TaxTMI 
TaxTMI 
2026 (4) TMI 509
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....s on 17th June 2022. The second respondent invoked the revisional jurisdiction of the Sessions Court for challenging the said order. The Sessions Court was of the view that on the date of issuance of the cheque in question, there was no legally enforceable debt to be satisfied by the drawer. By the order dated 30th December 2022, it set aside the order passed by the learned Metropolitan Magistrate issuing process. The complainant approached the High Court of Bombay by filing a writ petition under Article 227 of the Constitution of India and challenged the order passed by the Sessions Court. The learned Single Judge, however, dismissed the writ petition observing that no error of jurisdiction was found in the impugned order. Being aggrieved, the complainant has challenged the aforesaid orders in this Criminal Appeal. 3. Shorn of necessary details, the facts relevant for considering the challenge as raised are that it is the case of the appellant that she had some disputes with her husband, Mr. Ashwin Natwarlal Sheth in the matter of alleged illegal and fraudulent transfer of shares pertaining to Sheth Developers and Realtors (India) Limited and Sheth Developers Private Limited. S....
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....nforceable. According to him, on a plain reading of the complaint filed by the appellant under Section 138 of the N.I. Act coupled with the undisputed position as regards the issuance of the cheque by the second respondent, its valid presentation, its subsequent dishonour, issuance of the statutory notice and failure on the part of the second respondent to comply with the statutory notice were the only relevant considerations at the stage of issuance of process in the complaint. In other words, it was urged that the presumption under Section 139 of the N.I. Act that operated in favour of the payee could be dislodged by the drawer of the cheque only during the course of trial and not at the pre-trial stage. When the basic ingredients for making out an offence under Section 138 of the N.I. Act had been made out and process had been issued by the learned Metropolitan Magistrate, scuttling the proceedings at this stage was unjustified. To substantiate this contention, reliance was placed on the decision in Sunil Todi and others Vs. State of Gujarat and another 2021 INSC 823 by urging that the Sessions Court had misread the said judgment. It was, thus, submitted that the Sessions Court ....
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....ssued by the second respondent was not towards any legally enforceable debt. 7. Perusal of the complaint filed by the appellant under Section 138 of the N.I. Act indicates reference to an amicable settlement of various disputes between the appellant and her husband, pursuant to which the appellant's husband executed a registered irrevocable Power of Attorney dated 10th December 2022 in favour of the appellant. It was agreed under the settlement agreement that the appellant's husband would transfer by way of gift three properties and also pay an amount of Rs.50 crores on the execution of a Declaration-cum-Indemnity document. In reciprocation, complaints made by the appellant as regards fraudulent transfer of her shares in two companies were to be withdrawn. To ensure execution of the Declaration-cum-Indemnity document, the second respondent acted as a guarantor and issued the cheque in question drawn in favour of the appellant. The appellant accordingly signed the Declaration-cum Indemnity document on 13th January 2022. On getting knowledge of the sale of certain shares contrary to the settlement agreement, the appellant presented the cheque issued by the second respondent for be....
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....that has been included in furtherance of the legislative object of improving the credibility of negotiable instruments. The presumption is rebuttable and the accused can raise a defence wherein the existence of a legally enforceable debt or liability can be contested. In Rajesh Jain Vs. Ajay Singh 2023 INSC 888, it has been held as under: "34. The NI Act provides for two presumptions: Section 118 and Section 139. Section 118 of the Act inter alia directs that it shall be presumed, until the contrary is proved, that every negotiable instrument was made or drawn for consideration. Section 139 of the Act stipulates that 'unless the contrary is proved, it shall be presumed, that the holder of the cheque received the cheque, for the discharge of, whole or part of any debt or liability'. It will be seen that the 'presumed fact' directly relates to one of the crucial ingredients necessary to sustain a conviction under Section 138. 35. Section 139 of the NI Act, which takes the form of a 'shall presume' clause is illustrative of a presumption of law. Because Section 139 requires that the Court 'shall presume' the fact stated therein, it is obligatory on....
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....resentation and subsequent dishonour at the instructions of the second respondent is not in dispute. The second respondent does not also dispute that he had issued the said cheque and that it was duly signed by him. The issuance of statutory notice as well as filing of the complaint within the prescribed period are also not in dispute. In such a situation, when the basic ingredients of Section 138 stand duly satisfied and the statutory presumption under Section 139 gets triggered, coming to a conclusion that the cheque was not issued for a legally enforceable debt at the pre-trial stage itself without granting an opportunity to the complainant to substantiate her case by leading evidence would amount to ignoring the statutory presumption that the cheque had been issued for a legally enforceable debt or liability. As a consequence, the presumption under Section 139 of the N.I. Act gets washed away even prior to commencement of the trial. We are of the view that in the facts of the present case, the dismissal of the complaint as a consequence of setting aside the order issuing process is totally unjustified in the absence of any material being brought on record by the second responde....