TaxTMI 
TaxTMI 
2026 (5) TMI 429
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....the franchise of AACUS Education and the possibility to run its franchise in his property situated at Madhyam Gram. The petitioner was influenced and considered the opposite party no. 2 as the main franchisee of 24 Parganas North and paid the Opposite party no. 2 an amount of Rs. 5, 00, 000 vide cheque no. 174868 on January 9, 2013 towards the mandatory infrastructure of the franchisee along with the security cheque. The said deal was never executed and the opposite party no. 2 returned the entire money to the petitioner vide cheque no. 346906 January 10, 2013 except the security cheque. 3. The petitioners received a demand notice on August 12, 2014 issued by an advocate of the opposite party No. 2 intimating about the dishonouring of the aforesaid security cheque to the tune of Rs. 5 lakhs which was never returned by the opposite party no. 2 .The petitioners in reply to the said letter categorically denied about existing debt or liability upon the petitioners and clarified the closure of transactions in between the petitioners and the opposite party No. 2. The opposite party no. 2 initiated a proceeding under section 138/141 of the Negotiable Instrument Act, 1881 and the compla....
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....was presented on January 17, 2019 and in the account statement there is no such reflection. The learned advocate relies on the decision reported in Dattatraya vs Sharanappa (2024) 8 SCC 573 which inter alia clearly says that mere signature of accused on the cheque is not enough to raise the statutory presumption in favour of the complainant, in absence of other documents. It is therefore submitted that in such event the cheque in question completely lacking in evidence of presentation before the bank, subsequently followed by a cryptic legal notice and petition of complaint are unconvincing and the self-contradictory evidence of the complainant and other attending witnesses, it is imperative in the interest of justice that the order of conviction of the petitioner be set aside and the petitioner accused be acquitted from the instant case. Analysis 7. In this case the learned advocate who was representing the opposite party no. 2 submitted that due to the death of the complainant the vakalatnama has ceased to exist, however the argument on behalf of the opposite party No. 2 was concluded earlier and an application was filed on behalf of the opposite party no. 2 to withdraw the....
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.... advanced by the appellant complainant to the respondent accused and the defence was taken that the cheque was issued at the time of advancing the loan as security .The appellant established the signature on the cheque in question was of the respondent. It was held that there was no material to raise the presumption in favour of the appellant .The appellant did not plead a valid existence of a legally recoverable debt. It was held by the Hon'ble Supreme Court that Section 139 of the N.I. Act 1881, is an example of a reverse onus clause. This is done so, as the court expounds, in the light of Parliament's intent, which can be culled out from placing of act of dishonour of cheque in a statute having criminal overtone. It was further held that an accused cannot be obligated to rebut the said presumption through an unduly high standard of proof. 9. In the said decision, the Hon'ble Supreme Court further held that as per Section 140 of the said Act mens rea was held not material while dealing with proceedings under section 138 of N.I. Act. Further in a complaint lodged under section 138 of the NI Act it is required to be presumed that the cheque is issued for the debt and liability. ....
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....n in situations where the prosecution is required to prove the guilt of an accused. It was observed and held that:- "39....The accused is not expected to prove the non-existence of the presumed fact beyond reasonable doubt. The accused must meet the standard of "preponderance of probabilities.", similar to a defendant in a civil proceeding." It was further held that- "41. The preponderance of probability in favour of the accused's case may be even fifty one to forty-nine and arising out of the entire circumstances of the case, which includes: the complainant's version in the original complaint,the case in the legal/demand notice,complainant's case at the trial, as also the plea of the accused in the reply notice, his section 313 Cr.P.C or statement at the trial as to the circumstances under which the promissory note/cheque was executed. All of them can raise a preponderance of probabilities justifying a finding that there was "no debt/liability." 11. The point raised on behalf of the Opposite Party no. 2 that this court is empowered interfere when there is concurrent finding of the courts has been discussed in the case of Bir Singh vs Mukesh Kumar (supra). I....
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....fore this court on behalf of the petitioner and the judgement of the Hon'ble Apex Court passed in Dattatraya (Supra) that to adjudicate whether the concurrent findings are perverse it is to be seen whether there has been failure of justice. In paragraph 33.4 the Hon'ble Supreme Court took note of Babu Vs. State of Kerala (2010) 9 SCC 189 where it was clarified the ambit of the term "Perversity" in para 20 which is as follows:- "20. ....... If the findings have been arrived at by ignoring or excluding relevant material or by taking into consideration irrelevant/inadmissible material. The finding may also be said to be perverse if it is 'against the weight of evidence', or if the findings so outrageously defies logic as to suffer from the vice of irrationality". 15. The Hon'ble Supreme Court further held that " furthermore such interference is necessitated to safe guard the interest of justice when the acquittal is based on some irrelevant ground or fallacies in re-appreciation of any fundamental evidentiary material or a manifest error of law or in cases of non-adherence to the principles of natural justice or the decision is manifestly unjust or where an acquit....
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....ring that period. Accordingly it was argued that prima facie some inconsistencies are found and the presumption under Section 139 cannot be accepted. However, the Return memo dated 15th July, 2014 was issued because of 'drawee's signature differs 'and not because of insufficient fund. The cheque was dated 1st of July, 2014 therefore it becomes immaterial whether any amount was there to that extent or not. It is clear from the statement of Bank Branch Manager that the cheque was placed for clearance and could not be cleared due to mismatch of the signature of the drawee which was proved by production of document. Merely because the reverse side of the cheque was not signed or the deposit slip was not produced before the court can not ipso facto be a ground of suspicion about the intention of the bank official of a Nationalised bank. No criminal complaint is lodged against the bank official by the present petitioner alleging any misrepresentation of fact by them. Here the complainant not only merely assailed the fact that the cheque was placed for encashment but proved the same but adducing cogent evidence. The Hon'ble Supreme Court took note of the decision of Hitendra P. Dalal N....
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....ourt of law unless it is proved contrary that a cheque was not issued for discharge of any existing or future debt or liability and in the decision of Bir Singh Vs Mukesh Kumar (Supra), it was held that if a signature of a blank cheque stands admitted to having been inscribed voluntarily, it is sufficient to trigger a presumption under Section 139 of the N.I. Act 1881, even if there is no admission to the effect of execution of entire content of the cheque. 19. Both the Learned Court of Magistrate as well as Appellate Court discussed the essential ingredients to constitute the offence under Section 138 which includes that a cheque must be drawn on an account maintained by him in a bank for payment of a certain amount of money to another person and that the cheque has been presented to the bank within a period of 3 months. The cheque is returned by the bank unpaid, the payee of the holder in due course of the cheque makes a demand for the payment of the said amount and the drawer of such cheque failed to make payment of such amount in due course within 15 days of receipt of such notice and in the instant case the entire criterions were fulfilled and established by the present Opp....