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INDU MALHOTRA, AJAY RASTOGI
Sumeti Vij – Appellant
Versus
Paramount Tech Fab Industries – Respondent
Question 1? What is the presumption and onus of proof under Sections 118(a), 139 and 138 of the Negotiable Instruments Act, 1881 in a case of dishonour of cheque? Question 2? What is the role and evidentiary weight of a recording of the accused’s statement under Section 313 Cr.P.C. in NI Act proceedings? Question 3? How does the quasi-criminal nature of Section 138 proceedings affect the applicability of acquittal principles from other criminal cases?
Key Points: - (!) NI Act proceedings under Section 138 are quasi-criminal in nature; principles of acquittal in other criminal cases do not apply. (!) - (!) Section 118(a) provides presumption of consideration for negotiable instruments; (!) Section 139 provides presumption that the cheque was issued for discharge of debt or liability; (!) burden shifts to accused to rebut by preponderance of probabilities. (!) - (!) To rebut, accused may show nonexistence of debt/consideration or that nonexistence is probable; direct or circumstantial evidence may be used; mere denial is insufficient. (!) - (!) The presumption under Section 139/118 is not re-opened after evidence is adduced unless rebuttal is accepted; if accused does not rebut, conviction under Section 138 may stand. (!) - (!) The accused’s statement under Section 313 Cr.P.C. is not substantive defence evidence; it is for explanation of incriminating circumstances. (!) - (!) The High Court’s reversal of acquittal and conviction upheld where accused failed to rebut presumption and no defence evidence was adduced. (!) - (!) Two separate legal notices were served; failure to respond supports presumption of debt/liability. (!) - (!) The object of NI Act is to enhance acceptability of cheques in settlement of liabilities; safeguards to prevent harassment of honest drawers. (!)
JUDGMENT :
AJAY RASTOGI, J.
1. Leave granted.
2. The appellant is aggrieved by the judgment dated 30th April, 2019 passed by the High Court of Himachal Pradesh holding the appellant guilty of offence under Section 138 of the Negotiable Instruments Act, 1881 (hereinafter referred to as the “Act”) after reversal of the finding of acquittal returned by the learned trial Judge by its judgment dated 28th September, 2012.
3. The brief facts of the case which emanates from the record are that the appellant accused approached the complainant-respondent in its factory at Moginand and expressed her desire to purchase non-woven fabric from the complainant. On the basis of order placed by the appellant, non-woven fabric was sold to the appellant vide Invoice No. 120 dated 01st October, 2010 and Invoice No. 135 dated 16th October, 2010 amounting to Rs. 5,07,062/- and Rs. 5,10,000/- which was delivered through public carrier truck bearing Nos. HR-38G-5607 and HP-71-0693 to the appellant accused and in lieu thereof, a cheque bearing No. 323930 dated 15th October, 2010 and No. 323935 dated 01st November, 2010 were issued by the appellant in the name of the complainant from her account of the Punjab Na
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