Back
IN THE HIGH COURT OF BOMBAY
Bharat P. Deshpande, J.
Govind B. Prabhugaonkar - Appellant
Versus
Rajendra Anant Varik - Respondent
Criminal Appeal No. 53 of 2017
Decided On : 07-01-2023
NEGOTIABLE INSTRUMENTS - CHEQUE DISHONOUR - Negotiable Instruments Act, Sec. 138, 139; Goa Money-Lenders Act, 2001, Sec. 2(b), 2(k), 14 - The court discussed the provisions of Sec. 138 and 139 of the Negotiable Instruments Act, which establish the presumption of a legally enforceable debt upon the issuance of a cheque. The court emphasized that the burden of proof lies on the accused to rebut this presumption on a preponderance of probabilities. The Goa Money-Lenders Act was also referenced, clarifying that the complainant's actions did not constitute money lending as defined by the Act, as no interest was charged and the transactions were not conducted as a business. This legal framework influenced the court's decision to restore the trial court's conviction of the accused.
JUDGMENT/ORDER
1. The present appeal is filed by the appellant/original complainant thereby challenging the judgment and order passed by the First Appellate Court in Criminal Appeal No.72 of 2016 dtd. 09/12/2017 wherein the said appeal filed by the respondent was allowed and judgment and conviction passed by the trial Court under Sec. 138 of the Negotiable Instruments Act ('the N.I. Act' for short) was quashed and set aside.
2. Vide order dtd. 03/10/2017 in Criminal Misc. Application No. 184 of 2017, leave to file an appeal was granted. Accordingly, the appeal was registered.
3. Heard learned Counsel Shri V.A. Lawande along with Shri Parimal Redkar, for the appellant and learned Counsel Shri John A. Lobo for the respondent.
4. The parties are hereinafter called as complainant and accused as they were arrayed before the trial Court for the sake of convenience.
5. In nutshell, the complaint was filed before the learned Magistrate at Canacona against the accused which was registered as Criminal Case No.29/NI/2014. It was the complaint under Sec. 138 of the N.I. Act. In short, it is the case of the complainant that he knows the accused and both of them are distant relatives. The accused borrowed a sum of Rs.2,00,000.00 from the complainant for his personal needs. Towards repayment of such borrowed amount, the accused issued two cheques in favour of the complainant dtd. 04/06/2014 amounting to Rs.1,00,000.00 each, drawn on Corporation Bank, Loliem branch Canacona. The complainant presented both cheques for encashment on 15/07/2014. However, the cheques were returned with the endorsement "Account closed". This memorandum was received by the complainant on 15/07/2014. A legal notice dtd. 16/07/2014 was addressed to the accused through the registered post demanding the amount of Rs.2,00,000.00 within 15 days failing which action would be initiated under Sec. 138 of the N.I.Act. Though the accused received the notice on 18/07/2014, failed to comply with it. The accused replied to the said notice denying the liability and claimed a false defence. Accordingly, a complaint was lodged. Upon issuance of the process, the accused appeared before the trial Court and thereafter, the trial commenced. The complainant stepped into the witness box and produced both the cheques, cheque return memo, legal notice as well as reply received from the accused. One witness was examined by the complainant being the Branch Manager of Corporation Bank wherein the accused was having Savings Bank Account.
6. While answering the questions put to the accused under Sec. 313 of Cr.P.C., he admitted a relationship with the complainant and also borrowing of the amount of Rs.2,00,000.00 from the complainant while answering question Nos.1 and 2. The accused did not step into the witness box.
7. The learned Magistrate at Canacona in its judgment dated 05/08/20016 observed that the accused is guilty for the offence punishable under Sec. 138 of the N.I. Act as he issued the cheque for legally enforceable debt and failed to comply with the conditions of the notice when he was informed that such cheques bounced for the reason 'account closed'. The accused failed to pay the said amount of Rs.2,00,000.00 within 15 days from the receipt of notice and also failed to rebut the presumption under Sec. 139 of the N.I. Act.
8. The learned Magistrate after holding the accused guilty for the said offence passed the sentence directing the accused to undergo sentence till the rising of the Court and to pay to the complainant compensation of Rs.2,00,000.00 and further compensation of Rs.30,000.00 as costs and in default the accused to undergo sentence of imprisonment for a period of 3 months.
9. The accused challenged the above judgment and conviction of the learned Magistrate, before Sessions Court at Margao vide Criminal Appeal No.72 of 2016.
10. The learned Additional Sessions Judge, Margao vide its judgment dtd. 09/02/2017 allowed the said appeal thereby quashing and setting aside the judgment
The issuance of a cheque under the Negotiable Instruments Act creates a statutory presumption of debt, which the accused must rebut to avoid liability; mere claims of illegality without evidence do n....
Admission of cheque issuance triggers presumption of debt under NI Act; security cheque liable for existing liability; unlicensed moneylender's NI complaint maintainable; revisional court defers to c....
The presumption of liability under the NI Act is rebuttable, and the burden of proof lies on the complainant to establish the existence of a legally enforceable debt.
The presumption under Section 139 of N.I. Act is a presumption of law, as distinguished from the presumption of facts. Presumptions are rules of evidence and do not conflict with the presumption of i....
Presumption under Section 139 of the Negotiable Instruments Act requires the accused to present credible evidence to rebut the holder's claim of legal liability regarding the cheque issued.
The main legal point established is that once the execution of the cheque is admitted, the presumption under Section 139 of N.I. Act mandates that the cheque was for the discharge of any debt or othe....
The presumption under Section 139 of the Negotiable Instruments Act is rebuttable, and the accused must raise a probable defense to contest the existence of a legally enforceable debt.
The judgment established the principle that the presumption of debt and liability under Sec. 139 of N.I. Act can only be rebutted by probabalising a defence, and the standard of proof required is pre....
The presumption of consideration under Section 139 of the N.I. Act shifts the burden to the accused to prove non-existence of debt, which was not done in this case.
Presumption under Sec. 139 of N.I. Act mandates that the cheque was for the discharge of any debt or liability, and the burden is on the accused to raise a probable defense to rebut the presumption.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
