheque leaf. No complaint was given of the loss of the cheque book or the signed cheque leaf either to the police or to the bank." 30. The Hon'ble Supreme Court in S.S.Production Vs. T.R.Pavithran Prasanth reported in 2024 INSC 1059, has held that mere taking a counter stand to raise a probable defence is not sufficient to shift the onus to the complainant and the relevant passage is extracted hereunder: "8. From the order impugned, it is clear that though the contention of the petitioners was that the said amounts were given for producing a film and were not by way of return of any loan taken, which may have been a probable defence for the petitioners in the case, but rightly, the High Court has taken the view that evidence had to be adduced on this point which has not been done by the petitioners....
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.... dispute contains the signature of the accused in one ink and the other particulars are filled in a different ink, it cannot be held, in law that the cheque is invalid or an inchoate instrument. 35. As rightly contended by the learned counsel appearing for the complainant, even assuming that a blank cheque leaf was given by the accused, which is towards some payments, would attract presumption under Section 139 of the NI Act in the absence of any cogent evidence to show that the cheque was not issued in discharge of a debt. 36. It is necessary to refer the decision of this Court in Padmavathy Vs. M/s Sri Balaji Networks passed in Crl.R.C.(MD)No.523 of 2023, dated 30.06.2023, while dealing with the scope of Section 20 of the Negotiable Instruments Act, this Court has observed as follows: "7. The learned Counsel for the complainant would submit that as per Section 20 of the Negotiable Instruments Act, the holder of the cheque either by himself or through any third party can very well fill up the blank cheques and it is necessary to refer Section 20 of the Negotiable Instruments Act hereunder for better appreciation; "Inchoate stamped instruments : Where one pe....
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....ditional, had been conferred upon the holder of the negotiable instrument - Request of the appellant for referring the cheque to Forensic examination was bona fide." 10. At this juncture, it is necessary to refer the recent judgment of the Hon'ble Supreme Court in Oriental Bank Of Commerce vs Prabodh Kumar Tewari reported in 2022 Live law SC 714, wherein it has been held as follows: "Negotiable Instruments Act, 1881 - Sections 138, 139 - A drawer handing over a cheque signed by him is liable unless it is proved by adducing evidence at the trial that the cheque was not in discharge of a debt or liability. The evidence of a handwriting expert on whether the respondent had filled in the details in the cheque would be immaterial to determining the purpose for which the cheque was handed over. Therefore, no purpose is served by allowing the application for adducing the evidence of the hand- writing expert. The presumption which arises on the signing of the cheque cannot be rebutted merely by the report of a hand-writing expert. Even if the details in the cheque have not been filled up by drawer but by another person, this is not relevant to the defense whether cheq....
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....ase of the petitioner further. A drawer who signs a cheque and hands it over to the payee is presumed to be liable unless the drawer adduces evidence to rebut the presumption that the cheque has been issued towards payment of a debt or in discharge of a liability and that the cheque presumption arises under Section 138 of the Negotiable Instruments Act. Section 139 of the said Act mandates that it shall be presumed, unless the contrary is proved, that the holder of a cheque received it for the discharge, in whole or in part, of any debt or other liability. In case if the accused is able to raise a probable defence which creates doubts about the existence of a legally recoverable debt or liability, the prosecution can fail. The standard of proof for rebuttal of presumption under Section 139 of the Negotiable Instruments Act is guided by preponderance of probabilities. For deciding the above, the fact that the details in the cheque have been filled up not by the drawer, but by some other person, would be immaterial." 37. Even assuming that the contents of cheque were not filled by the accused, the same is wholly irrelevant. 38. As rightly contended by the learned counsel appear....
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.... கொடà¯à®•à¯à®•à®µà®¿à®²à¯à®²à¯ˆ எனà¯à®±à®¾à®²à¯ சரிதானà¯." Document 5 அனà¯à®±à¯ எதிரிகà¯à®•à¯ லடà¯à®šà®®à¯ 27.11.2015 14 கொடà¯à®¤à¯à®¤à¯‡à®©à¯. எனà¯à®©à¯à®Ÿà¯ˆà®¯ வீடà¯à®Ÿà®¿à®²à¯ வைதà¯à®¤à¯ காலை 10.00 மணிகà¯à®•à¯ கொடà¯à®¤à¯à®¤à¯‡à®©à¯. என௠கணவர௠அபà¯à®ªà¯‹à®¤à¯ இரà¯à®¨à¯à®¤à®¾à®°à¯. வேற௠யாரà¯à®®à¯ அபà¯à®ªà¯‹à®¤à¯ இலà¯à®²à¯ˆ. .. 29.12.2015-ல௠எதிரி காசோலையை எனகà¯à®•à¯ கொடà¯à®¤à¯à®¤à®¾à®°à¯.....