IMPORTANT POINT
Statutory presumptions under Negotiable Instruments Act can live and survive till accused proves that the cheques were not issued for any debt/liability.

A.P. Bhangale, J.—The Appeal questions validity and legality of the judgment and order dated 18.8.2008 passed by the learned Chief judicial Magistrate, Chandrapur in summary Case No.914 of 2006 whereby the respondent/accused was acquitted of the offence punishable under Section 138 of the Negotiable Instruments Act.

2. The Appellant (original complainant) had filed a complaint in respect of dishonour of the cheque bearing No.320343 for Rs.50,000, cheque No.320346 for Rs 1,15,000, cheque No. 320347 for Rs.1,85,000 drawn upon the Yavatmal Urban Co-operative Bank Ltd., Bhadravati Branch. Thus, cheques in total sum of Rs 3,50,000 were issued by the accused.

3. The cheques were presented in the state bank of India, Bhadravati branch of the Appellant for collection, but they were returned dishonoured with return memo dated 28.12.2005 with the remark ‘payment stopped by the drawer’. Demand notice was issued on 2.1.2006, but the respondent failed to pay the demanded sum despite receipt of the notice on 13.1.2006. Thus, the complaint was filed under Section 138 of the Negotiable Instruments Act.

4. The accused defended the claim by filing reply dated 2.2.2006 and denied the liability on the ground that the cheques were blank cheques without there being any mention of the amount or the date. The cheques were cancelled by the notice dated 8.12.2005 which the complainant had refused to accept.

5. The complainant stated in his evidence that the cheques of total amount of Rs. 3,50,000 were given to him on 26.8.2005, which were read over to him and then the accused signed them in his presence. The complainant admitted in the course of his cross- examination that he has not mentioned the nature of his liability for the discharge of which the cheques were drawn by the accused,. The complainant also admitted that he had received the reply to the notice from the accused.

6. Learned Advocate for the appellant submitted that the learned trial Magistrate erroneously recorded that the cheques were not issued in discharge of legally enforceable liability despite admission by the respondent/accused that he had issued direction to his bank to stop payment, although the cheques were issued. The amounts due were not paid though the demand notice was served. He submitted that in the case of K. Bhaskaran v. Sankaran Vaidhyan Balan and another1 it is observed by the Apex Court that as the signature in the cheque is admitted to be that of the accused, the presumption envisaged in Section 118 of the Act can legally be inferred that the cheque was made or drawn for consideration on the date which the cheque bears. Section 139 of the Act enjoins on the Court to presume that the holder of the cheque received it for the discharge of any debt or liability. The burden was on the accused to rebut the aforesaid presumption. Even though the cheque is dishonoured by reason of ‘stop payment’ instruction an offence under Section 138 could still be made out. It is held that the presumption under Section 139 is attracted in such a case also. The authority shows that even when the cheque is dishonoured by reason of ‘stop payment’ instructions by virtue of Section 139, the Court has to presume that the cheque was received by the holder for the discharge, in whole or in part, of any debt or liability. Of course, this is a rebuttable presumption. The accused can, thus, show that the ‘stop payment’ instructions were not issued because of insufficiency or paucity of funds. If the accused shows that in his account there was sufficient funds to clear the amount of the cheque at the time of presentation of the cheque for encashment at the drawer bank and that the stop payment notice had been issued because of other valid causes including that there was no existing debt or liability at the time of presentation of cheque for encashment, then an offence under Section 138 would not be made out. The accused had failed to enter in the witness box to prove his version and to rebut the